"...the Joint Committee on Taxation (JCT)
...estimated the revenue effects of EGTRRA and JGTRRA
...imply a loss of revenues totaling $165 billion in 2007.
...the debt-service costs that would result in 2007 from the legislation
under an assumption that they were financed in full by additional debt
rather than offset elsewhere in the budget.
On that basis, CBO estimates that the revenue loss in JCT's projections
would lead to additional debt-service costs of $46 billion in 2007,
for a total budgetary cost of $211 billion.
On the same basis, the agency estimates the total budgetary costs, including interest,
for 2008 through 2011 to be $233 billion, $245 billion, $269 billion, and $215 billion, respectively.
The short-term effects of EGTRRA and JGTRRA
in stimulating aggregate demand in the economy
have largely dissipated by now,
and the supply-side effects of those policies are uncertain but are probably small.
...the two tax laws increased the budget deficit,
and doing so tends to reduce economic growth over the medium and long term.
...once those various factors have been taken into account,
the overall impact of the tax legislation on the economy is likely to be modest.
Peter R. Orszag
Director
Congressional Budget Office, July 20, 2007
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