Deficit Reduced Substantially, But Sequester Still Killing Jobs

When President Obama took office, the U.S. budget deficit was $1.4 trillion dollars.  In 2013, it was less than $680 billion.  In 2014, it’s projected to be about $514 billion.

And here’s more good news.  Revenues taken in by the federal government are expected to increase by 9 percent in 2014 to $3 trillion, while spending will increase by only 2.6 percent.

The increase in federal revenues is due to a few factors.  First, some tax cuts for businesses are set to expire.  Second, the Social Security payroll tax will also run out in 2014.  Finally, the overall economy is expected to continue to improve, thereby also providing an uptick in revenue.

So there’s no question that, since President Obama took office, we’ve seen an effort to cut the deficit.  But when Republicans gained control of the House of Representatives, they won the argument on how best to do so by insisting on the automatic budget cuts known as sequestration.  Those cuts are projected to reduce federal spending by $1.2 trillion over the next decade.  Sequestration has a downside, though.  The Congressional Budget Office has estimated that its cuts might result in the loss of as many as 750,000 jobs.

But even that statistic has a silver lining.  Congressional Democrats have put together a piece of legislation called the Stop the Sequester Job Loss Through 2014 Act, a law that may get rid of the more economically damaging elements of the horrible sequester policy.

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