Fiscal Cliff Deal: $1 in Spending Cuts for Every $41 in Tax Increases

Fiscal Cliff Deal: $1 in Spending Cuts for Every $41 in Tax Increases


by Matthew Boyle31 Dec 2012
biggovernment.com

According to the Congressional Budget Office, the last-minute fiscal
cliff deal reached by congressional leaders and President Barack Obama
cuts only $15 billion in spending while increasing tax revenues by
$620 billion—a 41:1 ratio of tax increases to spending cuts.

When Presidents Ronald Reagan and George H.W. Bush increased taxes in
return for spending cuts—cuts that never ultimately came—they did so
at ratios of 3:1 and 2:1.

"In 1982, President Reagan was promised $3 in spending cuts for every
$1 in tax hikes," Americans for Tax Reform says of those two
incidents. "The tax hikes went through, but the spending cuts did not
materialize. President Reagan later said that signing onto this deal
was the biggest mistake of his presidency.

"In 1990, President George H.W. Bush agreed to $2 in spending cuts for
every $1 in tax hikes. The tax hikes went through, and we are still
paying them today. Not a single penny of the promised spending cuts
actually happened."

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