CATEGORY

GRADE

COMMENTS

Overall: 

F

Current “fiscal
policy” is characterized by deficits, deception and denial.  Three strikes
and you’re out.  It earns a failing grade. 

Short-Term:
Enacting measures that maintain fiscal responsibility over the next 1-2
years

D

Fiscal year 2003 is
expected to end with a record deficit of more than $400 billion — roughly
$600 billion excluding Social Security.  More alarming than the growing
short-term deficit is policymakers’ growing willingness to justify
deficits of this size as “moderate and manageable.”  Complacency with a
deficit at 4 percent of GDP is an open invitation to even higher deficits.

Medium-Term:
Enacting measures that are fiscally responsible over the next 10 years

F

Coming on top of an
already problematic 10-year outlook, actions taken so far this year —
principally a major new tax cut and work on a Medicare prescription drug
benefit — make a period of prolonged deficits almost certain. This goes a
step beyond deficits caused by understandable temporary factors. It is a
deliberate decision to risk deficits throughout the coming decade.
And it comes despite the fact that the only plan for dealing with the
fiscal pressure of the boomers’ retirement in the following decade is to
run even bigger deficits.

Long-Term: 
Enacting measures that deal with the entitlement financing gap and ensure
fiscal sustainability

F

Medicare and Social
Security already promise far more in future benefits than they can afford
to deliver.  Washington’s apparent remedy for the long-term fiscal
challenge is to add trillions more for a Medicare prescription drug
benefit, rally around the “Do Nothing” plan for Social Security and pile
even more fiscal burdens on the backs of future taxpayers by running up
the national debt.