How does this fiscal deal add $4 Trillion to the nat'l debt?

[Honeycombe8]

How in the world does it do that? It's mainly tax cuts, and status quo loopholes.

[Sekhmets Daughter]

1. It didn't cut any spending...

[Buzz Clik]

2. .. but it did not add to the debt.

I have no idea where the OP's question is coming from, but the answer is "It does not."

[Sekhmets Daughter]

7. We borrow 40 cents

for every dollar we spend...No spending cuts equals more debt. The revenue increase is nowhere near enough to change that dynamic.

[Buzz Clik]

10. Agreed. But that was true 24 hours ago.

[Sekhmets Daughter]

14. Yes,

but no one said the debt automatically jumped $4 trillion overnight...but that it will jump by that much.

[Motown_Johnny]

9. The CBO scores it as adding $4 trillion in the next ten years,

because they are comparing it to allowing all the tax cuts to expire, which is what would have happened without that vote to make them permanent.


It does add to the debt. Tax cuts do not pay for themselves.

[Buzz Clik]

11. Thank you.

However, that is bizarre logic on the part of the CBO.

[Motown_Johnny]

12. Not really. They compare it to the way the law was

and because the way the law was written all the tax cuts would have expired.

They need a consistent method for comparing changes in law and comparing new laws to old laws seems to be the only reasonable way.

[Buzz Clik]

13. Fair enough. It was one possible trajectory.

More work to be done.

[SCliberal091294]

3. we were under sequestration when the deal was made...nt

[nenagh]

4. Christine Romans on CNN this am said the 4 Trillion dollar score..

came from the Bush era tax cuts that were made permanent in the Cliff deal vs, I suppose, what would have been permanent if we went over the cliff.

I am curious if someone else can confirm...because already a Republican House member was using it as a talking point to bludgeon the President and the Democrats once again.

Note: I am no economist...I could have misheard or misinterpreted her comment....

[jpljr77]

5. This is the most dishonest talking point in a while. Seriously.

It comes from the CBO "score" of the deal done yesterday, 1/1/13. The CBO uses as its baseline "current" law. Well, on 1/1/13, current law was the fiscal cliff (expiration of ALL Bush tax cuts and the spending cuts through sequestration). So compared to THAT "reality," the deal adds $4T over 10 years.

Here is The Hill writing about it.

[kentuck]

6. Because the vast majority of Bush tax cuts were made permanent...

and we don't have the revenues coming in to pay for present programs. There is no free lunch.

[Motown_Johnny]

8. Tax cuts add to debt. We made permanent the tax cuts for everyone

under $400/$450 K a year.

That adds to the debt when compared to allowing everyone's taxes to go back to Clinton era rates.

Why is that confusing? It should be crystal clear.

Tax cuts don't pay for themselves. They add to the debt.