So if this happened after all these tax cuts, this has got to mean that spending was cut.From the news blurb posted at #11:
"Receipts came in $1 billion more than expected, while outlays were $4 billion less than CBO projected."
Apparently, from this sentence, expenditures aren't simply determined by what's been appropriated by law, but by what's actually been spent by the various agencies. And that's often determined by the situations that the agencies are responding to. Also, revenues fluctuate as well. It's a little early to say that the GOP's turning over a new leaf here. After what they've done for the past four years, they'd have to work pretty hard to convince me of that.
"So if this happened after all these tax cuts, this has got to mean that spending was cut.
Am I missing anything?"
That's a common misconception perpetuated by the media. Here's a primer on supply-side economics that explains how tax cuts lead to increases in tax revenue for the government (please keep in mind I'm no Dr. Laffer, so my explanation may not be perfect):
1. When taxes are too high, people do not have as much of an incentive to work or invest, so the economy stagnates (thus reducing taxable income). In addition, people have a larger incentive to avoid taxes (whether legally or illegally), so the government tax revenue is reduced further.
2. When high taxes are lowered, people have a greater incentive to work and invest, and less of an incentive to avoid taxes. This leads to much higher taxable income (and thus much higher tax revenue, even with a lower tax rate), and also leads to less tax avoidance (which also results in more tax revenue).
So the Bush tax cuts of 2003 are the reason for the increase in tax revenues, which have resulted in a reduction in the budget deficit in spite of the fact that government spending has increased (albeit at a lower rate than the rate of increase in tax revenues).
For the record, when Reagan cut in half the rate of the highest income-tax bracket in 1981, it led to such an economic boom (and reduced tax avoidance to such degree) that federal tax revenue nearly doubled between 1981 and 1989.