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While Rome Burns…

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While Rome Burns…

CBO report points to population aging as fuel for structural deficits.

I admit, I’ve always had a beef against the Concord Coalition. Originally formed by a couple of moderate politicians – one R and one D – as a supposedly non-partisan, budget-only think tank, the Coalition made a big deal about how their sole goal was ensuring fiscal sanity at the federal level, while remaining agnostic on the policy battles between the parties. “Above-the-fray” and all that.

"Annual deficits over the next 10 years will be $2.3 trillion greater than in CBO's official baseline."

So, after the GOP takeover of Congress in 1994, when the debate over enacting a balanced budget was raging, Republicans called their bluff by proposing, against the wishes of the President, a balanced budget – again, and again, and again.  And you know what those “non-partisan” and oh-so-high-minded paragons of virtue at the Coalition did?  They rejected it because its spending cuts were too great.  Feet, meet clay.

However, having said that, they still provide useful analysis every now and then.  Read below to get a sense of what the future looks like – while our President and the Congress happily argue over minutiae.

While there has been some recent good news for the federal budget, The Concord Coalition said today that updated projections from the Congressional Budget Office (CBO) should remind policymakers that the aging of the population is dramatically but predictably reshaping government spending and fiscal reforms are the only way to prevent the negative economic consequences.

"Despite a slowing of health care inflation and lower annual deficits since their heights during the recession, the CBO's projections demonstrate that our basic structural problem remains -- growth in just a few programs due to the retirement of the baby boom generation, combined with increasing debt service, have and will continue to push our federal debt to levels not seen since World War II. This will lead to lower standards of living and slower economic growth if we don't act soon," said Robert L. Bixby, executive director of The Concord Coalition.

The CBO report offers 10-year baseline projections for the nation's spending programs and revenue collection along with newly updated economic projections. When viewed along with their recent updated long-term budget projections, the picture is clear: spending on Medicare, Medicaid and exchange subsidies, Social Security, and net interest will grow by 3.4 percent of GDP, while all other spending programs are projected to shrink by 2.0 percent of GDP.

The Concord Coalition also updated its "Plausible Baseline" which applies more realistic assumptions about future policy decisions to the CBO's data. Under these assumptions, annual deficits over the next 10 years will be $2.3 trillion greater than in CBO's official baseline.

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Angus DuBois
Angus DuBois
Angus DuBois is the nom de plume of an entrepreneur of 20 years who, in cowardly fashion, prefers to keep his/her business identity a secret. Comments can be forwarded to angus@nexxuspublishing.com.

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