Over the last few months our attention has been diverted from the economy. Not that there haven’t been other important things to worry about. We have been bombarded with a never-ending parade of presidential scandals, affronts on our First Amendment rights by Obamacare and the IRS, the NSA domestic spying program, tensions in the Middle East and Russia, and more. But a report by the Congressional Budget Office issued yesterday should remind us of what we’ve forgotten — it’s still the economy, stupid!
The United States is still spending too much, the economy is slowing down, entitlements are still strangling our budgets, tax rates are too high, and the national debit is threatening our future.
According to the CBO, budget deficits are projected to rise steadily and, by 2039, push federal debt held by the public up to a percentage of GDP seen only once before in U.S. history (just after World War II). The harm that such growing debt would cause to the economy is not factored into CBO’s detailed long-term projections but is considered in further analysis presented in this report.
These are the issues that the GOP needs to focus on. They threaten our future and the future of our children. Key points from CBO’s Long-Term Budget Outlook report:
- Federal Debt Is Soaring: The debt has doubled since the onset of the financial crisis, and CBO concludes the growth in the debt is “unsustainable.”
- Now Is the Time to Act: CBO says that prompt decisions to rein in future deficits, would expand employment and economic growth.
- The Economy Is Slowing Down: CBO has again lowered its projection of GDP growth, and the average number of hours worked by Americans is shrinking.
- Spending Is Still the Problem: Major entitlements and interest on a growing stock of debt will cause real spending to soar by 27 percent over the next two decades.
- Raising Taxes Will Cost Jobs: Taxes will exceed their historic average level this year, and they are on pace to rise even further. Yet these tax increases still never match the pace of spending, even while they discourage work, saving, and investment.
- Entitlement Reform Is Key: We run the risk of breaking our promise to seniors and future generations if we don’t reform our entitlement programs soon. CBO has increased their measure of Social Security’s unfunded liability by 25 percent.
- The Debt Threatens Our National Security: CBO warns that our growing national debt could compromise national security by constraining defense spending and limiting the country’s ability to prepare for future challenges.
In response to the report, House Budget Committee Chairman Paul Ryan (R-WI) issued the following statement:
If this report tells us anything, it’s that the status quo isn’t working, and families are paying the price. We need to expand opportunity for everyone in this country, and we can start by getting federal spending and debt under control. That’s how we can make the federal government more accountable and more effective.
Cross-posted at The Lid