The Congressional Budget Office today released its semi-annual update on the nation's budget situation. The report confirms massive deficits for the current year and beyond. In addition, the report shows that deficits will not be "cut in half" in the next five years, as projected by the Bush administration.

To the contrary, if the president's tax changes are made permanent, deficits will continue to increase over the next 10 years and reach nearly $600 billion in 2014. The chart below uses data from the CBO report to show the effect on the baseline deficit if the tax changes are extended and if a modest reform of the Alternative Minimum Tax is enacted.

This recent experience contrasts sharply with the surpluses that reached over 2 percent of GDP just a few short years ago. The alternative scenarios produced in the report also highlight the devastating impact the tax changes will have on the budget if they continue unchecked. Extending the planned tax changes over the next 10 years will cost more than $2.2 trillion.