Bill Clinton: Bush Tax Cuts too Big!!!

(Funny video about the Democrats who love to blame Bush)

HALT: Halting Arkansas Liberals with Truth

Currently I am reading “My Life” by Bill Clinton, and I must say that I am really getting into it. I did take notice of page 870 since President Clinton was talking about the Bush Tax Cuts which currently were due to expire on December 31, 2010. The book “My Life” was finished in  2004, so President Clinton had the advantage of commenting on these tax cuts that were passed in 2001 and 2003. They were the same across the board tax cuts that the Republicans proposed to him all during his presidency and this is what he thought of them:

“I vetoed the Republican tax cut because it was “too big, too bloated,” and put too great a burden on America’s economy. Under the budget rules, the bill would have forced large cuts on education, health care, and environmental protection. It would have prevented us from extending the Social Security trust funds, & from adding a prescription drug benefit to Medicare. We were going to have a surplus this year of about $100 billion, but the proposed GOP tax cut would cost nearly $1 trillion over a decade.”

You got to give President Bill Clinton a lot of credit for taking the bull by the horns and working to find the middle ground with the Republicans after the 1994 elections. The result was three surplus budgets from 1998 to 2001.

Were the Bush Tax Cuts too big? Were they the cause of later budget deficits? Many liberal Democrats besides President Clinton have made this same assertion over and over.

NOTICE TO LIBERALS: The problem was run away federal spending  and not the Bush Tax Cuts. Take a look at the historical evidence and you will see that the revenue actually went up during the years in question.

I am responding to this assertion with a portion from an article published January 29, 2007 called, “Ten Myths About the Bush Tax Cuts” by Brian Riedl.

Myth #2: The Bush tax cuts substantially reduced 2006 revenues and expanded the budget deficit.
Fact: Nearly all of the 2006 budget deficit resulted from additional spending above the baseline.

Critics tirelessly contend that America’s swing from budget surpluses in 1998-2001 to a $247 billion budget deficit in 2006 resulted chiefly from the “irresponsible” Bush tax cuts. This argument ignores the historic spending increases that pushed federal spending up from 18.5 percent of GDP in 2001 to 20.2 percent in 2006.

The best way to measure the swing from surplus to deficit is by comparing the pre-tax cut budget baseline of the Congressional Budget Office (CBO) with what actually happened. While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit-a net drop of $572 billion. This drop occurred because spending was $514 billion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts). In other words, 90 percent of the swing from surplus to deficit resulted from higher-than-projected spending, and only 10 percent resulted from lower-than-projected revenues.

Furthermore, tax revenues in 2006 were actually above the levels projected before the 2003 tax cuts. Immediately before the 2003 tax cuts, the CBO projected a 2006 budget deficit of $57 billion, yet the final 2006 budget deficit was $247 billion. The $190 billion deficit increase resulted from federal spending that was $237 billion more than projected. Revenues were actually $47 billion above the projection, even after $75 billion in tax cuts enacted after the baseline was calculated. By that standard, new spending was responsible for 125 percent of the higher 2006 budget deficit, and expanding revenues actually offset 25 percent of the new spending.
The 2006 tax revenues were not substantially far from levels projected before the Bush tax cuts. Despite estimates that the tax cuts would reduce 2006 revenues by $188 billion, they came in just $58 billion below the pre-tax cut revenue level projected in January 2000.
The difference is even more dramatic with the pro-growth 2003 tax cuts. The CBO calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion, yet 2006 revenues came in $47 billion above the pre-tax cut baseline released in March 2003. This is not a coincidence. Tax cuts clearly played a significant role in the economy’s performing better than expected and recovering much of the lost revenue.
By Everette Hatcher III, on December 16, 2010 at 4:17 am, under Bill Clinton, Taxes. No Comments
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