August 19th, 2010
01:04 PM ET
4 years ago

CBO offers mixed take on tax cuts, stimulus

New York (CNNMoney.com) - The Congressional Budget Office on Thursday offered economic projections that will inform lawmakers tackling one of the most controversial issues they face: how to balance the need to help the economy and curb U.S. debt.

If the Bush tax cuts for the majority of Americans and stimulus spending are allowed to continue, economic growth could be higher and unemployment lower in the near term than if the tax cuts and stimulus efforts expired as scheduled, CBO projected. But deficits would be higher.

"[It would provide] a considerable boost to economic activity in 2011 and beyond for a few years," said CBO Director Douglas Elmendorf. "Over time, [however,] the negative consequences of very high federal borrowing build up."

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Filed under: Congressional Budget Office • issues • Stimulus • Taxes
soundoff (23 Responses)
  1. Glenn Kowit

    The plan sounds as if it has merit.

    Glenn Kowit, Sarasota Florida

    August 19, 2010 01:12 pm at 1:12 pm |
  2. JES

    I think all this could be solved by a balanced budget and not with higher taxes.

    Since Obama has taken office the debt has trippled and govenment jobs expanded at a cost to the private sector.

    Just what we need bigger government.

    Stop sprnding like a druken sailor and get back to accounting one + one is two not what ever you want.

    August 19, 2010 01:16 pm at 1:16 pm |
  3. Marcus

    "The two things we really need to keep in our heads at once is we should not make the recession worse until we're sure we're on a recovery track by restricting the budget deficit too much," Rivlin said. "At the same time we need to be ... taking steps now to reduce future deficits and to stabilize the debt. That's not impossible."

    But it requires a LOT of good will of both parties (plus the independents)!!!

    August 19, 2010 01:16 pm at 1:16 pm |
  4. Dutch/Bad Newz, VA

    Well there you have it. The non partisan CBO has spoken. Now watch republicans come out and say that's not true.

    August 19, 2010 01:17 pm at 1:17 pm |
  5. Augustus

    They could just keep demonizing us corporate shills who hire people and by all means raise taxes. This has been a fiasco. I never thought my President would spout populist garbage like Hugo Chavez and further divide the country. I have never see business people angrier.

    August 19, 2010 01:22 pm at 1:22 pm |
  6. EBC

    When are Americans going to get it that the Stimulus is not a "FIX ALL" for everything wrong in our country. It took BUSH 8+ years to create what IDIOT thinks that President Obama can fix everything in his first year?

    Hello? Who thinks that? I'd like to see them fix Bush's pile of poop in a year or in 4 years? That's just stupid.

    President Obama is working HARD and is doing his best with the cards he was dealt. Has he made mistakes? Yes, but that's to be expected, ALL Presidents make mistakes, there is NO manual on being a President. EVERY President is faced with different issues.

    So this notion that President Obama is suddenly going to wave some magic wand and FIX everyone's "personal" issues is silly. Americans need to stop being so SELFISH and PETTY and give the man time to do his JOB!!!!

    August 19, 2010 01:23 pm at 1:23 pm |
  7. Brian in MD

    Basically, the CBO is saying Obama is an economic illiterate.

    August 19, 2010 01:28 pm at 1:28 pm |
  8. Rick McDaniel

    Another stimulus would be just as wasteful as the first, and would be a hugely bad idea.

    Time for America to face the realities of living beyond our means for far too long.

    August 19, 2010 01:39 pm at 1:39 pm |
  9. Anonymous

    The wealthy have had their tax cuts for years and they are NOT creating jobs. They are HOARDING their money. Let the tax cuts for the wealthy expire and pay down the deficit with every penny collected. they have enough deductions and loopholes that they pay very little now. The poor and middle class do not have loopholes and deductions.

    August 19, 2010 01:41 pm at 1:41 pm |
  10. Carmelle

    if you think this is an Obama and Dems problem. THINK AGAIN

    Even if the repubs win in Nov, they will have the SAME PROBLEMS.

    August 19, 2010 01:46 pm at 1:46 pm |
  11. T'SAH from Virginia

    Wait a second!! The CUTS have been in effect for the past 10 years and look at where we are????

    The rich do not SPEND – that's why they are RICH!!! Give me a fraction of a percent of ANYONE'S rich INCOME and I will show you how to SPEND IT!! I alone will stimulate the Economy back to normal!!!

    August 19, 2010 01:47 pm at 1:47 pm |
  12. Sniffit

    "[It would provide] a considerable boost to economic activity in 2011 and beyond for a few years...Over time, [however,] the negative consequences of very high federal borrowing build up."

    Translation: "It might be fun in the short term to spend the money on a new flat screen TV or Mazerati instead of your oil bills and real estate taxes, but eventually you're going to get cold and have a tax lien placed on the house. IN other words, continuing these tax cuts are will leave your grandchildren holding an economy that looks even more like a pile of overflowing pampers than it does now and they will grow up to be indentured servants to giant corporations with a government that is nothing more than a proxy puppet of corporate america. Just like in your personal financial life, it is far better to pay for things up front instead of hoping that frothing-at-the-mouth fervent repetition of your theories about how the world works will convince reality to allow your gamble to pay off and generate profit to cover your failure to pay up front...even though reality hasn't obeyed you for several decades and there is no indication or reason to believe that it will change its mind. Running a government costs money and there are things the government can, should and MUST do that the private sector cannot, shouldn't or REFUSES TO DO, so suck it up crybabies...the piper has been patient for the past decade, but he's done waiting."

    August 19, 2010 01:47 pm at 1:47 pm |
  13. Henry Miller, Libertarian

    Yeah, exactly what anyone with any sense has been saying: The more money the government steals, the less is available for economic recovery and growth. Even, I suspect, the far-lefties understand this, but they just don't care. They'd rather have a society of government control and universal dependency rather than take the chance that some people might get richer than others.

    August 19, 2010 01:59 pm at 1:59 pm |
  14. spencer akins

    Why can't we get Washington to attack the debt from both sides. Raise taxes and cut program. Say for every dollar taxed, the government would programs by $3 dollars and keep this in place until the deficit becomes more reasonable. Seem simple.

    August 19, 2010 02:09 pm at 2:09 pm |
  15. scott

    .........and what cutting spending and dumping ObamaCare? Keep the Bush Tax cuts, cancel the stupid Social Engineering by the Democrats and Obama and all will work itself out. Government is not the solution it is the PROBLEM!

    August 19, 2010 02:09 pm at 2:09 pm |
  16. jim

    I don't remember a time in recent history where the CBO numbers turned out to be right. It's just impossible to look into the future with certainity when it comes to money.But people on both sides of the political spectrum like to cite them as if they know better than the rest of us.

    August 19, 2010 02:20 pm at 2:20 pm |
  17. Tim

    Duh!

    Me smart, you dumb.

    August 19, 2010 02:24 pm at 2:24 pm |
  18. Eric

    This is a no brainer... think about the math involved...

    Your boss getting to keep more of his own money...
    = less of an economic pinch he will feel...
    = the greater likelihood you won't be let go for economic reasons...
    = an increased possibility of hiring others or expanding the business.

    I mean honestly, you'd have to be a dunce to think that raising taxes on bosses and business owners all across America WON'T be met with those people cutting jobs just make ends meet with the reduced profit.

    And if our dunce president and dunce congressional leadership had ever run a business, they'd understand this very simple concept. I'd have more respect for these people if they had even so much as managed a sno-cone stand.

    August 19, 2010 02:26 pm at 2:26 pm |
  19. bill

    well duh. just what did cbo say.keep bushes tax cuts.expand the deficit.is what america wants. JUST ASKING.

    August 19, 2010 02:30 pm at 2:30 pm |
  20. Glenn Koons

    Din't worry, the lamebrained Dem socialist pacifists will stop the cuts, kill off small business and have the Journolists love them. But, in Nov., voters will think, why did not these dopey Dems follow the CBO's analysis?

    August 19, 2010 02:38 pm at 2:38 pm |
  21. Peter E

    Yeah, but right-wing nuts like the Tea Party want to have their cake and eat it too. They want lower deficits AND they want taxcuts for themselves and their children. And they somehow dare say they shouldn't be the ones to repay the national debt. Guess what! The current American economy, your houses, your very jobs exist because of the trillions of dollars of deficits we've built up over the last century! You DO owe to pay it back! So stop asking selfishly for you to get even further tax cuts and plunging us into greater deficits! PAY THE BILL!!!

    August 19, 2010 02:40 pm at 2:40 pm |
  22. Four and The Door

    "The two things we really need to keep in our heads at once is we should not make the recession worse until we're sure we're on a recovery track by restricting the budget deficit too much," Rivlin said.
    ______________________________________________________
    Do you like how she lumps all budget deficit-creating activities together so that this is all so Obama-friendly? I don't.

    We just spent $3,000 for every US citizen to prove that stimulus spending does not improve a down economy. That was one painful experiment that we don't need to repeat.

    What will it take for this administration and congress to hear what average Americans across the country are saying?!?! Cut spending!!!
    We did it at home. Do it in Washington!

    August 19, 2010 02:42 pm at 2:42 pm |
  23. Hammerer

    After past projections by the CBO how can anyone think that they are anything but an administration propaganda group.

    August 19, 2010 02:49 pm at 2:49 pm |