The Congressional Budget Office (CBO) released its annual Budget and Economic Outlook, providing 11‐year fiscal projections for 2024 to 2034. The CBO’s new report arrives as Congress gears up for another budget fight with annual discretionary spending and a supplemental Ukraine‐border security deal hanging in the balance. While these issues capture headlines, the real drivers of the growth in federal spending that the CBO highlights are Social Security and Medicare, which neither Democrats nor Republicans are ready to address. As a result, the current fiscal situation is unsustainable. Excessive spending and rising interest costs will drive debt to record‐high levels within the decade, threatening America’s fiscal and economic security.
Last year, we witnessed the official end of the COVID-19 pandemic national emergency (one of the most expensive emergencies ever), the adoption of new discretionary spending limits that have yet to be enforced, and the downgrading of the US debt by a major credit rating agency for the second time in history (the first was in 2011 by S&P). In its press release, Fitch Ratings explained, “The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance.”
Not much has changed since Fitch’s acknowledgment of what fiscal experts, including yours truly, have been pointing out for some time now. The CBO’s latest report reinforces that the US fiscal health is worsening, and congressional budgetary mismanagement and an abdication of responsibility for automatic entitlement spending growth are at fault. Here are some key highlights:
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