ataxingmatter

Economic conditions: spending, taxes--both count

The theme of this blog (in case you've missed it) is 'democratic egalitarianism', which means that I cover issues in a wide range of areas encompassed by economic conditions, taxation, poverty, inequality, and democratic institutions.  When the credit crunch hit and started a cascade of economic concerns, including a terrible crunch between gas prices and stagnant wages for lower income Americans, Congress passed an "economic stimulus" bill to provide cash rebates to most taxpayers not in the top 20% of the income distribution.  I urged something more pointed--funding for infrastructure projects that could have long-term positive impact on the economy, and more targeted funding for people with the greatest needs, such as extension of unemployment compensation.  Congress is finally moving in that direction.  The House just passed --by a 2/3rds majority-- a bill that would extend unemployment compensation.  David Stout, Unemployment Aid Extension Easily Passes House, NY Times, Jun. 12, 2008.  This is essential legislation, so let's hope the coalition of Democrats and Republicans holds together to enactment.

CTJ Finds House Budget Plan Superior to Senate Plan

In a new report, Citizens for Tax Justice (CTJ) finds that the "Budget Plan Approved by the House Deals with Tax Policy in a More Responsible Way than the Senate Version" (Mar. 20, 2008).  "For a nation facing a stalled economy, a healthcare crisis, and a war entering its sixth year, it's hard to imagine how lawmakers can justify giving priority to new tax cuts for the affluent.  The House-Senate conference commmittee that takes up the budget resolutions should reject the choices that the Senate has made." Id.

• The House bill provides reconciliation instructions that would make it easier to offset any AMT relief provided, but the Senate assumes any AMT patch would be deficit-financed, even though AMT relief benefits the best-off fifth of familes in America (excluding the one percent at the very top, who pay tax under the regular tax system at higher rates).  If the AMT is deficit financed, it will mean that middle-class Americans will bear a significant share of the debt burden to pay for the relief for the wealthiest Americans in the upper quintile.

80% of Americans have incomes of less than $88,000, and the AMT patch extended into 2008 provides no tax relief at all for most in this group, and only a small tax cut for those who do get AMT relief--those in the very middle quintile who earn $32,000 to $52,000 would see an average tax cut of a little more than $650, and those in the fourth quintile who earn $52,000 to $87,000 would see an average tax cut of a little more than $900.

In contrast, Americans 5% just under the top 5%, with average $147,000 in income, get an average of $2,514 from AMT relief.  The next 4%--those just under the wealthiest Americans who end up mostly paying regular tax--have an average income of $249,000 and receive an average AMT tax cut of $4,417.

• The Senate intends to cut the estate tax even more for the few extraordinarily wealthy families that are subject to the tax, paying for it with unpredictable budget surpluses.

"This would be a boon for the very wealthiest Americans but would provide no benefit whatsoever to 99 percent of all taxpayers."

The Senate plans to finance the huge cut in taxes for the very wealthiest multi-millionaire families in this country how?--by using Social Security surpluses! The Senate legerdemain  assumes that after 2012, the surpluses won't be needed to pay for the other Bush tax cuts and the war in Iraq. 

Now, folks, the Senators can't be serious.  Or else they are going about this budget plan the way they went about approving Bush's tragic idea of invading Iraq in the first place--with their eyes closed and their nostrils pinched.  Read my post on Stiglitz and Bilmes' calculation of the likely costs  of the Bush war in Iraq--in the best case scenario, it's $3 trillion--enough to make up for the much lamented future shortfall in Social Security funds. 

CTJ provides a state-by-state graph showing the extraordinarly small percentage of estates in 2005 and in 2006 that owed any estate tax upon the death of the owner.  That's worth looking at. 

I noticed a National Association of Manufacturers blog recently pushing estate tax repeal.  The author of the blog item claimed that the small percentage of estates owing tax was due to the fact that only a small percentage of the population died each year--completely warping what the facts show.  Folks, if you are confused, let me state it clearly.  The fact that less than 1% of estates pays any estate tax in this country, under current law,  means that fewer than 1 out of every 100 deaths will result in any estate tax liability.

• The Senate plan cuts taxes on better-off Social Security recipients, reducing revenues that are needed to shore up benefits for the future while benefiting only seniors who are well off to start with.

As CTJ explains, the government increased the taxation of Social Security benefits in 1993, in order to "treat Social Security more like other retirement income such as pensions and IRA distributions. For most retirees, the vast majority of Social Security benefits are income that has never been taxed." 

It's only the best off seniors that are required to pay tax on 85% of the benefits.  Again, CTJ has a useful chart, showing that Seniors in the $200,000 or higher income range are the ones that get the largest tax cut ($2,600) while seniros with incomes less than $50,000 get a tax cut of only $300 to $400.

House and Senate Budget Resolutions

The House and Senate voted (Thursday and Friday, respectively) on budget resolutions: H Con Res 312 and S Con Res 70.  See this New York Times story.  These are not binding, but give some sense of the direction that spending and tax bills may take as discussions progress--a "policy manifesto", as the Times article points out.

For the House Committee on the Budget description of FY 2009 budget and discussions, see this link.

So what policies are manifest here?  The Senate extended the $1000 child tax credit by a vote of 99-1, but thankfully defeated a move --although only 47-52--by Sen. Graham to make permanent the low capital gains rates (and dividends rates) of the Bush cuts for the wealthy.  Both would either let the tax cuts for the wealthy expire or pay for them with offsets elsewhere.  The House would pay for any AMT action with offsets, while the Senate is adopting an attitude of "gotta do it, no matter what the cost."  (As readers know, this AMT approach is silly.  The Senate should quit thinking of people who earn more than $200,000 as being middle class, since they are clearly not but rather in the very top privileged elite.  We don't have to protect anyone but those earning under $80,000 from the reach of the AMT.) 

Regretably, the House didn't support an amendment offered by Caroly Kilpatrick of Michigan, which would have repealed the 2001-2003 tax cuts for those making more than $200,000 while also cutting back on various of the provisions that have handed corporations a low or zero effective tax rate.  (No Republicans voted for it.)

While McCain disingenously suggested that not making permanent all of the Bush tax cuts that benefited the wealthy would be a tax increase and would keep food off families' tables, Candidate Obama's comment went to the point:

"The notion that we would pile up more mounds of debt, literally borrowing hundreds of billions of dollars to pay for tax breaks for people who don't need them and weren't even asking for them I think is unfortunate," he told reporters Thursday. "I think it's an example of the kinds of flawed fiscal policies that have gotten us in such a hole under this administration and a Republican Congress."  Id.

Not renewing the Bush tax cuts for the wealthiest families in America is not a tax increase, folks.  The tax code is replete with various temporary provisions.  The reason they are temporary is that the enactors are not sure whether it is wise to make them permanent--they may serve a short-term purpose, but they may be harmful in the long term.  The logic for the original Bush tax cuts was that the country had a surplus and instead of paying off debt, the surplus would be "returned" to the taxpayers.  By the time it was enacted, there was no prospect of a surplus, and the logic became a stimulus to growth.  The enactors knew that the price of permanent enactment of the cuts was too high and couldn't be logically supported.  Of course, if you believe the fallacy of the Laffer Curve, then all tax cuts raise money.  But that is nonsense, and members of Congress know it is nonsense.

If we want to fund this country's priorities and the many needed repairs to public infrastructure and human capital needs, we must have sufficient funds.  We have and will spend enormous sums on Iraq:renowned economist Joseph Stiglitz and his co-author Linda Bilmes now estimate that we are funding a $3 trillion dollar war.  All the while, the dollar is going down, oil is heading up and up, and our country's debt is similarly in the stratospheres at $9 trillion or so (with our individual shares being about $30,000!).  It simply makes no sense to continue borrowing money to forego needed domestic programs in order to fund a tax cut for the privileged wealthy in this country who can easily afford to pay taxes at the rate they were paying in 2000.

That goes double for the continuing Republican effort to repeal (or eviscerate so it will be easier to repeal later) the estate tax.  The New York Times editorial page for March 13 described the Republican effort in the Senate as "new hope for the rich."  While Americans are getting poorer, with home equity falling and typical household income, adjusted for inflation, below its 2001 peak, the Republicans want to eliminate the estate tax that in 2009 will only tax couples with more than $7 million!   That's already too large an exemption and shouldn't be retained at that amount.

Budget considerations: transparency, budgets and the CBO report on the military

The White House has released a new budget and the Economic Report of the President this month, both painting still rosy pictures about the economy in spite of the credit crunch and strong worries of recession that have colored the last few months. 

The FY 2009 Budget proposal claimed to cover the full costs of the so-called "global war on terror" for 2008, but noted that the costs of continuing war spending in 2009 were left to be evaluated--ie, not included in the FY 2009 budget.  Similarly, the AMT was dealt with in a one-year patch, with no attempt at genuine reform. The budget proposed a significant increase in military spending for various unspecified threats, use with allies, and to "transform the military."  Id. at 17-18.  With these massive military increases (even without any specified supplemental amounts for the wars in Iraq and Afghanistan), the budget proposal promised a future balanced budget through massive cuts to Medicare and other domestic programs while retaining the 2001-2003 tax cuts for the wealthy and ignoring the growing concerns of huge numbers of Americans who are faced with considerable economic insecurity. 

The Economic Report begins with a statement lauding "the past 6 years of economic expansion" in which "the American economy has proven its strength and resilence" based on "sophisticated capital markets, flexible labor markets, low taxes, and open trade and investment policies."  If you look at the table of contents here you will not see one that is labeled "the costs of war and war-related activities" or "the amount we are spending on the military."   

The gap in information in these two documents about the supplemental war budgets has been filled, at least to some extent, by the Congressional Budget Office (CBO) in a report requested by Congress, Analysis of the Growth in Funding for Operations in Iraq, Afghanistan, and Elsewhere in the War on Terrorism, Feb. 14, 2008.  The report finds that a cumulative total of $752 billion will have been spent on the wars by the end of FY 2008 (assuming the Congress funds the administration's request as they stand).   

The report is especially interesting for what it shows about the lack of transparency in this funding and the gradual expansion of the requests by the military.  This supplemental war funding before 2005 was used for mobilization of troops, transport of supplies and troops, and purchase of various consumables (spare parts, oil, etc.).  But beginning in 2005, the military also requested funds as part of this process for use in "resetting" the military--i.e., for repair and replacement of equipment and even major overhauls or upgrades to equipment.  In 2006, the military expanded the use of funds to include buying new equipment.  In 2007, the expansion of use of funds continued; now, the military added new types of expenses to those that it wanted covered by these appropriations--not just the direct costs of the wars in Iraq and Afghanistan, but other costs as well.  in other words, these funds began to cover not only the current wars but preparations for future activities in the military's "war" on terrorism.  According to the CBO, these changes meant that procurement funding soared in 2007 and 2008, taking 35% of the requested funds.  As a result, annual war funding levels have increased by 155% since 2004.

The review of this funding is hampered by the lack of information provided by the military.  It customarily provided little information to support the supplemental war funding requests.  Even when it provides information, much of it is aggregated in a category that is labeled "operating forces, additional activities." The CBO noted that it could not, therefore, identify fully the causes of the growth in appropriations.

We should be aware of this information as we consider requests for tax policies that would result in revenue reductions.  We have spent $752 billion on six years of war.  It will likely continue to cost enormous sums, handled through short-term emergency appropriations rather than as part of the ongoing budget process.  Any demand for making the 2001-2003 tax cuts permanent has to be evaluated in light of these expenditures and the likely increasing demand for military funding to "reset" lost equipment and retool for other activities. 

We need to think about priorities in a way that we have not done in the past six years, when we have cut taxes while going to war, resulting in massive increases in borrowing.  What should we do in the next few years to meet our security needs while satisfying domestic requirements?  Making the 2001-2003 tax cuts permanent does not seem to make sense in this context.

President's Budget: useful commentary

OMB Watch has a useful collection of commentary--from both inside and outside the government--on the White House budget of FY 2009.  It's at this link.  Here's a sampling of what you will find.

Center on Budget Policy and Priorities:  Congress and the President are required under current law to point out and devote special consideration to the question of whether more than 45% of the costs of Medicare will be covered by general revenues.  Here's what CBPP has to say about this Medicare "trigger".

Some have portrayed this “45-percent trigger,” mandated by the prescription drug legislation enacted in 2003, as necessary to address Medicare’s serious long-term financing problems.  In fact, the 45-percent limit is an ideologically driven target based on a misleading measure of Medicare’s financial health; its primary effect likely will be not to strengthen Medicare’s financing but to take certain options for improving Medicare financing off the table.

The Committee for a Responsible Federal Budget:  looks at the deficits (growing), the tax cuts (growing) and the spending cuts (growing--if you believe that the federal government will cut $200 million from Medicare and Medicaid in order to fund the growing tax cuts for the elite).

At this time last year, the White House was projecting a deficit of $239 billion for FY 2008—now it is estimating a deficit of $410 billion.

Enjoy sampling the rest--as always on the OMBWatch site, there is some useful information here.

President's Budget: Cost of Making the 2001-2003 Tax Cuts Permanent

Citizens for Tax Justice (CTJ) has an interesting analysis of the tradeoffs Mr. Bush thinks are appropriate in order to reach what is claimed to be a balanced budget in 2012.  (Or course, it wouldn't really be balanced, because, in addition to the impracticality of much of the budget, it ignores the long-term AMT problem, and it disregards the long-term costs of Bush's war of choice in Iraq.)

The article's title says a good bit of the story:  Bush's Proposals to Slash Human Services Reveals the True Cost of His Tax Cuts.  Even though the budget deficit is expected to be at least $410 billion in FY 2009, Bush claims it can swoop down to zero by FY 2012. That's even with making his tax giveaways for the wealthy (i.e., the 2001-2003 tax cuts) permanent, at a cost of $249 billion in 2012.

How is this magical trick to be done.  While he gives to those at the top, Bush would take away from just about every other program that performs important public services--about $229 billion less would be spent on education, veterans, the environment, transportation and health care in 2012 because of the cuts. 

Under the Bush budget proposal, federal spending on veterans’ benefits would be 9 percent lower in 2012, as a percentage of the economy, than in 2008. Education and social services would be a fifth lower, natural resources and environmental programs over a fourth lower, transportation a third lower and community development over 62 percent lower. Medicare spending in 2012 would be 9 percent lower than in 2008, as a percentage of the cost of maintaining current services.

Now, one of the regretable facts about the Iraq war is that our need to spend money for the care of war veterans will escalate sharply over the next twenty to thirty years as the many thousands of wounded and disabled vets continue to need care.  We now have accepted the scientific consensus that global warming is upon us and that we will face dire environmental consequences if we do not act now to prevent the worst damage.  An aging population will need more health care, not less, unless we want to return to the specter of the pre-Roosevelt and Great Depression years when elderly citizens were left destitute, homeless and at the mercy of whatever charity might help them out (or not). 

Instead of cutting these programs in order to provide unneeded tax breaks to people that are making $200,000, $500,000 or millions of dollars a year, we should be increasing these important programs and let the tax cuts die their natural death for anybody making $200,000 a year or more (at least).  Keep the estate tax, and don't set the exemption so high that it lets huge estates off the hook.  A $2 or $3 million exemption level and a 55% rate on any amount subject to tax above the exemption level would be workable.  And for goodness sakes quit eviscerating the business tax by letting businesses expense new purchases of long-term equipment that should be capitalized under an income tax system.

President's Budget: Making the 2001-2003 tax cuts permanent?

In a prior post, I noted some of the parameters of the Administration's FY 2009 budget proposal.  This budget trots out tired proposals that continue to have associated with them the same critiques of the past (e.g., volutary privatization of Social Security accounts).  It leads to huge deficits that are claimed to miraculously convert to surpluses sometime out in the future.  But the only way it gets to surplus is by a fictional journal that won't be taken by Congress:  major cuts in Medicare and Medicaid benefits and almost every other important federal program.  Even with all that, the budget admits to a pretty damaging budget deficit for this next fiscal year: probably the biggest ever, though somehow they've finangled a claim that its a few billion less than the record $413 billion deficit that the Bush Administration already lays claim to. 

Trying to claim a budget surplus will appear by 2012 is particularly hard when funding the massive appetites of the military for money and of the wealthy for tax cuts.  So there's a good bit of pretending going on in this budget--pretending that some of the spending won't happen, for example, and pretending that Congress is happy with the AMT continuing to clawback the upper middle class's share of the Bush tax cuts and won't even do a regular patch.  Pretending is nice, but most of us learned a long time ago that we can't pay the bills with play money.  The play money for the US has been the debt we've borrowed to make it possible to give back to the wealthy while constantly making supplemental appropriations for Bush's wars in Iraq and Afghanistan (more than $600 billion and counting).

In short, making the full package of the Bush tax cuts permanent is about as far from a sensible thing to do as one could imagine.  At most, the tax cuts that affect the lowest income taxpayers could be made permanent.  For the rest, let's let them go to their pre-ordained grave at the end of the decade.

The OMB Budget Watch has a good article on the President's budget, at this link.  The discussion of the tax cuts is so good that I've excerpted it here for you.

Balanced Budget Gimmicks Enable Case for Making Tax Cuts Permanent
The drastic level of cuts in non-defense discretionary spending in this budget, especially in the out years of the budget window, along with unrealistic assumptions about the costs of the wars in Iraq and Afghanistan and AMT reform, are proposed in order to show, at least on paper, a world where the president's 2001 and 2003 tax cuts can be extended without imperiling his projection of balanced budgets in 2012 and 2013.

In fact, extension of those tax cuts is tremendously expensive ... [Treasury Secretary] Paulson makes no effort to disguise the enormous costs associated with extending these tax cuts — over $2 trillion.

He would have us believe, however, the federal budget can absorb these additional costs, the bulk of which would appear in 2012 and 2013. In those years, the president's budget projects extending the 2001/2003 tax cuts would cost $237 billion and $255 billion, respectively. When the budget's unrealistic assumptions about war and AMT reform costs, as well as politically infeasible cuts to popular programs, are factored in, the idea that the federal budget could come anywhere near balance within the five-year window covered by the proposal requires the willing suspension of disbelief.

Despite the massive cost and questionable economic benefits of the first-term tax cuts, the FY 2009 budget continues to recklessly advocate for their permanent extension without offsets, giving additional benefits almost entirely to the wealthiest in America and continuing to drive massive build-ups of debt. Extending the tax cuts through the budget window would cost $665 billion over the next five years and almost $2.2 trillion over the next ten years, according to the president's budget. These are costs the country is unable to bear.

Effect of Making Permanent 2001 and 2003 Bush Tax Cuts (millions of dollars)
2008	2009	2010	2011	2012	2013	2009-2013	2009-2018
-422	-2,077	-13,095	-158,453	-236,584	-255,388	-665,597	-2,185,294

President's Budget

The White House has released a $3.2 trillion budget proposal for FY '09, available at this link.  You can find the so-called "blue book", the Treasury Department's Explanation of the Budget Proposal, at this link. 

It looks a lot like the same old tired claims that reducing revenues by letting corporations pay almost no taxes and focusing tax cuts on the elite will make our economy boom.  The jargon of "making businesses more competitive" continues to be used.  (See the second paragraph of the Blue Book explanation.)  This is a problem, as I've pointed out several times, because often we are just making US multinationals more competitive with other US multinationals--it is not clear that there is any real public good gained from that.

Like much of this administration's budgetary claims, this one claims to be able to accomplish the magic of lower tax revenues and higher spending (a good bit of it unacknowledged--especially how to pay for the $148 billion stimulus package that is not included, or how to pay for a proposed ongoing AMT patch for tax year 2008 that would continue to hold those making more than $100,000 harmless from the AMT that is not included, or how to cover the foreseeable and ongoing military spending to continue the administration's trajectory in Iraq) while creating a budget surplus (albeit, not until this administration is long gone--in 2012). 

The Bush Administration is still bringing out its old sawhorses.  It of course argues for making the 2001-2003 tax cuts permanent, claiming they have been the savior of the economy--according to the Blue Book, making the nation's tax system "fairer, simpler, and more pro-growth."  Of course, the tax cuts are not fair, since they are targeted towards the elite.  They haven't increased simplicity in any way that assists ordinary taxpayers (though the elite love the move towards zero taxation of some of their capital gains).  The economy has only barely managed to keep most American citizens in a steady state and all the growth (what little there has been) has gone to those at the very top.  The job creation record for the past 7 years is abysmal, which does not speak well for the effect of the Bush tax cuts on the overall economy.  (But don't expect to see much about that in this budget.)  The Administration proposals also continue to push ahead for a start on privatization of social security ("voluntary" personal private accounts) and cutting away the employer-funded healthcare lifeline that most working Americans depend on (changing from an employer-provided healthcare system to a standard deduction for health care of $15,000 for families and half that for individuals).  Both of those programs wreak havoc on the economic system and are primarily beneficial to those at the top of the income distribution curve.  They place even more of the risk of a shaky economy on the back of those who already have been hit by stagnant wages and offshored jobs.  They do nothing whatsoever to address the real crises of getting health care to those that can't afford insurance now or of setting our spending priorities to meet genuine public needs.  The Administration also wants to further expand tax-free savings opportunities--again, an expansion moving us more to a consumption than an income tax and one that only those in the upper crust can take advantage of, since ordinary taxpayers can't even save the amounts already able to be set aside tax free.

Government revenues from corporate taxes continue to go down and overall government revenue is expected to go down next year.  But no matter.  Bush wants to extend the corporate welfare gravy train, in various ways.   Here's two of them I particularly dislike.

• Making research and development credits permanent.  That's a dollar for dollar tax reduction for the kind of innovative work that every corporation should and does do without a tax incentive, if it expects to have any long-term economic viability.  I see no justification for the R&D credit.
• Making permanent the the 'active financing' exception (section 954(h)) in the international provisions of the Code, which relates to the determination of the "foreign personal holding company income" of "controlled foreign corporations" (CFCs).  Before the 1986 reforms, banks were allowed a pass on their passive income (interest and dividends, etc.) earned in CFCs.  The 1986 reform eliminated that exception for passive income.  But in 1997, the Congress passed a temporary measure (vetoed by Clinton as a line-item, but the line-item veto was subsequently found unconstituional, and passed again in 1998) again allowing a deferral for "active financing" income for financial institutions.  That measure has consistently been extended (sort of like the AMT patch).  The deferral is something that financial institutions lobby for, and they'd like to have this nice perc made permanent.  It's a bad idea; instead, it's time to end the active financing exception to the CFC rules.

The US Budget: up, down, where?

The news these days is a roller-coaster.  One day Wall Street is feeling more positive, and stocks go up.  Oil prices are so high that some people are almost treating them as irrelevant--it's strange when it is good news that oil is just under $90 a barrel.  Another day, worries about the subprime crisis expansion among big banks gets everybody down.  Today, the New York Times notes the impact of higher unemployment figures than analysts expected, leading more to predict a US recession is either in the offing or already begun.  The Fed may cut rates, or not, but people are less sure than before that the Fed can solve the deep fiscal problems.

At the same time, Congress has to make some decisions fairly soon about a number of significant tax issues.  One of those is the AMT.  Republicans appear to want to continue to provide a one-year patch, at least, without finding new revenues to cover it.  It's part of the pretense that the Bush 2001-2003 revenue reductions were really almost costless and the further pretense that the Republicans care as much about ordinary taxpayers as they do about people at the top of the income and wealth distribution.  So they are insisting on an AMT patch, but just as insistently refusing to support reasonable revenue raisers, like taxing the compensation of wealthy hedge and equity fund managers the same way we tax the compensation of truck drivers and waitresses--i.e., as ordinary income.  See this discussion at OMB Watch.

Into the mix should be added the Congressional Research Service report, Would a Housing Crash Cause a Recession? Nov. 7, 2007.Download crs_report. Housing Crisis. RL34244_20071107.pdf .  The summary is enough to dampen holiday spirits, becasue the CRS answers its question with a resoundingly strong maybe, listing four channels whereby declines in house prices could result in aggregate declines in spending:

1. builders reduce residential investment because of lower prices
2. since mortgages are tied to house values, declines in housing lead to financial instability, which we have been witnessing in terms of a liquidity crunch caused by subprime mortgage-backed security problems
3. lower house pricess leads to less consumer spending, since homeowners don't think of their homes as provided increasing wealth to back up their spending
4. impending mortgage resets to higher payments cause significant financial distress for a growing number of homeowners who will be forced to reduce consumption spending

The report concludes that the government can take some actions to forestall recession, and that housing prices alone are likely not enough to cause a recession but could well "tip an already tepid economy into recession."

Budget Deficits: Citizens for Tax Justice Release

Citizens for Tax Justice (CTJ) has just released a new analysis of the U.S. budgetary situation, in light of the Senate Finance Committee's legislation to increase the debt limit, yet again, to $9.815 trillion.  CTJ, as usual, puts together some very effective (and colorful) graphs to make its points.

For most of us, it is very hard to comprehend a trillion dollars.  Yet under Bush, this country's debt limit has expanded from $5.950 trillion to $9.815 trillion in only seven years.  Perhaps this is just a reflection of the basic position of many of this administration's top executives.  After all, back in 2002, Cheney made clear his view that “Reagan proved deficits don’t matter.”  See John Cassidy, Taxing, The New Yorker, Jan. 26, 2004.  And the administration has pushed through a series of revenue reductions over its one and one-half terms that have handed back money to the best off while failing to fund programs at the level required and yet spending billions in a war that few people think we should be fighting.  As the CTJ report notes, federal tax revenues are "near their lowest levels as a share of the GDP in 55 years" while the cost of the Bush tax cuts (taking into account financing costs) are about half of the increase in the government debt.