For deficit hawks, all of the news is good news.
The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.The decrease is almost entirely due to revenue increases.
Not only is this year's deficit on track to be significantly smaller than last year's, to the tune of about $200 billion, it's also on pace to be even better than optimistic projections from February. Hell, we even ran a surplus in April.
All told, the U.S. federal deficit will be about $600 billion smaller than it was in President Obama's first year in office, making this the fastest deficit reduction Americans have seen since World War II.
And with that, let's pause to note what a terrible mistake it is for Republicans to continue to prioritize a perceived problem that's quickly improving.
But let's also note another tidbit of information: one of the main reasons the deficit is shrinking so quickly is the increased revenue from the tax hikes that began in January. My question for Republicans is, didn't you guys say this was impossible?
In recent years, the fiscal debate has been mind-numbing for a variety of reasons, but one of the more exasperating elements of the debate has been over the efficacy of tax revenue. Democrats would say, "If you want deficit reduction so much, let's raise taxes and close the budget shortfall." To which Republicans would respond, "That can't work, because higher taxes necessarily serve as a drag on the economy, which in turn prevents job creation, which in turn prevents more Americans from paying taxes in the first place."
GOP policymakers routinely compared this policy -- reducing the deficit through increased tax revenue -- to dogs chasing their tails.
Well, here we are several months later. After the higher taxes kicked in, we saw the strongest job creation in eight years and the deficit is even smaller than expected.
Any comments from the Republicans who assured us this couldn't happen? Any explanation as to how the impossible became possible?