On January 7, 200--two weeks before Barack Obama took the oath of office--the Congressional Budget Office forecast the federal budget deficit for fiscal year 2009 at $1.2 trillion. Now, the CBO is projecting the deficit will be only $642 billion for FY 2013, $200 billion less than the nonpartisan budget scorekeeper estimated as recently as February.

For policymakers in Washington, the implications couldn't be clearer. For starters, the counterproductive Beltway fixation on immediate debt reduction, which economists have warned is slowing U.S. economic growth and costing millions of jobs, should be jettisoned ASAP. And to be sure, the Republicans' next round of debt ceiling hostage-taking should be condemned as the economic sabotage it is.

The CBO explained why the U.S. fiscal picture is improving so dramatically:

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year--at 4.0 percent of gross domestic product (GDP)--will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP...

CBO's estimate of the deficit for this year is about $200 billion below the estimate that it produced in February 2013, mostly as a result of higher-than-expected revenues and an increase in payments to the Treasury by Fannie Mae and Freddie Mac. For the 2014-2023 period, CBO now projects a cumulative deficit that is $618 billion less than it projected in February. That reduction results mostly from lower projections of spending for Social Security, Medicare, Medicaid, and interest on the public debt.

By 2015, the annual deficit is now projected to just 2.1 percent of U.S. gross domestic product, well below the 40-year historical average of 3.1 percent. The gap is expected to grow to 3.5 percent by 2023, "because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt."

The new CBO numbers are just the latest confirmation of House Speaker John Boehner's admission that "we have no immediate debt crisis." Coming on the heels of an analysis by the Hamilton Project estimating that austerity at the federal, state and local level has cost up to 2.2 million American jobs, the CBO report should help put to lie that more budget cutting is needed in Washington. As the New York Times explained just last week:

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Despite slashing the national debt by an additional $1.8 trillion over the next decade, President Obama's proposed fiscal year 2014 budget was received with two predictable talking points by Republican leaders. House Majority Eric Cantor, who previously complained about being called a "hostage taker," protested that "we ought to do so without holding [entitlement cuts] hostage for more tax hikes." His fellow debt-ceiling hostage-taker John Boehner echoed that sound bite, proclaiming "I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes." But Boehner didn't end there:

"The president got his tax hikes in January; we don't need to be raising taxes on the American people."

Speaker Boehner couldn't be more wrong. As it turns out, Uncle Sam has a well-documented need for more tax revenue in the years ahead. And a big reason why is that between them, Presidents Bush and Obama cut taxes by more than the five times the amount of the combined new revenue hikes Obama got in January and is asking for now.

The chart above tells the tale. Leaving aside the new funding contained in the Affordable Care Act, President Obama is seeking $1.2 trillion in new tax revenue over the next decade. With the fiscal cliff deal in January, Obama got about $620 billion, or about half that amount. Individuals making over $400,000 a year (and households earning over $450,000) will see their income tax rate return to its Clinton-era level of 39.6 percent. The capital gains rate similarly will be reset at 20 (from 15) percent. In his FY 2014 budget proposal, the President has asked for another $580 billion by 2023, primarily by capping deductions for the wealthy at 28 percent, instituting the so-called "Buffett Rule," and ending tax breaks for the booming energy sector.

But Obama's $1.2 trillion in current and requested tax increases pales in comparison to the roughly $6.4 trillion he and George W. Bush will have drained from the U.S. Treasury between 2001 and 2023.

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The Obama administration on Friday lifted the covers on its compromise budget proposal for fiscal year 2014. While Obama's blueprint would slash the national debt by a projected $1.8 trillion over the next decade (bringing the total reductions since 2011 to $4.3 trillion) through painful changes to Social Security and Medicare, Republicans are predictably balking at Obama's call for $580 billion in new tax revenue. Despite the administration's up-front concessions on spending, GOP leaders including John Boehner, Mitch McConnell and Eric Cantor continue to repeat their talking points that "the President got his tax hikes in January" and "the discussion about revenue is over."

But as a quick glance at U.S. budgets past and future shows, the discussion over tax revenue should be far from over. For starters, thanks to two wars, the new unfunded Medicare prescription drug program and the government responses to the 2008 financial meltdown, federal spending surged over the previous decade even as tax revenue as a percentage of the U.S. economy hit 60 year lows. And looking ahead, the U.S. Treasury will need to raise revenues higher than the historical average not just to fill the massive hole left by the Naughts, but to fund $2 trillion more in war-related spending, to address the aging of the U.S. population and to meet the public's demands for more, not less, spending across almost every area of government.

Here are 10 reasons why Uncle Sam needs more tax revenue. (Click a link to jump to the details for each.)

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Back in 2010, Ohio Rep. John Boehner defied recent history and basic math when he comically denied that the Bush tax cuts enacted in 2001 and 2003 played any role in producing federal budget deficits ever since. Now in his refusal to countenance any new tax revenue to avoid the job-killing sequester, Speaker Boehner is peddling a new deception. Pretending to ignore inflation, population growth and the expansion of the American economy, Boehner is now claiming federal tax revenue is at a record high.

Speaking to Scott Pelley of CBS News earlier this week, Boehner said no tax increases could be part of any bipartisan plan to avoid the first $85 billion in cuts to discretionary spending beginning March 1. Why?

"The president got his tax hikes in January. The federal government will have more revenue this year than any year in our history. It's time to tackle spending. Period."

As he declared further talks on Thursday, Boehner once again declared, "The revenue issue is now closed." He added:

"How much more money do we want to steal from the American people to fund more government?"

Now, the $2.7 trillion in fiscal year 2013 revenue recently forecast by the Congressional Budget Office is, by a small margin, Uncle Sam's largest haul when measured in current dollars. But as a percentage of the total American economy (see chart above), federal tax revenues remain well below historical averages.

The handy CBO chart paints a pretty clear picture of Boehner's whitewashing. At less than 17 percent of U.S. GDP, federal revenue for FY 2013 is near historically lows. But that is an improvement over 2010, when the disastrous recession combined with the continuing drain from the Bush tax cuts slashed federal receipts to the 15 percent level not seen since the early 1950's. Meanwhile, the costs of two wars, emergency recovery measures including TARP and the stimulus, and counter-cyclical demand for food stamps, unemployment benefits and health care pushed Washington's spending to levels not seen since Ronald Reagan's first term. (It's worth noting that federal spending is almost flat since Barack Obama first took the oath of office, while the annual deficit has declined.) Contrary to Republican mythology that "tax cuts pay for themselves," it took five years for the Treasury to recover from the Bush tax cuts of 2001.

That last point is made clearer when taking inflation into account.

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While most eyes were trained on the State of the Union address (or a burning cabin in California), PBS last Tuesday aired a documentary on the ongoing fiscal deadlock in Washington titled, "Cliffhanger." In it, the House Speaker John Boehner is portrayed as hopelessly trapped between an equivocating and untrustworthy President Obama who "poisoned the well" and an immovable Tea Party caucus manipulated by the hyper-ambitious Eric Cantor. But the usually excellent Frontline series didn't merely get lost in the weeds of DC politics. When it comes to the unprecedented Republican debt ceiling hostage-taking that precipitated Washington's "cliffhanger," PBS missed the forest for the trees altogether.

What is the Fiscal Cliff? One of the most striking omissions from a film titled "Cliffhanger" is any definition of the so-called "fiscal cliff." That triple witching hour on January 1, 2013 when the Bush tax cuts and the two-year payroll tax reduction set to expire just as the $1.2 trillion, ten-year sequester was to begin is never fully explained. (The sequester drop-dead date was shifted to March 1.) And the risk in that manufactured crisis was not that the United States would suddenly increase its national debt, but instead reduce too quickly and thus trigger a steep (and unnecessary) recession.

Glossing Over the Original Sin. In "Cliffhanger", Frontline's sins are myriad. But none is more crucial than skirting past the original sin itself. That is, the Republican threat beginning in 2011 to trigger a default on the full faith and credit of the United States isn't just without parallel in modern American history. It is the GOP's extortion over the debt ceiling (which Senate Minority Leader Mitch McConnell called "a hostage that's worth ransoming" and a "new template") which is responsible for the sequester and "fiscal cliff" showdowns which followed.

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In just their latest failed effort to peel away supporters from one of the Democratic Party's most reliable constituencies, Republicans in 2012 still lost among Jewish voters by over a 2-1 margin. The reasons for the GOP's consistently dismal performance are no mystery. Survey data show that Jewish Americans overwhelmingly reject the Republicans' reactionary social policies and mockery of education and science. Worse still, many of the right's hardline supporters of Israel see God's chosen people as biblical cannon fodder needed to fulfill End Times prophecy. And then, as Rep. Virginia Foxx (R-NC) showed this week, Republicans routinely compare Democratic positions on guns, education, health, taxes, the debt--and almost everything else--to the Holocaust.

During a speech Tuesday to the National Association of Independent Colleges and Universities, the North Carolina Republican appropriated the famous Holocaust maxim to protest federal regulation of for-profit colleges. As Inside Higher Ed reported, Foxx complained that private institutions should have joined in their defense:

"'They came for the for-profits, and I didn't speak up'...Nobody really spoke up like they should have."

For her part, Foxx was only following in the footsteps of her GOP colleague, Rep. Roscoe Bartlett of Maryland (video above). Federal student loans, he cautioned last fall, weren't merely unconstitutional, but the first step to the gas chambers:

"If you can ignore the Constitution to do something good today, tomorrow you will be ignoring the Constitution to do something bad...The Holocaust that occurred in Germany -- how in the heck could that happen? And when you start down the wrong road, it can be a very slippery slope."

Virginia Foxx's previous claim to fame was her high-profile role in propagating the "death panels" slander of the Affordable Care Act that became Politifact's 2009 Lie of the Year. Democratic health care reform, she warned, will "put seniors in a position of being put to death by their government."

And that, some Republicans suggest, makes Obamacare little different from the Holocaust. State exchanges helping to enable 30 million people in the United States to obtain insurance, Idaho state senator Sheryl Nuxoll darkly warned last week, are the equivalent of a final solution for health care:

"The insurance companies are creating their own tombs. Much like the Jews boarding the trains to concentration camps, private insurers are used by the feds to put the system in place because the federal government has no way to set up the exchange."

As it turns out, she's far from alone in crying Holocaust over health care reform. In Maryland, the Republican Women of Anne Arundel County explained four years ago that "Obama and Hitler have a great deal in common." Last summer, Maine Republican Governor Paul LePage reacted to the Supreme Court's ruling upholding Obamacare:

"We the people have been told there is no choice. You must buy health insurance or pay the new Gestapo -- the IRS."

LePage was not the first Republican to compare the Internal Revenue Service to the Hitler's henchman. During the GOP's successful crusade to gut the agency in the late 1990's, Mississippi Senator Trent Lott decried the IRS' "Gestapo-like tactics" while Alaska's Frank Murkowski protested, "You don't need to send in armed personnel in flak jackets."

Michele Bachmann and Mike Huckabee couldn't agree more.

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Among the things largely absent from the 2012 Republican National Convention has been any mention of Bain Capital and any fidelity to the truth. After the first two days, the GOP's twin frauds about welfare and "we built that" were once again demolished, prompting Team Romney to protest that "we're not going to let our campaign be dictated by fact checkers." Adding to the embarrassment was a prime-time presentation on how to build your small business by selling to the government.

As it turns out, the silence about Mitt Romney's old company (which only ended on the ceonvention's last night) and the Republican sham that "you didn't build it" are related. Because when it comes to Bain Capital, in a very real sense you did build it. After all, your United States tax code doesn't merely allow the "carried interest exemption" that enables the likes of Mitt Romney to pay a lower rate than many middle class families. Without the public subsidy that is the corporate debt interest deduction, there might not be a Bain Capital--or a private equity industry as we know it--at all.

As the history shows, on his road to becoming a $250 million captain of private equity at Bain Capital, Mitt Romney had a lot of help from his uncle. Uncle Sam, that is. Writing in Rolling Stone, Matt Taibbi explained how:

Essentially, Romney got rich in a business that couldn't exist without a perverse tax break, and he got to keep double his earnings because of another loophole - a pair of bureaucratic accidents that have not only teamed up to threaten us with a Mitt Romney presidency but that make future Romneys far more likely. "Those two tax rules distort the economics of private equity investments, making them much more lucrative than they should be," says Rebecca Wilkins, senior counsel at the Center for Tax Justice. "So we get more of that activity than the market would support on its own."

Then-Bain Capital CEO Mitt Romney concluded as much when he acknowledged, "There's a lot greater risk in a startup than there is in acquiring an existing company." So he fatefully redirected his firm from venture investments in new companies like Staples and instead became a leveraged buyout king. To understand both why he did that and how all American taxpayers helped make it possible, a little background is in order.

Private equity owes its success in no small part to that uniquely American provision of the corporate tax code. The New York Times recently helped explain why:

Companies can finance investment from either debt or equity. Companies can finance investment from either debt or equity. But profit on an investment financed with equity -- stock issued by the company -- is taxed. In contrast, if the project is financed with debt, then only the profit after interest payments are made is taxed. This means debt-financed investments are cheaper than equity.

And not just a little cheaper. As the Treasury Department recently explained, "The effective corporate marginal tax rate on new equity-financed investment in equipment is 37 percent in the United States. At the same time, the effective marginal tax rate on the same investment made with debt financing is minus 60 percent--a gap of 97 percentage points." The result:

This creates a bias by corporations toward debt.

Or, for the likes of Mitt Romney, a business model.

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At a $1.7 million fundraiser in Jackson, Mississippi this week, Republican presidential nominee Mitt Romney declared that the GOP is not "the party of the rich," insisting instead that "we're the party of people who want to get rich."

Sadly for Romney, there are two small problems with his assessment. For starters, Mitt's proposals (like those from GOP wunderkind Paul Ryan) would deliver another massive tax cut windfall for the wealthy and shred the social safety net while putting the economic recovery at risk. Just as damning for Mitt and his cheerleaders like David Brooks and Robert Samuelson, the historical record shows that from economic growth and job creation to household incomes, stock market performance and just about every other indicator of the health of the U.S. capitalism, the modern U.S. economy has almost always done better under Democratic presidents.

Nevertheless, Governor Romney offered his GOP extreme makeover during his audience with the haves and have-mores in Mississippi. As ABC reported:

"We're accused, by the way -- in our party -- of being the party of the rich," Romney said. "And it's an awful moniker, because that's just not true. We're the party of people who want to get rich. And we're also the party of people who want to care to help people from getting poor. We want to help the poor."

Americans have good reason to look the dressage horse in the mouth, and not just because earlier this year Romney announced, "I'm not concerned about the very poor." As it turns out, Mitt Romney's program makes George W. Bush look like Karl Marx.

At a time of record income inequality, the lowest federal tax burden in 60 years and plummeting effective tax rates for the top one percent of earners, Romney is promising a staggering payday for the gilded-class. Mitt Romney doesn't merely want to make the Bush tax cuts permanent: he wants to end the AMT and another 20 percent across the board tax cut that could reduce his own future tax bills by half. All told, the Center for American Progress forecast Romney would hand over 60 percent of the benefits from his tax cuts to the top one percent of earners. (And that figure was before he announced his new 20 percent across-the-board tax cut scheme reflected in the chart above.)

That Romney wants to maintain the notorious "carried interest exemption" that allows him to pay 15--and not 35 percent--on his millions in continuing income from Bain Capital may explain why the giants of private equity like Henry Kravis, Julian Robertson, John Paulson, Marc Rowan and Sam Zell are pouring money into his Super PAC. Making matters worse, Romney's plans to slash the corporate income tax and shift to a "territorial" system to treat the foreign revenue of American firms could cost the Treasury $1 trillion and the United States an estimated 800,000 jobs.

But one Romney proposal above all others - the elimination of the estate tax - offers a staggering ROI for the richest families in America.

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While trying to set the record for most banal hash tags in a single tweet, Marco Rubio peddles one of GOP's favorite lies: that no tax increases will be required to pay off the debt that's been run up primarily by historically-low tax rates and the Bush tax cuts.

Oh, and as a reminder.

Bill Clinton raised taxes on the wealthiest Americans and produced 20M jobs -- while turning a deficit into a surplus. So no, Marco, #taxincreases clearly don't #hurt #growth.

#Moran.

Among the myriad Republican myths about taxes, the most pernicious and demonstrably false - that "tax cuts pay for themselves" - is the mostly deeply held by the GOP faithful. As President George W. Bush famously (and erroneously) put it, "You cut taxes and the tax revenues increase." Now, a survey of leading economists conducted by the University of Chicago Booth School of Business is just the latest shovelful of evidence to bury Arthur Laffer's zombie lie.

Earlier this year, as Congressional Republicans learned the hard way three weeks ago from CBO Director Douglas Elmendorf, another Chicago Booth poll revealed that "80 percent of economic experts agreed that, because of the stimulus, the U.S. unemployment rate was lower at the end of 2010 than it would have been otherwise." (As Elmendorf told the House Budget Committee, ""Only 4 percent disagreed or strongly disagreed. That is a distinct minority.")

Now, the U of C is back with a new two-part survey on the Laffer Curve. In the first question, 35 percent agreed and another 35 percent were unsure that "a cut in federal income tax rates in the US right now would lead to higher GDP within five years than without the tax cut." (That response is unsurprising, given that one definition states that GDP equals consumption plus investment plus government plus net exports minus taxes.) But far more interesting are the results on the question that gets to the heart of Arthur Laffer's supply-side snake oil which has been Republican orthodoxy ever since Jude Wanniski sketched Laffer's curve on a cocktail napkin. In a nutshell, not a single one of the economists surveyed agreed that "a cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut."

In his comments, David Autor of MIT pointed out, "Not aware of any evidence in recent history where tax cuts actually raise revenue. Sorry, Laffer." Former Obama administration economist and current University of Chicago professor Austan Goolsbee put it this way:

Moon landing was real. Evolution exists. Tax cuts lose revenue. The research has shown this a thousand times. Enough already.

Of course, you don't have to take Goolsbee's word for it. Your own eyes will suffice.

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