By the numbers
Thanks largely to economic growth spurred by the Bush tax cuts, the federal deficit continues to shrink significantly.
The Congressional Budget Office announced last week that the deficit for the fiscal year that ends Sept. 30 will be about $158 billion, well below the $250 billion recorded the previous year.
Nevertheless, the head of the CBO said future efforts to control the deficit remain “daunting” because of a handful of factors.
He’s correct.
In addition to uncertainty over the current credit crunch and the wildly fluctuating stock market, the Democratic Congress has threatened to let the Bush tax cuts expire in 2010, which could undermine the economic progress the country has enjoyed in recent years.
Too, the Democratic presidential candidates all seek to impose their own, expensive version of socialized medicine on taxpayers. Make no mistake: Allowing the government to essentially nationalize one-eighth of the nation’s economy won’t result in deficit reduction.
Other looming problems include the inability of Congress to address the soaring costs of entitlement programs, which threaten to bankrupt the country. “We are on an unsustainable fiscal path,” said CBO Director Peter Orszag, citing future Medicare and Medicaid obligations.
And let’s not forget federal spending. Whether Republicans or Democrats control Congress and the White House, federal outlays continue to skyrocket. No prescription for long-term fiscal solvency will ever succeed without spending restraint.
“Congress has an opportunity to rise to the occasion and work with my administration to accomplish a balanced budget without raising taxes,” the president said in response to the new deficit numbers.
But why aren’t we optimistic that this Congress will embrace lower taxes, entitlement reform and fiscal discipline in its efforts to trim the federal deficit?