|Topics:||Utah Democratic Party Blog|
There is a new analysis of the causes of the budget deficit by the Center on Budget and Policy Priorities. Here are some key findings from their report:
Some critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years.
The events and policies that have pushed deficits to astronomical levels in the near term, however, were largely outside the new Administration’s control. If not for the tax cuts enacted during the Presidency of George W. Bush that Congress did not pay for, the cost of the wars in Iraq and Afghanistan that began during that period, and the effects of the worst economic slump since the Great Depression (including the cost of steps necessary to combat it), we would not be facing these huge deficits in the near term.
Without the economic downturn and the fiscal policies of the previous Administration, the Obama Administration budget would be roughly in balance over the next decade. That would put the nation on a much sounder footing to address the demographic challenges and the cost pressures in health care that darken the long-run fiscal outlook.
One of the major domestic initiatives of the Bush Administration was a new prescription-drug benefit in Medicare, known as Medicare Part D. This legislation was only partly paid for, and it added significantly to the deficit that President Obama inherited. But Part D outlays are coming in lower than CBO and the Medicare actuary expected. CBO now expects the net cost of Medicare Part D over that initial 2004-2013 period to be about $355 billion, as compared to the original $552 billion figure.