CBO Revises Fiscal Cliff Deal Rating—10:1 Tax Increases-Spending Cuts Ratio
The Congressional Budget Office revised its original estimates of spending cuts and tax increases down to a ratio of $10 in tax increases for every $1 in spending cuts on Tuesday.
The original estimate CBO came out with late Monday, as reported by Fox News and Breitbart News among others, was $41 in tax increases to $1 in spending cuts.
The Hill reports that CBO dropped the estimate to the less controversial but still unbalanced 10:1 ratio after the Joint Committee on Taxation weighed in on its provisions. “The CBO estimate comes after the Joint Committee on Taxation estimated it would reduce federal revenue by $3.93 trillion over the next 10 years when compared to current law,” The Hill wrote.
The CBO’s revised estimate predicts that the bill would add just under $4 trillion to the national debt over the next ten years.
When Presidents Ronald Reagan and George H.W. Bush increased taxes in return for spending cuts—cuts that never ultimately came—they did so at ratios of $3 of spending cuts to $1 in tax increases and $2 of spending cuts to $1 in tax increases.
“In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes,” Americans for Tax Reform says of those two incidents. “The tax hikes went through, but the spending cuts did not materialize. President Reagan later said that signing onto this deal was the biggest mistake of his presidency.
"In 1990, President George H.W. Bush agreed to $2 in spending cuts for every $1 in tax hikes. The tax hikes went through, and we are still paying them today. Not a single penny of the promised spending cuts actually happened.”