CBO: Hundreds of Billions in Cuts Needed to Combat Returning Deficits

The Congressional Budget Office said health-care costs and an aging population are the main causes in the return of massive deficits, the Washington Times reported.

Without sizable tax increases, the government would need to cut $560 billion out of next year's budget — and growing years after — to attain a debt rate of 40 percent of the economy. Just to maintain the current, unsafe, level of 75 percent of the economy requires $330 billion in cuts in 2017, the Times reported.

"The longer lawmakers waited to act, the larger the necessary policy changes would become," the Times quoted the CBO.

The core culprits are Medicare and Social Security benefits promised to a population that is aging, the Times reported. Medicare, now accounting for 3.8 percent of GDP, will rise to 6.6 percent in 25 years and surpass Social Security (4.9 percent now to 6.3 percent of GDP) as the biggest entitlement program, the Times reported.

The outlook worsened by 15 points in just a year's time, the Times reported.

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