Jeff Madrick: Deficit Commission's Extreme Proposals Spell Disaster The longer term deficit is also too often attributed to "big government." The projection of the Congressional Budget Office, adjusted for some realistic policy changes, such as the extension of the Bush tax cuts, is that the deficit will actually fall substantially to 4 percent of GDP and stay there for some time. Debt rises to 77 percent of GDP. This increase is hardly trivial and a 4 percent deficit may not be sustainable. But increases are not the result of rising outlays for Social Security, Medicare or Medicaid, contrary to what many, including members of the media, seem to think. The higher deficit and debt levels are overwhelmingly the result of three factors: recession, war spending, and the Bush tax cuts of the early 2000s.