Two men who gambled on tax evasion schemes lost
IRS allows businesses to withdraw improper ERC claims

Some explanations as to why the federal deficit doubled

Rolls of 100 dollar bills_alexander-mils-QQTWXq3WWxE-unsplash
Unsplash+ in collaboration with Alexander Mils

The Freedom Caucus on Capitol Hill is getting a lot of attention since one of its founders, Ohio Republican Rep. Jim Jordan, sought to replace ousted House Speaker Kevin McCarthy.

The group, generally considered the most conservative and furthest-right bloc within the House GOP membership, was formed in January 2015 by conservatives who were emboldened by the Tea Party movement.

You remember the Tea Party. It garnered much attention back in 2011 in its fight with the Internal Revenue Service over agency vetting of conservative (and, it ultimately was revealed, other) groups' applications for nonprofit tax status.

That was no surprise, as tax issues were at the core of the Tea Party movement.

When it was formalized in 2009, its members called for lower taxes and cutting government spending to reduce the national debt and federal budget deficit. Tea Partiers elected in 2010 took that message to the halls of Congress.

Deficit back in the spotlight: While social issues have of late dominated right-wing politics and campaigns, the origins of the Freedom Caucus nee Tea Party came to mind last week as I read about the sudden explosion of the federal deficit.

The gap between what the federal government spends and what it brings in effectively doubled in 2023. The tally at the Sept. 30 end of the fiscal year show it now stands at $1.7 trillion. That's up from $1.37 trillion in fiscal 2022.

The Biden Administration and Democratic House and Senate party leaders are blaming the Republican tax cuts in the 2017 Tax Cuts and Jobs Act. Business tax breaks were made permanent in the GOP tax reform bill. Individual tax cuts are set to expire at the end of 2025.

Meanwhile, Republicans are resurrecting Tea Party deficit reduction language and demanding spending cuts. Of course, the GOP majority int he House has to elect a new speaker first.

As we wait for that to happen, and spending battles to keep Uncle Sam's offices open past Nov. 17, this weekend's Saturday Shout Outs go to some articles looking more closely at the growing federal deficit.

"The Federal Deficit Is Growing. This Is Why" is the headline on the New York Times article by Jim Tankersley. He examines why the deficit widened even though the U.S. economy grew faster than expected over the last year. 

"U.S. payments on debt spike to $659 billion, nearly doubling in two years," writes Jeff Stein in the Washington Post. The federal government's interest payments are at record high, notes Stein, and among the country's largest annual expenditures.

"Why America's deficit doubled to $2 trillion in one year" is explained in Neil Irwin's piece for Axios. Understanding why, says Irwin, is key to revealing something important about how inflation and debt interact. 

The U.S. Treasury release of the "Joint Statement of Janet L. Yellen, Secretary of the Treasury, and Shalanda D. Young, Director of the Office of Management and Budget, on Budget Results for Fiscal Year 2023" offers the official numbers breakout and discussion of the deficit increase.

"The Federal Deficit Is Even Bigger Than It Looks" is the disconcerting headline on the Wall Street Journal article by Andrew Duehren and Alana Pipe. They note that student-debt cancellation complicates the numbers as higher interest rates make borrowing costlier.

But we get a bit of hope from the Brookings Institution, which says there's "No need to panic about the budget deficit." In the commentary piece, Louise Sheiner tells us, "The rise in the deficit this year isn't because of a sudden surge in spending — it mostly reflects a fall in revenues from unusually high levels last year."

Finally, a shout goes out to a Pew Research Center analysis from May that gives up "6 facts about Americans' views of government spending and the deficit."

Politcal party views of deficit reduction_Pew Research Center
In synthesizing various Pew surveys for the article, Ted Green tells us we Americans have "nuanced views on related issues such as the preferred size of government, the amount of government assistance to the poor, and the priority of reducing the budget deficit." 

Yeah, this is a lot to digest, especially on a weekend. But the tally of what we taxpayers ultimately owe for various federal programs and how to pay that bill affects us all.

You also might find these items of interest:

 

Advertisements

🌟 Search Amazon Cell Phones & Accessories 🌟
The text link above and image links below are affiliate ads. If you click through and then buy a product, I receive a commission.



 

 

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)