Tags: Collender | deficit | Congress | spending

Is Anyone Left at the Brakes for the Fiscal Train Wreck Ahead in Washington?

By    |   Tuesday, 14 April 2015 06:40 AM

Congress is about to increase the nation's groaning deficit by 20 percent, an unmistakable signal that cutting government debt has fallen off the agenda in the nation's capital, according to Forbes contributor Stan Collender, an expert on government spending.

Collender, a writer and former staffer on both the House and Senate budget committees, said current proposals on Capitol Hill are even worse than if lawmakers took no action at all on balancing the budget.

"Virtually every policy change that has already or soon will be considered seriously in the House and Senate will make the deficit higher rather than lower. In addition, the procedural choices Congress is making all favor increasing the deficit rather than at least requiring it not get any worse," he wrote in an article for Forbes.

In his view, three key priorities — higher military spending, more domestic spending, and reenacting and making permanent a bevy of special tax breaks — could easily add $100 billion of additional red ink.

"The Obama administration made it clear in the budget it released in February the president would not agree to more military spending unless Congress also agrees to more for domestic priorities," Collender wrote.

In addition, he said a permanent change in the Medicare "sustainable growth rate" — the so-called "doc fix" — without a complete revenue increase or offsetting spending cut "is now a very real possibility" to tack on another $14 billion to the annual deficit.

The anti-deficit groups that received such attention previously clearly have less political clout or media impact than at any time in the past 10 years, he asserted.

"There are no prospects for a deficit reduction deal of any kind this year," Collender asserted.

"There is overwhelming support in Congress and at the White House for mitigating the impact of sequestration or eliminating it entirely. This means that that the procedure put in place in 2012 to keep appropriations from exceeding the annual spending caps and, therefore, from increasing the deficit is no longer in political vogue."

Ron Haskins, a senior fellow at the Brookings Institution, said the nation's deficit is considerably worse than Americans think it is.

"Under the [budget] estimates used by Congress, we have a huge debt hole. Under the more comprehensive fiscal gap measurement, we have a chasm," Haskins wrote in an opinion piece for Brookings.

"We're headed toward a fiscal black hole."

Haskins cited one academic estimate that Congressional Budget Office (CBO) estimates of less than $13 trillion national is off by a huge order of magnitude because it does not take into account the government's full financial obligations for future payments for Social Security, Medicare, and interest on the debt.

If those extra obligations were taken into account, the real fiscal gap could be $210 trillion — more than 16 times larger than the CBO estimates, he said.

"Of all the failures of recent Congresses and presidents, none is more important than their failure to deal with the nation's long-term debt," Haskins wrote.

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Congress is about to increase the nation's groaning deficit by 20 percent, an unmistakable signal that cutting government debt has fallen off the agenda in the nation's capital, according to Forbes contributor Stan Collender, an expert on government spending.
Collender, deficit, Congress, spending
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2015-40-14
Tuesday, 14 April 2015 06:40 AM
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