The administration projects that its 2012 budget will reduce the debt by about $1 trillion relative to its 2011 projections. Included in the baseline is the expiration of the 2001 and 2003 Bush tax cuts, which will add $709 billion to revenues over the 10 year period. So the administration plans to add $7.2 trillion to the debt over the next 10 years while raising taxes by $1.5 trillion.
Although it’s a terrible idea, letting the Bush tax cuts expire is the low-hanging fruit of the revenue side of debt reduction. The fact that the Obama administration plans for the expiration of the Bush tax cuts while failing to slow debt accumulation should be taken as an indication of the limitations of revenue-based deficit plans.
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