Fiscal Year 2013 is drawing to a close with a projected federal deficit of a little over $640 billion, marking the end of a four-year string of trillion-dollar-plus deficits.
While that change is good news, our fiscal worries aren’t over. Although the deficit is going down, the federal debt is still going up. And short-term economic factors, not systemic reforms, are largely responsible for this year’s lower deficit.
The big long-term pressures on the federal budget — demographics and health care costs — remain. The government’s interest costs are expected to rise sharply in the coming decade as well.
And even in the short run, budgetary crises loom. As noted in a recent blog post by Steve Winn, communications director for The Concord Coalition, Congress has yet to pass a single appropriations bill for the fiscal year that starts Oct. 1, and some lawmakers are irresponsibly threatening to push the country into default later this year over partisan disagreements.
“Washington has yet to grasp the importance of long-term fiscal reform,” Winn writes. “Elected officials still seem to be waiting for a crisis, which is a good way to get one.”