WASHINGTON -- With today's new projections by the Congressional Budget Office (CBO) showing that the nation's fiscal outlook continues to plunge downward, The Concord Coalition called on Congress and the Bush Administration to make deficit reduction a top priority item on this year's agenda. As detailed in CBO's report, the projected 10-year deficit of $1.9 trillion could explode by another $5.4 trillion if all expiring tax cuts are made permanent and discretionary spending continues to go up by the same rate it has for the past five years.
“Failure to rein in the fiscally irresponsible combination of big spending increases and big tax cuts that characterized 2003 will result in a decade of ballooning debt at exactly the wrong time - just as the huge fiscal consequences of the baby boomers' retirement and health care benefits begin to hit. The responsible thing to do is to prepare for that known challenge by getting our fiscal house in order, not by making a bad situation even worse with an explosion of debt,” said Concord Coalition Executive Director Robert L. Bixby.
“Any wishful thinking on the part of politicians that economic growth alone will avoid the need to make hard choices should end with today's CBO report. Large deficits persist even though CBO now assumes a very strong economic recovery. While much attention has been understandably paid to the record deficit projected for 2004, the growing likelihood that sizable deficits will persist long after the economy has fully recovered is what politicians need to focus on. Whatever the merits or necessities of short-term deficits, there is little doubt that permanent deficits pose a threat to the economy - particularly with the need to find resources for the unfunded retirement benefits of the baby boomers.” Bixby said.
Concord highlighted the following facts from the CBO report:
|Deterioration in the budget outlook since August:||$986 billion|
|Deficit excluding the Social Security surplus FY2005-2014||$4.3 trillion|
|Cost of making all tax cuts permanent||$2.2 trillion|
|Savings from 10-year freeze on appropriations at 2004 level||$1.3 trillion|
The Concord Coalition is a nonpartisan, grass roots organization dedicated to balanced federal budgets and generationally responsible fiscal policy. Former U.S. Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord's co-chairs and former Secretary of Commerce Peter Peterson serves as president.