Republicans in Congress are under tremendous pressure to cave in to President Obama’s demand for tax hikes by December 31. These tax hikes are projected to generate $823 billion in additional revenues, and save another $127 billion in interest payments, for a cumulative reduction of $950 billion in the national debt over 10 years, according to the left-wing Center for Budget and Policy Priorities.
Ten-year budget projections are notoriously unreliable, but the White House estimates budgets for five years. By 2017, the administration projects that the national debt will be more than $21 trillion but these tax hikes will have generated just $307 billion, reducing the debt by a miniscule 1.44 percent.
If Republicans fail to increase revenues, “sequestration” – automatic spending cuts – will go into effect, cutting up to $1.2 trillion from federal spending over the next 10 years. These cuts, we are told, will slash essential programs “across the board.”
In reality, sequestration is not a spending cut at all, but a slight reduction in the growth of spending.
In the worst-case scenario, cutting $1.2 trillion over 10 years means cutting $120 billion from each year’s spending over a decade. Without sequestration, the Obama White House projects that federal spending in 2017 will exceed $4.5 trillion – some $736 billion (19 percent) more than 2012’s $3.8 trillion budget.
Read More at Human Events . By Mark LaRochelle.
Photo Credit: Donkey Hotey (Creative Commons)