Higher Tax Revenues Lead to Temporary Deficit Reduction
CBO Projects Debt to Grow by $8 Trillion over Ten Years
(Washington, D.C.) – This afternoon the U.S. Treasury reported that the federal deficit for the month of March fell to approximately $37 billion. In the first half of the 2014 fiscal year, the government has borrowed “only” $413 billion. Some in Washington are hailing this as good news, arguing that it represents a significant reduction from last year, owing in part to a 10 percent increase in federal tax revenues in the first part of the year.
In February, the Congressional Budget Office estimated that the deficit for this fiscal year would be $514 billion. The agency projects that the deficit will start growing again by 2016, and that the U.S. government will add nearly $8 trillion to the deficit over the next 10 years.
Daniel Garza, Executive Director of The LIBRE Initiative released the following statement:
“Last year the President signed into law a tax increase of more than $600 billion, and more recently Congress agreed to lift the spending caps that had previously been agreed to with the Administration. As a result, taxes are up and spending is up. The improved deficit numbers are due in large part to a 10 percent increase in the tax burden on working Americans. Sadly, it is only temporary, with independent analysis showing the deficit will soon start climbing again. That’s on top of a national debt that currently totals more than $17 trillion.
Celebrating these figures without acknowledging the looming debt crisis is shortsighted. Leadership must control spending and set a budget that America can live with, so that our deficits and debt will not continue to grow out of control. Washington should be able to address our critical national priorities, and to do it within reasonable spending limits.”