Fox's Cavuto Falsely Claims Tax Deal Would Increase Government Spending By $4 Trillion

Fox News' Neil Cavuto claimed that the recent deal to avoid ending tax cuts for all Americans adds “4 trillion in new spending.” But the $4 trillion estimate is not new spending; rather, it's lost revenue in comparison to what would have been collected if all the Bush tax cuts expired.

Discussing the January 1 tax deal on Your World, Cavuto claimed that the deal expands government spending “to the tune of $4 trillion over the next ten years.”

An on-screen graphic also claimed the deal would add $4 trillion in spending over ten years:

fiscal cliff

But the $4 trillion estimate, which was published by the Congressional Budget Office, is lost revenue in comparison to what would have been collected if all the Bush tax cuts expired. Politico reported that the CBO's estimates “attribute most of the cost to lost revenues or payments on refundable tax credits.” The Hill also pointed out that nearly all of the deficit increase would be due to an extension of the Bush-era tax cuts:

The Senate deal to avoid the “fiscal cliff” will add roughly $4 trillion to the deficit when compared to current law, according to new numbers from the Congressional Budget Office (CBO).


The extension of lower tax rates for the bulk of the nation's taxpayers and the addition of a patch to the Alternative Minimum Tax would add roughly $3.6 trillion to the deficit over the next decade, the CBO said. Other individual, business and energy tax extenders would add another $76 billion. The extension of unemployment benefits would cost roughly $30 billion, and the so-called “doc fix” would tally another $25 billion through fiscal 2022.

In addition, according to Politico, “CBO begins its analysis from its March current law baseline that assumes all of Bush-era tax cuts would expire at New Year's Day, and therefore gives no deficit-reduction credit for the fact that the deal begins to raise rates for the wealthiest Americans.” Politico continued:

Yet since last spring the CBO itself has warned that if nothing were done, the so-called “fiscal cliff” combination of tax increases and automatic spending cuts could throw the country back into recession. In the same way, critics would argue that the deficit estimates now don't give enough credit to the improved economic growth that could result from the tax cuts.