(CNSNews.com) – Federal revenue will return to its pre-recession levels in 2013, according to projections from the Congressional Budget Office (CBO), setting a record for the most money the government has ever taken in.
In its latest Budget and Economic Update, the CBO forecasts that federal revenue will top $2.7 trillion in 2013, slightly higher than the $2.6 trillion the government collected in 2007, when the last recession officially began.
Government revenues had fallen by nearly $500 billion during the recession to $2.1 trillion in 2009, contributing to the $1.5 trillion deficit that year. However, federal revenues have been recovering since the recession ended in June 2009, and the CBO now projects that they will slightly eclipse their pre-recession peak.
In fact, the $2.7 trillion in revenue will be the most money the federal government has collected in history.
According to historical tables compiled by the White House Office of Management and Budget, the government has never collected more than the $2.6 trillion it collected in 2007, meaning that if CBO’s projection is correct, it will set a new record for revenue collection in 2013.
This projection could undercut a key argument made by the White House that any balanced approach to deficit reduction must include more federal revenue in the form of “tax reform.”
“Now, I think this balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction,” President Obama said in a speech on February 5.
Republicans counter that additional tax revenue is not necessary, citing the tax increases on wealthier Americans they agreed to as part of the January deal to make permanent most of the Bush tax cuts.
Instead, they argue, the focus should now turn to cutting federal spending rather than raising further tax revenues.
“Democrats say we should replace the president’s ‘sequester’ with revenue increases, or delay it. Republicans say we should replace [it] with responsible reforms that will help put us on a path to balance the budget in 10 years,” House Speaker John Boehner (R-Ohio) said at a news conference on Wednesday.