Final answer:
Budget deficits during George W. Bush Jr.'s presidency were caused by a combination of tax cuts, increased government spending, inherited economic challenges, and a severe recession. Despite efforts to manage the budget, such as small spending cuts and tax increases, the deficits continued to grow due to reduced tax revenues and external factors.
Step-by-step explanation:
Budget deficits under the leadership of George W. Bush Jr. occurred for multiple reasons. A combination of tax cuts, particularly those favoring the wealthy, and increased government spending in various areas such as defense, healthcare, and education led to reduced tax revenues and swelled federal spending. The economic slowdown from the recession that started in March 2001 exacerbated the issue by further reducing tax revenues. The situation became even more acute when the severe recession hit in late 2007, resulting in historically high spending juxtaposed with falling tax collections, leading to enormous deficits.
The challenges inherited from previous administrations, such as the debt from the Reagan era, also played a significant role. Despite attempts at fiscal responsibility, including small spending cuts and mild tax increases as part of a bipartisan agreement, the federal deficit continued to grow. Key external events such as Hurricane Katrina and the war in Iraq added to the federal burden, contributing to the budgetary challenges during President Bush's tenure.