National Debt Will Continue To Skyrocket After "Fiscal Cliff" Deal

Rocket pulling up a US Dollar - IllustrationThe "fiscal cliff" bill has now passed the House and the Senate, leaving only President Obama's signature as the final requirement before the bill becomes law.

The Democrats and Republicans, as you can imagine, have decidedly mixed feelings on the deal. Many Republicans (and some Democrats) believe that the deal didn't do nearly enough to halt runaway spending in the country.

The CBO (Congressional Budget Office) released a report earlier today in which they tallied the cost of the "fiscal cliff" deal over the next ten years. It's important to note that they are comparing the impact of the deal vs if the country had gone straight off the "fiscal cliff". If the country had gone off the "fiscal cliff", the nation's deficit spending would have been slashed (due to the expiration of various tax cuts and the implementation of automatic spending cuts) but the country would have likely gone into a recession.

According to the CBO, the "fiscal cliff" deal will mean nearly $4 trillion in increased deficit spending ($3.971 trillion) over the next ten years (2013-2022). The breakdown of that is $3.638 trillion in reduced revenues, and an additional $332.3 billion or so in increased expenditures (unemployment compensation extension, etc).

Here is the projected INCREASE in deficit spending by year, from 2013-2022:

2013, $329.6 billion
2014, $353.9 billion
2015, $311.0 billion
2016, $340.5 billion
2017, $371.1 billion
2018, $404.6 billion
2019, $415.7 billion
2020, $447.6 billion
2021, $482.5 billion
2022, $514.5 billion

Source - Estimate of the Budgetary Effects of H.R. 8, the American Taxpayer Relief Act of 2012, as passed by the Senate on January 1, 2013 (*.pdf)

Filed under: General Knowledge

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