White House Press Secretary Jay Carney said today that no matter what else happens President Barack Obama–who is the only modern president other than Franklin Roosevelt to serve in four years when federal spending topped 24 percent of GDP–will not sign a deal to avoid the so-called fiscal cliff that will arrive at the end of this year unless that deal increases taxes.
“So the President made clear that he is not wedded to every detail of his plan,” said Carney. “The President has also made categorically and abundantly clear that he will not sign an extension of the Bush-era tax cuts for top earners. It’s bad economic policy and we cannot afford it. He will not sign that.”
According to official calculations made by the White House Office of Management and Budget that go back to 1930, Barack Obama and Franklin Roosevelt are the only two presidents who have served in four fiscal years when federal spending exceeded 24 percent of GDP. Roosevelt did so in 1942, 1943, 1944, and 1945 (when he died in office). Obama did so in 2009, 2010, 2011 and 2012.
Since 1930, according to the White House, there has been only one year when federal tax revenues went as high as 20 percent of GDP. That was 2000, when revenues were 20.6 percent of GDP.
No matter what the federal income tax rates have been, at no time since 1930 has the federal government been able to collect as much as 21 percent of GDP in taxes.
To balance the budget at a level of spending higher than 20.6 percent of GDP would require an historically unprecedented level of taxation.
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