This paper evaluates recent tax policies in light of the fiscal status of the federal government, and is the third paper in a series that summarizes and evaluates tax policy in the Bush Administration. We show that the government faces significant medium-term deficits and unsustainable long-term shortfalls, even if the tax cuts are allowed to expire as scheduled; making them permanent would significantly exacerbate these problems. In addition, permanent tax cuts have to be paid for, and the required spending cuts would far exceed any that have been proffered in the public discussion. Over the next 75 years, the total costs of the tax cuts, if they are made permanent, are roughly the same order of magnitude of the actuarial shortfall in the Social Security and Medicare Part A trust funds. On a permanent basis, the tax cuts would cost significantly more than fixing the entire Social Security shortfall.