Even as circumstances change, most budget battles boil down to the following dynamic: Liberals push to raise taxes and cut defense spending, while conservatives argue that entitlements are the true driver of the nation’s deficits.
A new report by the Congressional Budget Office settles the debate, unequivocally, in conservatives’ favor. Taking into account the flood of new tax revenue from the “fiscal cliff” deal that raised taxes on higher income earners, and assuming that scheduled deep defense cuts go into effect, the CBO still projects that the national debt will skyrocket over the next decade. The reason is that spending on programs such as Medicare, Medicaid and Social Security will soar, and in turn increase the burden of interest payments. Let’s just take a look at the numbers.
Between 2014 and 2023, according to CBO estimates, annual tax receipts will soar by 65 percent. During that time period, revenue collected by the federal government will average 18.9 percent of the economy. That’s 1 point higher than the 17.9 percent average from the end of World War II to the year 2000 (just before George W. Bush’s first round of tax cuts was passed.)