Session 10: Revenue, Transition Considerations and Other Facts of Life

Tom Barthold, Chief of Staff of the Joint Committee on Taxation, and Mark Mazur, Deputy Assistant Secretary for Tax Analysis at the Treasury Department, discuss revenue, transition considerations and other taxation issues. The federal fiscal situation is not in order, it's not on a sustainable path. Last year and this year, we are going to have the highest deficits since World War II. Last year, we were facing bigger deficits than it actually turned out at the close of the year, but it was still 9.7 percent of GDP or $1 .4 trillion for one year, which is a historic deficit in a nonwartime period. This year, it looks like it's going to be slightly less - $1 .3 trillion is the current estimate. Under the President's budget, with extensions of the 2001, 2003 tax cuts and other initiatives, the deficits would be, under OMB's estimates, at about $8.5 trillion over 10 years. So, we're looking at significant deficits through this period. Perhaps they level off at more reasonable or more historic rates.