Pew confirms: Obama, Dems, wrong on tax cuts and debt 

In his April 13th Remarks on Fiscal Policy, President Obama claimed:

But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program – but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts – tax cuts that went to every millionaire and billionaire in the country… To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

According to a new Pew study out this week, this statement is simply false. The Pew study, Fiscal Facts: The Great Debt Shift analyzed CBO federal budget baselines from 2001 through to today and identified the specific causes of the deteriorating surplus and then expanding deficit. They found:

  • The 2001/2003 tax cuts: 13%
  • Iraq and Afghanistan: 10%
  • Medicare Part D: 2%
  • Obama’s 2009 stimulus: 6%
  • Obama’s 2010 stimulus: 3%
  • Economic and Technical Revisions (aka the fact that didn’t become a Fortune 500 company and the housing bubble burst): 28%.

The Heritage Foundation conducted a similar analysis in June 2010, before the December tax deal, and their numbers are remarkably similar. They peg the 2001/2003 tax cuts as responsible for 14% of the swing, the 2009 stimulus at 6%, and economic revisions at 33%.

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