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House Speaker John Boehner, a Republican from Ohio, has offered $800 billion in new revenue and is calling for $1.2 trillion in spending cuts. House Republicans want to raise the revenue by closing loopholes rather than raising tax rates, as Obama is demanding. The government has run annual deficits for more than a decade and hit a record $1.41 trillion in 2009, Obama's first year in office. That was largely because of the worst recession since the Great Depression. Tax revenue plummeted during the downturn, while the government spent more on stimulus programs. The budget gaps in 2010 and 2011 were slightly lower than the 2009 deficit as a gradually strengthening economy generated more tax revenue. President George W. Bush also ran annual deficits through most of his two terms in office after he won approval for broad tax cuts and launched wars in Afghanistan and Iraq. The last time the government ran an annual surplus was in 2001.
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