According to the Congressional Budget Office (CBO), the annual budget deficit will improve during the next president's four-year term and end in a surplus of $61 billion by 2013.But that baseline projection is based on financial assumptions that no one expects to pan out. Two of the biggest roadblocks threatening to upend budgetary nirvana: What to do about the looming expiration of tax cuts enacted in 2001 and 2003, and the growing cost of fixing - or nixing - the Alternative Minimum Tax (AMT).
Depending on how you address them, those two factors alone could add close to $4 trillion to the federal budget deficit by 2018, according to estimates by the Tax Policy Center.
Add in the costs of the wars in Iraq and Afghanistan and the growing costs of Medicare and Social Security, and you end up with something more like a budgetary nadir.
"A substantial reduction in the growth of spending, a significant increase in tax revenues relative to the size of the economy, or some combination of the two will be necessary to maintain the nation's long-term fiscal stability," the CBO warned in a recent report.
Due to many factors, most notably the looming expiration of tax cuts enacted in 2001 and 2003, and the growing cost of fixing the Alternative Minimum Tax, the federal budget will be at a deficit of around 4 trillion dollars by 2018. The next president must act on this problem by reducing spending, increasing tax revenues, or a combination of the two. Experts don't believe that any of the presidential candidate's plans will help with this issue although each candidate has said that his/her proposals are fiscally responsible and, at the very least, will not add to the deficit.
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