As it always does, CBO forecasts that deficits will decline in the later years of its 10-year budget window. But this forecast depends on assumptions about Congress so fanciful that James Cameron couldn’t make them up. CBO projects that all of the Bush tax cuts will expire in 2011—even those for the middle class—and that the Alternative Minimum Tax will hit more than 30 million mostly middle-class families over the next decade. Democrats say neither will happen.
CBO also assumes that Medicare will cut reimbursements to doctors by $250 billion, though Democrats have promised to stop such cuts in return for the American Medical Association’s endorsement of their health bills.
If the middle-class tax cuts remain, the AMT doesn’t soak the middle class and spending grows at its historic norm, then CBO concedes “the deficit in 2020 would be nearly the same, historically large, share of GDP that it is today and the debt held by the public would equal nearly 100% of GDP.” Buongiorno, Italia.
Oh, and none of this includes a penny for ObamaCare.
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