The Bipartisan Plot to Increase the Deficit

Deficit reduction is supposedly a huge priority in Washington, especially among Republicans who apparently skipped economics classes in college and don't understand that reducing spending -- and demand -- is the last thing you want to do in a weak economy.

But here's a question: Given all the focus on deficits, including by the media, wouldn't you think that it would be big news if the CBO revised its budget deficit projection for the next decade upward by $4.6 trillion? 

That's exactly what happened this week, when the CBO released its "Budget and Economic Outlook: Fiscal Years 2013 to 2023."

The report states, plain as can be: 

The deficits projected in CBO’s current baseline are significantly larger than the ones in CBO’s baseline of August 2012. At that time, CBO projected deficits totaling $2.3 trillion for the 2013–2022 period; in the current baseline, the total deficit for that period has risen by $4.6 trillion.

That's right: The CBO exactly doubled its estimate of total deficit spending compared to just six months ago. 

Now, did you see any headlines blaring "Deficit to Double?" Did you hear any politicians, of either party, standing up to express outrage that such a huge national problem had just gotten a whole lot worse -- and in just the past six months?

No, I didn't either. Instead, the top headline about the report was that the annual deficit had fallen below $1 trillion for the first time since 2008. Good news!

Why the silience? Well, we all know why: Because a bipartisan majority in Congress, on the edge of the "fiscal cliff," just extended the vast majority of the Bush tax cuts -- cuts we couldn't afford when they were first passed in 2001 and clearly can't afford now. As the CBO said about it's new deficit estimates: 

That increase stems chiefly from the enactment of the American Taxpayer Relief Act of 2012 (P.L. 112-240), which made changes to tax and spending laws that will boost deficits by a total of $4.0 trillion (excluding debt-service costs) between 2013 and 2022, according to estimates by CBO and the staff of the Joint Committee on Taxation.

I'm being tongue in cheek here, obviously. And certainly a case could be made that now is not a good time for a tax hike anymore than it's a good time to cut spending. 

But my broader point is about the utterly deceptive politics of the deficit. Republicans have positioned themselves as the fiscal watchdogs of the country, yet voted for the single biggest deficit expanding legislation in history. Forget their supposed determination to implement large spending cuts; the simple fact is that current tax policy -- largely their tax policy -- will be a huge driver of future deficits. Period. 

I've said enough about the short-sighted way that Democrats, led by Obama, came to embrace the bulk of the Bush tax cuts, so I won't repeat those points here. 

Both parties say they want to downsize the deficit (again, the wrong priority right now.) Yet both just radically expanded the deficit and barely anyone in the media or elsewhere has called out what really happened.