The Congressional Budget Office released its new Budget and Economic Outlook Tuesday, providing an array of statistics that show why elected officials must focus this year on structural reforms to put the federal budget on a more sustainable course.
“Congress and the Obama administration might be worn out by the fiscal cliff debate, but they need to get back to the negotiating table,” said Concord Coalition Executive Director Robert L. Bixby. “So far, their deals have resulted in short-term crisis management and discretionary spending caps while leaving the heavy lifting of entitlement and tax reform for another day.”
The CBO says that under current law, cumulative deficits over the next decade would total nearly $7 trillion. By 2023, debt held by the public would reach 77 percent of GDP. Under some alternative but realistic assumptions, however, the CBO projects an additional $2.5 trillion in deficits, with debt held by the public growing to nearly 90 percent of GDP by 2023.
“The trends reflected in the CBO’s report make clear that Congress and the President must put policies in place that look well beyond the government’s traditional 10-year budget window,” Bixby said. “Our main emphasis should be long-term stabilization of the growth rate of the debt rather than the specific level at which it stands by the end of any particular 10-year budget window.”
Because of the aging population, the CBO emphasizes, medical costs and big entitlement programs will put more and more pressure on the federal budget in coming decades. Further delays in planning for this will only make the job harder and require more public sacrifice. The necessary structural reforms can be phased in to avoid jeopardizing the economic recovery.