Tags: federal | deficit

CBO Report: U.S. Deficit to Balloon

By Marc Davis   |   Tuesday, 30 Jun 2009 09:50 AM

Crushing government deficits loom, unless the Obama administration reins in its propensity to spend.

That was the cautionary statement from the Congressional Budget Office in its latest long-term budget forecast, reported recently in The Wall Street Journal Real Time Economics blog.

Government deficits will increase substantially, according to the CBO report, hitting more than 5.5 percent of Gross Domestic Product in 2035, 8 percent in 2050, and a whopping 19 percent in 2084.

As a consequence of these potentially crippling deficits, the government would have to borrow more money and wages would be depressed.

The obvious solution: The administration must put a lid on spending and boost taxes, according to the report.

Some Senate Democrats, many of whom are advocates of President Obama's comprehensive healthcare plan, have balked at rubber-stamping the proposed legislation.

"CBO's report shows that rising health costs remain the single biggest driver of the nation's long-term fiscal imbalance," Senate Budget Committee Chairman Kent Conrad (D-N.D.) said in a statement.

"And it reinforces the importance of not only paying for health reform, but ensuring that it significantly bends the cost curve on health care beyond the next ten years," Conrad said.

Other knowledgeable and responsible voices also have warned of the impending deficit disaster.

"For years, we've been warning that the budget was out of balance over the long-term and we should act while there was still time," said Maya McGuineas, president of the Committee for a Responsible Federal Budget.

"Well guess what? Time is quickly running out," McGuineas said.

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Crushing government deficits loom, unless the Obama administration reins in its propensity to spend.That was the cautionary statement from the Congressional Budget Office in its latest long-term budget forecast, reported recently in The Wall Street Journal Real Time...
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