Cut the deficits now! Now I tell ya!

The US budget deficit is falling at the fastest rate since the end of WWII:

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year—at 4.0 percent of gross domestic product (GDP)—will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

Because revenues, under current law, are projected to rise more rapidly than spending in the next two years, deficits in CBO’s baseline projections continue to shrink, falling to 2.1 percent of GDP by 2015. However, budget shortfalls are projected to increase later in the coming decade, reaching 3.5 percent of GDP in 2023, because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt. By comparison, the deficit averaged 3.1 percent of GDP over the past 40 years and 2.4 percent in the 40 years before fiscal year 2008, when the most recent recession began. During the next 10 years, both revenues and outlays are projected to be above their 40-year averages as a percentage of GDP (see figure below).

The Republican response? We need to cut more:

The lawmakers said the gap between revenue and spending is closing, but not by nearly enough, so they are sticking to their goal of balancing the federal budget within a decade.

On Tuesday the Congressional Budget Office said strong tax and other revenues caused it to slash its fiscal 2013 deficit forecast by more than $200 billion – to $642 billion, the smallest gap since 2008.

CBO said the brighter picture could push a deadline for raising the debt limit – necessary to avoid default on U.S. debt or a partial government shutdown – into November, from previous estimates of late July or early August.

When Republicans agreed to extend U.S. borrowing capacity in February, they had anticipated a summer deadline for raising the limit – over which they would demand cuts to Social Security and Medicare.

“It may change the amount and the size of the debt ceiling but it doesn’t change the reality of the debt ceiling,” said Representative James Lankford, a member of the House Republican leadership and the Budget Committee.

Gee, it’s almost as if they want to cut social spending and are using the deficit as an excuse –now that the deficit is falling, they’ll find another reason to cut (kind of how George W Bush argued for a tax cut because there was a surplus and then when the surplus went away argued for it because there was a recession).

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