CBO Warns of Fiscal Crisis in Long-Term Budget Outlook

The Congressional Budget Office's (CBO) latest 30- year budget projections forecast rising debt, deficits, and interest costs, which will undermine US investment and economic growth and hurt American incomes. Rising spending on old- age entitlement programs, primarily Medicare and Social Security, is mostly to blame. Legislators must act to achieve a sustainable budget policy and avert a future fiscal catastrophe. The CBO warns that "mounting debt would slow economic growth, push up interest payments to foreign holders of US debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices." Lawmakers should heed the CBO's warnings and adopt a credible fiscal plan that will stabilize the debt. Annual spending is projected to grow from more than $6 trillion to $23 trillion (before adjusting for inflation) over the next 30 years. Without fiscal reforms, the government will accumulate $113 trillion in additional debt and end 2054 with debt at 166 percent of gross domestic product (GDP). To avoid more painful and likely more chaotic austerity in the future, policymakers should correct course by restraining entitlement spending growth today.