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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Showing 3 of 56 comments
sclemens
Jun 23, 2011 2:34 PM CDT
Odowd80 - Guilty. I didn't read the Newser summary. After reading Newser's sub-headline "Ending Bush tax cuts could eliminate deficit, CBO says" I jumped to the Washington Post article. Even the quote you used is not found in the WP article. Instead it says: "The health care programs are the main drivers of that growth,” the CBO said, responsible for 80 percent of the projected rise in spending on those programs over the next 25 years. Tax collections could keep pace with those costs if Congress permitted the George W. Bush tax cuts to expire on schedule in 2012 and allowed the alternative minimum tax to hit millions of additional households, the CBO said." So eliminating the Bush tax cuts wouldn't cover the deficit or even 80% of the deficit. It would cover future increases in the deficit (or 80% of them depending how you read it) IF the health cost projections are accurate. Unfortunately, the CBO is using the projections provided by Pelosi's people. CBO is not allowed to comment on the validity of the assumptions used for the projection - they simply crunch the numbers using those assumptions - no matter how ridiculous the assumptions might be. Those numbers are likely as reliable as the early Medicare projections. In 1968 the House Ways and Means committee projected the 1990 medicare costs would be $12 Billion dollars - adding that this was a "conservative" projection. In 1990, Medicare cost taxpayers $107 Billlion. They missed by 890%. We are speeding toward a brick wall and arguing over whether we should hit it at 1000 mph or 990 mph.
Non-deep-thinker
Jun 23, 2011 1:12 PM CDT
The chances that any Democrats will notice this as a problem are zero. The response will be the usual one -- Complete denial that there is any problem at all, followed by looking for someone else to blame so they don't have to own it while they are in power.
Face-Of-RNC
Jun 23, 2011 12:29 PM CDT
This concern is the very reason America's rich should be paying at least the same percentage of their incomes as those working for hourly wages. Most rich, deriving income from investments, pay only 15% or less, some pay nothing at all. The average American pays close to 30% on his income. If this change was added to an end to the pork barrel spending of corporate welfare and war profiteering America would be running a surplus almost immediately.