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It’s Still the Spending that’s Causing the Deficit

In the latest release in its Fiscal Facts series, the Tax Foundation's Scott Hodge uses data from the Congressional Budget Office to explain that “runaway spending – not tax cuts – (are) causing deficits.” He notes that the “surge of new tax revenues for the federal Treasury is having a limited effect on lowering the federal deficit because spending continues to grow at a relatively rapid pace.”

The following is an abbreviated version of a table he uses to compare revenue and spending between FY2001, Bill Clinton’s last fiscal year, and FY2005:

Category/2001/2005/Change (dollars in billions)
Revenues/$1,991/$2,057/$66
Outlays/$1,863/$2,425/$562
Deficit/Surplus/$128/<$368>/<$496>

So why isn’t Congress making permanent the tax cuts? While doing that, they also need to start figuring out a way to control their urge to spend!

Hat tip: Towhhall.com