The House Budget Committee held a hearing with Dr. Peter R. Orszag, Director of the Congressional Budget Office. Orszag says that the amount of money lost to Bush’s tax cuts equals the amount of the current deficit.
Rep. Edwards: Let me ask you a question: based on your analysis for fiscal year 2007, what percent of this year’s deficits is the result of the tax cuts passed since 2001?”
Dr. Orszag: “I’m going to have to give you the exact number later, and it depends how you do the accounting, but the revenue effect of the 2001 and 2003 tax legislation is roughly one and a half percent of GDP, which is about the size of the federal deficit today.”
Rep. Edwards: “So put that in lay terms, had we not had the tax cuts passed since 2001, according to CBO analysis, the deficit would be how much smaller?”
Dr. Orszag: “If you just do a simple accounting exercise that takes that estimated revenue effect from the Joint Committee on Taxation and compare it to today’s deficit, it would roughly eliminate the deficit.”