Lambro falsely equated tax cuts with spending cuts

››› ››› DUNCAN BLACK

Washington Times chief political correspondent Donald Lambro incorrectly equated tax cuts with spending cuts in an October 27 commentary, claiming that "if Bush's tax cuts not been passed, that money would have been spent" and asserting that tax cuts provide Congress with "less to spend." In fact, Congress does not limit itself -- and has not limited itself over the past four years -- to spending only what is raised in tax revenues. Current spending can be and is also financed by borrowing.

According to the Congressional Budget Office, between the years 2000 and 2004, federal tax revenues as a share of gross domestic product (GDP) fell from 20.9 percent to 16.3 percent, while federal expenditures rose from 18.4 percent of GDP to 19.8 percent. In 2000, the federal government had a surplus of $236.2 billion, and in 2004, after the two major Bush administration tax cut initiatives had been passed, along with spending on the Iraq war and other outlays approved by a Republican-controlled Congress, that surplus had, by 2004, been replaced with a deficit of $412.1 billion. Despite having "less to spend," as Lambro claimed, federal outlays between 2000 and 2004 rose from $1.79 trillion to $2.29 trillion, even as total revenues over the same period fell from $2.02 trillion to $1.88 trillion.

From Lambro's October 27 Washington Times commentary, headlined "Overspending causes and cure":

Perhaps no issue, outside of Supreme Court nominee Harriet Miers, has angered conservatives more than the growth in federal spending during George W. Bush's presidency. Granted, Mr. Bush began his tenure by effectively slashing more than $1.4 trillion from the government's 10-year revenue projections through his tax cuts. Few of his critics see this as a spending cut, but if those tax cuts had not been passed, that money would have been spent, instead of remaining in the private sector where it fueled investment, job-creation and economic growth.

[...]

Mr. [Heritage Foundation budget analyst Brian] Riedl and the GOP's other critics are right to keep the heat on Congress to curb spending, but in the end -- as Mr. Bush has shown -- tax cuts are the most effective weapon in this fight. When you take away their money, they have less to spend.

Posted In
Economy, Taxes
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