For those who wondered how we would pay for such a large cut to the government’s revenue stream, the Republican prospectus had a remarkable claim. The tax cuts wouldn’t cost us anything. Growth would be so strong that the tax cuts would more than pay for themselves.
In fact, we see that revenue for 2007 was $2.57 trillion, higher than what the White House had projected in FY2005 and almost exactly what was anticipated in FY2003. The truly interesting data, however, is not on the revenue side, but spending. In FY2003 the Bush administration estimated spending for 2007 at $2.47 trillion, while actual spending clocked in at $2.73 trillion -- a difference of $260 billion in the wrong direction. Furthermore, had the Bush administration actually spent its projected amount, the federal government would have enjoyed a surplus of $101 billion.