As with most things in Washington, D.C. and the Congress, sometimes there isn't an easy political answer to something as simple as the cost of a piece of legislation. That's very true with the fiscal cliff deal approved this week.
The Congressional Budget Office review said the deal to extend most of the Bush tax rates would raise the deficit by $4 trillion over ten years, a fact that was repeated by a number of Republicans who voted against the agreement.
The irony of that is Republicans usually criticize the CBO for making such projections on tax cuts, arguing that it is wrong to assume that just because you cut taxes, then less money will come into the Treasury, as the GOP argues tax cuts will stimulate growth and bring in more revenue.
The $4 trillion in higher deficits is somewhat misleading in one sense, because that involves a scenario where the Bush tax rates and cuts all expired on January 1, 2013 - but if you just use the old tax setup on December 31 and compare that to the changes made by the fiscal cliff deal, the numbers are much different.
The White House argues the final deal actually reduces the deficit by $737 billion; they get there by saying the deal brings in $618 billion in new revenues, $104 billion in interest savings on the national debt and then add in some other savings.
Those numbers actually track with a number of other estimates as well for this deal.
You can see the White House breakdown to look at the numbers as presented by the Obama Administration.
So, does it raise deficits by $4 trillion, or lower the deficit by $737 billion?
I'll leave that answer to you.
