Reply #6: New CBO Report Shows Bleak Fiscal Forecast

[54anickel]

http://www.commondreams.org/news2005/1222-05.htm

WASHINGTON - December 22 - A new report from the Congressional Budget Office paints a bleak picture of the nation’s fiscal health. The CBO’s biennial Long-Term Budget Outlook report, released on December 15, shows that under any realistic forecast of federal spending and tax collection trends, the nation faces budget deficits—and growing federal debt—as far as the eye can see.

The CBO report looks at six different scenarios for long-term trends in federal spending and revenues, which include two different tax scenarios and three different spending scenarios. The scenarios broadly reflect the possible outcomes from the as-yet-unmade choices facing Congress: whether to make the Bush tax cuts permanent, whether to continue higher defense spending on the war on terrorism, and whether to contain recent rapid growth in health care spending.

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“The CBO report makes it clear that the fiscal path charted by the Republican leadership is simply unsustainable in the long run,” said CTJ director Robert S. McIntyre. “The fact that the only option for long-term fiscal balance described in the CBO report would require both tax hikes and spending cuts far beyond anything proposed by the current leadership is a testament to the irresponsible path on which our budget has been led for the past five years.” The report firmly rejects the notion that our ongoing budget deficits can be reduced through economic growth due to current and future tax cuts. In a December 15 speech announcing the report’s release, CBO Director Douglas Holtz-Eakin asserted that it’s “not possible” that tax-cut-induced economic stimulus could “grow your way out of this problem.”

“The CBO’s new forecasts are hardly surprising, since they show a continuation of the same irresponsible deficit-financing trend we’ve seen throughout this decade,” said McIntyre. “It would be a welcome surprise, however, if our leaders were to take heed of the CBO’s dire forecast and enact a responsible deficit-reduction package that puts our nation on a firmer fiscal footing.”

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