Those Bush tax cuts are a gift that just keeps on giving. They are a big reason the national debt is so high, requiring huge interest payments, and a big reason that the Treasury faces such large shortfalls every month between what comes in the door and what goes out.
Yet, somehow, conservatives have managed to spin the national debt strictly as a "spending problem." And strangely, Democrats have largely let them do that with barely a word about how low taxes got us in this jam.
The grave dimensions of Washington's revenue problem are pretty obvious if you look at the numbers. According to the OMB, federal tax receipts made up just 15.8 percent of GDP last year and are likely to be 16.7 percent this year. This is way below the historic average of over 18 percent. The sluggish economy is one reason for that; but the Bush tax cuts are another huge reason.
Those tax cuts, enacted in 2001 and 2003, were extended and preserved in their entirety through the beginning of this year. And then only 15 percent of the cuts were rolled back. The vast bulk of the Bush tax cuts remain in effect -- at a cost of more than $3 trillion over the coming decade.
Last year, the New York Times did an in-depth analysis that found that most Americans were paying the lowest overall tax burdens at any time since the 1980s.
So here we are, talking every day about how the Treasury doesn't have enough money coming in to pay all its bills without borrowing boatloads of cash, and yet nobody is talking about why so little money is coming in.
Nor does anyone talk much about the role of big tax cuts in piling up all this debt to begin with. The national debt tripled under President Reagan, thanks in large part to his historic tax cuts, and then George W. Bush nearly doubled the national debt, with his tax cuts playing a major role in that increase (along with the war in Iraq). By continuing those tax cuts, on top of additional stimulus tax cuts, Obama loaded on more tax-cut related debt.
Does Washington have a spending problem? Sure, in some ways it does -- particularly its insistence on maintaining Cold War level national security budgets at a time when the U.S. faces no major global foes even remotely on par with the Soviet Bloc.
But the U.S. has a bigger revenue problem, and it's time people started talking about that more.