On Tuesday, the Congressional Budget Office released its federal budget outlook through fiscal year 2022. And as one would expect, the news is not good.
Congress has spent recklessly for more than a decade. We have seen three years of high unemployment. Our national debt has increased tremendously on President Obama’s watch. In fact, 2012 will be the third straight year with a deficit of more than $1 trillion. Worse, spending on entitlement programs will increase out of control unless Congress acts now to reform them.
As lawmakers prepare the 2013 budget, they should keep in mind a few oddities in the CBO’s projections. For example, they seem to ignore the economic consequences of liberals’ favored policies, as The Heritage Foundation’s J.D. Foster explains:
By and large, the economic forecast that the CBO uses for its baseline outlook appears reasonable. Projected growth for 2012 of about 2 percent is certainly in the ballpark of other estimates. As the baseline assumes a massive tax hike in 2013, a resulting decline in growth in 2013 is appropriate whether one is a Keynesian or a supply-sider, though the CBO forecast of 1.1 percent growth under those circumstances seems very optimistic.
Another peculiarity is that there appears to be no reflection in the forecast for interest rates of the massive increase in national debt effected thus far under President Obama or projected in either baseline. If deficits matter, they matter first and foremost through higher interest rates, but these consequences seem to be wholly missing.
Read Foster’s full report here.
Meanwhile, Heritage’s Patrick Knudsen reports that
the President and Members of Congress are still considering a large, thoroughly bogus “savings” option to help cover their profligate spending: They intend to claim war spending that was never going to be spent as “savings”—and then spend it on something else. It is one of the most embarrassingly transparent gimmicks in town, and it should be shunned permanently.
When President Obama took the podium last week to address the nation, he offered few concrete ways to fix the dismal state of the nation’s finances. The solution is obvious: it starts with getting spending under control. Heritage’s Saving the American Dream plan offers ways to do just that.
With yet another CBO report outlining the fiscal nightmare this country is facing, are you hopeful Congress and the President can turn this country around?