CBO Director: Gov’t Spending Will Still Rise Even If Taxes Go Up

February 12, 2013 - 2:56 PM

CBO Director Douglas Elmendorf

CBO Director Douglas Elmendorf. (AP photo)

(CNSNews.com) – In a colloquy with Sen. Jeff Sessions (R-Ala.), Congressional Budget Office Director Douglas Elmendorf explained that even if Congress balanced the budget with tax increases, the deficit would still continue to grow over the coming years because federal spending will outpace economic growth.

“If the tax increase is a fixed number of billions of dollars per year, then yes, the other factors [spending] would continue to push up the [deficit],” Elmendorf said during a Senate Budget Committee hearing on Tuesday.

Elmendorf explained that in the CBO’s estimation, federal spending will outpace economic growth, meaning that even if Congress passed large tax increases to balance the budget, the revenue brought in from those tax increases could not keep up with federal spending.

“After the middle of this coming decade we show spending continuing to rise as a share of GDP,” he explained.

In other words, the CBO estimates that federal spending will continue to grow faster than it projects the economy to grow, meaning that even if the government were to balance its budget by raising taxes, it would only be temporary because spending would grow faster than the government could take in more revenue, creating a permanently increasing deficit.

Sessions summed up the issue, saying that because federal revenue will never keep up with the growth in federal spending under current policies, the federal government faces a spending problem.

“This is the reason I think it’s accurate to say that we have fundamentally a spending problem,” Sessions said. “Because if your revenue is not going to keep up with the spending because we’re on an automatic course through entitlements and other programs and all our desires to spend more, then you are not going to get the country on a sound path.”