The Congressional Budget Office has released its annual Budget and Economic Outlook, filled with statistics that underscore the need for both Democrats and Republicans to offer more realistic proposals to put the country on a responsible fiscal path.
The official projections are bad enough; they show, to take just one eye-popping statistic, that Medicare spending would be $480 billion higher in 2021 than in 2012. But the official projections are based on current law, including measures for future savings that have often been postponed in the past.
The Concord Coalition’s plausible baseline offers an even gloomier picture, based on a number of realistic assumptions about future policy decisions. This baseline shows cumulative deficits totaling $13.6 trillion over 10 years, with the annual deficit never falling below $1 trillion. Federal debt held by the public would rise from 74 percent of the economy to 104 percent.
Elected officials have issued proposals that over-focus on domestic discretionary spending while downplaying or simply dismissing the need for entitlement reform, a revamped tax system and substantial defense cuts.
The CBO report — like the recent reports from the President’s bipartisan fiscal commission and the Bipartisan Policy Center’s Debt Reduction Task — shows that elected officials must put far more than cuts in domestic discretionary spending on the table.
Concord’s Plausible Baseline
CBO Director’s Blog
CBO’s Budget and Economic Outlook: Fiscal Years 2011 Through 2021
Concord Calls for Major Tax Reform
Director Elmendorf’s Testimony Before Senate Budget Committee