As the budget deficit gets worse, the White House keeps telling us to ignore reality. The non-partisan Congressional Budget Office says otherwise.
Americans are right to be concerned about the long-term impact of budget deficits projected to reach $2.3 trillion over the next decade, but there is little near-term danger of an economic catastrophe, the head of the Congressional Budget Office said on Tuesday.
“It’s proper for anyone, particularly the citizens of the United States, to be concerned about the long-run fiscal position,” Doug Holtz-Eakin, director of the nonpartisan CBO said in an interview.
A weakening dollar, rising interest rates, and a skyrocketing debt are, oddly enough, discouraging to the CBO. Indeed, it’s only going to get worse.
Soaring defense spending and spiraling health care and social security costs are on track to create enormous deficits in the long run that could lead to tax increases and hurt the economy, Holtz-Eakin said.
“Those numbers get so large you would have to have tax increases well beyond the range that the American public has ever consented to … and you can’t borrow like that.”
He reiterated the CBO’s contention that Bush is unlikely to achieve his promise of halving the deficit in five years unless policy changes are made.
“Current policies at the moment don’t cut it in half as a fraction of gross domestic product,” he said. “So you would have to do something. There’s no question about it.”
Except to the White House, where there’s plenty of question about it.
At one of his exceedingly rare press conferences, Bush said last week that his goal of cutting the deficit in half — to only $250 billion — is on track. When a reporter asked the president how he’d respond to those who insist the White House’s numbers don’t add up, Bush said:
“Well, I — I would suggest they look at our budget that we’ve submitted to Congress, which does, in fact, get the deficit down — cut in half in five years.”
Total nonsense. No serious person anywhere in America could look at Bush’s numbers and agree. The administration’s approach includes literally no money — not one penny — for Iraq and Afghanistan after 2004, nor does it include the costs of fixing the Alternative Minimum Tax (which currently is slated to expire at the end of 2005), making the previous tax cuts “permanent” (as Bush is committed to doing), or the $2 trillion it would take to privatize Social Security (Bush’s highest domestic priority).
Be afraid.