Press Releases | Budget, Taxes, and Public Investment

News from EPI What goes into a budget deficit?

For Immediate Release: Wednnesday, May 18, 2011
Contact: Phoebe Silag or Karen Conner, 202-775-8810

Though the Great Recession is technically over, the economic downturn still has a large impact on the budget and is responsible for almost half of the projected deficit next year.  Today’s Snapshot shows that the Bush tax changes, which were recently extended through the end of 2012 in the December tax deal, constitute 19% of the projected deficit, while war spending in Iraq, Afghanistan, and other overseas operations represent another 15%.  In contrast, economic recovery measures make up only 16% of the 2012 deficit, which does not take into account that these measures have also had positive effects on both employment levels and other areas of the budget.