Lawmakers in the US are engaged in a heated debate over whether to raise taxes or cut spending in order to tackle the nation's rising deficits and debt burden. A report by the non-partisan Committee for Responsible Federal Budget (CRFB) states that both tax cuts and spending increases are to blame for the rise in debt since 2001 [833f19e3]. The debt would be fully paid off if not for policy changes enacted over the last 22 years. Major tax bills have cost more than $8 trillion, while net spending increases amount to nearly $6 trillion. Responses to the Great Recession and the Covid-19 pandemic added another $6.8 trillion in costs. Rising spending, primarily in mandatory programs, accounts for about two-thirds of the growth in annual deficits, while declining revenue explains one-third. CRFB emphasizes that improving the nation's fiscal outlook requires addressing both revenue and spending [833f19e3]. Experts argue that the country's debt problem is not primarily due to a massive increase in spending, but rather massive decreases in taxes, particularly benefiting the affluent [da4689c9]. The tax cuts implemented under the administrations of George W. Bush and Donald Trump have added a staggering $10 trillion to the national debt since their enactment [da4689c9]. If taxes are not raised to levels that allow the US to fully fund itself, the country will continue to borrow money at increasingly high interest rates. However, cutting spending alone will not be sufficient to fix the problem, unless Americans are willing to make significant cuts to programs such as Medicare and Social Security [da4689c9]. Some lawmakers even advocate for a system with zero taxes and no spending at all. The ongoing disagreement over taxes and spending reflects a deeper disagreement about what constitutes a moral and just society [da4689c9]. Former Treasury Secretary Larry Summers believes that the current federal budget deficit poses a greater challenge for the economy than it has before in U.S. history. The budget deficit in 2023 was $1.7 trillion, which is 5.3% of GDP, well above the average of 3.8% over the past 40 years [xxxxxxxx]. Summers compared the current situation unfavorably to previous attempts to reduce the deficit through tax increases and spending cuts. He suggests strengthening IRS enforcement to raise more tax revenue [xxxxxxxx]. Summers supported the Inflation Reduction Act, which increased IRS funding and reduced the deficit. A House Republican proposal to cut IRS funding would impair its ability to collect taxes and add roughly $30 billion to the federal deficit [xxxxxxxx]. Harvard economist Karen Dynan suggests that stabilizing the US national debt would require $2,400 per year per American through spending cuts or tax increases. Congress would need to adopt a combination of spending cuts and tax increases equivalent to 2.8% of GDP or nearly $800 billion annually [xxxxxxxx]. However, there is inadequate political momentum to address the deficit at the required scale. Republicans are focused on extending the Trump-era tax cuts and have rejected President Biden's proposed cuts to retirement programs. The Biden administration has ruled out tax increases for households earning less than $400,000 and aims for an average annual deficit reduction of $250 billion. Dynan emphasizes that the challenge of high and rising federal debt is manageable from an economic standpoint, but the big problem lies in the political sphere. Elected leaders need to communicate the facts and address the issue, which has not been adequately done so far [xxxxxxxx]. Heidi Heitkamp, a former U.S. Senator, argues that shrinking government budget deficits requires putting politics first, meaning the art of listening and persuading voters to buy into difficult compromises. Lawmakers are considering forming a bipartisan commission to recommend ways to address the growing national debt. The cost of servicing the debt has increased due to large budget deficits and rising interest rates. The United States is on a trajectory of spending beyond its means, and investors may panic if they don't see a credible plan to control deficits [xxxxxxxx]. The article discusses the importance of what presidents spend money on, rather than just the sum by which they increase the deficit. It highlights that money can be allocated in various ways, but the allocation can make a significant difference. The author mentions Franklin D. Roosevelt, who added the most to the national debt by percentage, but it was necessary spending to address the Great Depression and win World War II. The article also mentions Donald Trump, who added $8.4 trillion to the national debt, with some of it being necessary for COVID relief, but a significant portion coming from tax cuts. The tax cuts were intended to stimulate the economy but did not cover the lost revenues. The article then discusses President Biden's spending, including the $1 trillion infrastructure bill, the Inflation Reduction Act, the clean energy tax credits, and the CHIPS and Science Act. These investments are seen as beneficial for the economy, the environment, and national security. The author concludes by emphasizing the importance of focusing on what the spending is for rather than just the amount spent [98680386]. The U.S. federal budget has been poorly managed, with funding spats and debt-ceiling standoffs threatening defaults and shutdowns. The Tax Cuts and Jobs Act (TCJA) passed in 2017 has been a fiscal disaster, costing almost $2 trillion by 2027 without delivering promised benefits. The TCJA did not increase wages or have a significant effect on economic growth. Similar tax cuts in 2001 and 2003 also failed to strengthen the economy or pay for themselves. The mismanagement is evident when considering how the money could have been spent, such as extending the Child Tax Credit to lift children out of poverty or providing universal child care and free preschool. Congress must decide whether to extend the TCJA's provisions next year and should consider making improvements based on lessons learned [eaa1307c]. Economists warn that the Biden administration's proposed tax policy could have negative consequences, including costing citizens and killing American jobs. According to the IRS, more than a third of Americans paid no federal income taxes, with 39% of individuals who filed returns having no income tax liability. This is due to factors such as stimulus payments, government programs, increased credits, and changes in the tax code. The shift towards more Americans not paying income taxes is a significant trend influenced by economic factors and tax policy changes [da4689c9]. US Congressman Chuck Edwards questioned Health and Human Services Secretary Xavier Becerra about the Biden administration's proposal to expand the mandatory side of the federal budget during a House Committee on Appropriations hearing. Edwards expressed concern about the lack of oversight on taxpayer dollars spent through mandatory funding. He also questioned Treasury Secretary Janet Yellen on the corporate tax increase proposed in the president's budget, highlighting that small businesses would be affected. Edwards emphasized the negative impact of raising the corporate tax rate to 28 percent on American workers and businesses. He supported bills to restore America's energy dominance and criticized the president's fiscal year 2025 budget request for funding extreme agendas and not adequately supporting the Department of Homeland Security. Edwards highlighted the House Budget Committee's responsible and sustainable budget resolution that imposes no new taxes and balances the budget in 10 years. He expressed concern about the rising inflation and falling real weekly earnings caused by the administration's economic policies. Edwards pledged to rein in reckless spending and restore fiscal responsibility in Washington. A full extension of the Tax Cuts and Jobs Act would cost the economy hundreds of billions of dollars over the next few decades, according to Natasha Sarin, a professor at Yale Law School and co-founder of The Budget Lab [fb7e4e75]. Small business owners from West Virginia and Wisconsin testified before the U.S. House Committee on Ways and Means, urging lawmakers to extend or make permanent the Trump-era tax cuts. The Tax Cuts and Jobs Act of 2017 allowed some business owners to deduct up to 20% of qualified business income and temporarily lowered marginal tax rates. Democrats criticized the bill as a 'corporate tax giveaway,' while small business owners argued that the deductions have been a financial lifeline. Extending the law could cost the government between $3.3 trillion and $3.6 trillion over the next 10 years [f7c0d095]. A new report compared Joe Biden and Donald Trump's record on the national debt. Trump added $8.4 trillion to the national debt while Biden has added $4.3 trillion thus far. The non-partisan Committee for a Responsible Federal Budget (CRFB) released a report on Monday recapping the fiscal record of both major 2024 candidates. From 2017 through 2021, Trump’s 10-year debt approvals included $4.8 trillion in non-COVID related spending plus $3.6 trillion in COVID relief. Trump’s Tax Cuts & Jobs Act added $1.9 trillion to the U.S. national debt, while bipartisan Budget Acts added $2.1 trillion. For Biden, $2.2 trillion was non-COVID spending while $2.1 trillion was COVID-related spending. Biden’s Bipartisan Infrastructure Law and student debt actions added $439 billion and $620 billion to the national debt respectively. The Fiscal Responsibility Act and Inflation Reduction Act shaved off nearly $2 trillion in debt [2c5c1196]. Treasury Secretary Janet Yellen blames former President Donald Trump's Tax Cuts and Jobs Act for the U.S.'s soaring budget deficit. Yellen argues that the tax cuts gave tax breaks to wealthy corporations and individuals while increasing the national deficit. The national debt grew $7.8 trillion during Trump's presidency. Extending Trump's tax cuts for the next 10 years would add $4.6 trillion to the deficit, according to the Congressional Budget Office. Proponents of the tax cuts argue that they boosted the economy and increased U.S. corporations' competitiveness. Yellen believes that ending the tax cuts and enacting President Biden's proposed $3 trillion, 10-year budget deficit reduction plan will put the U.S. on a fiscally sustainable course. The Organisation for Economic Cooperation and Development (OECD) has urged Joe Biden to raise income tax and cut pensions spending to slow the dangerous rise in the US national debt. The OECD also suggested increasing corporate taxes and finding a way to control spending on healthcare. The US national debt has risen from below 60% of GDP at the start of the century to 120% today, and the debt pile is projected to keep growing rapidly. The OECD warned that failure to tackle the debt could undermine the sustainability of current spending programs, including healthcare and social security. The Congressional Budget Office expects the US government to borrow $1.9 trillion this year, with the deficit forecasted to rise to $2.8 trillion per year in a decade's time. The OECD also highlighted that the US's fiscal credibility has been weakened by repeated government shutdowns, debt ceiling crises, and difficulties in managing the budget process in Congress. [73feba85]. In the first three years of President Trump’s administration, America’s total debt increased by $2.5 trillion. In the first three years of Biden’s administration, our total debt increased by a staggering $4.7 trillion. Even if one were to gloss over the fact that Biden’s term is not yet over, the worst that can be said is that America’s total debt burden increased by $6.7 trillion under Trump and $6.3 trillion under Biden over their four years. The records are only remotely close due the spending incurred during the first year of the pandemic. Biden has no such excuse. [be95abb6]