Budget Deficit

Over the past four years, Congress and the White House have handed out billions of dollars in tax cuts aimed at “giving back” surplus revenues to taxpayers. Congress has also enacted an expensive, new Medicare prescription-drug benefit as well as hefty spending increases for the military and homeland security. Now Congress wants to make permanent most of the tax cuts it first passed as temporary measures. Republicans say the cuts will spark economic growth. But many economists say the cuts will ensure substantial deficits for decades to come and trigger a budget crunch requiring cuts in social programs such as student loans, child-support enforcement and subsidized school lunches. Moreover, economists generally agree that running up new debt just before the baby-boom generation begins collecting expensive Medicare and Social Security benefits in 2011 will require tax increases and service cuts at unprecedented levels in the coming decade.