CBO: Debt Explosion Coming

Ending Bush tax cuts could eliminate deficit, CBO says
By Mark Russell,  Newser Staff
Posted Jun 23, 2011 4:32 AM CDT
Updated Jun 23, 2011 6:45 AM CDT
Senate Budget Committee Chairman Kent Conrad speaks before hearing testimony from the Congressional Budget Office.   (AP Photo/Charles Dharapak)

(Newser) – Ballooning entitlements threaten to push the national debt bigger than the entire US economy by 2021, and twice that size within 25 years, according to a pessimistic Congressional Budget Office report. “The health care programs are the main drivers of that growth,” wrote the CBO. But with Democrats refusing to cut programs and Republicans refusing to raise taxes, the debt has nowhere to go but up, notes the Washington Post.

However, the CBO also says the deficit could be fixed almost completely simply by allowing the Bush tax cuts to expire as scheduled in 2012 and broadening the alternative minimum tax. The problem, warns the CBO, is that cutting spending or raising taxes now "would probably slow the economic expansion." But the biggest danger is doing nothing, as rising debt could lower economic growth by 6% by 2025, and 18% by 2035.

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