Friday, December 26, 2003
Bush and the GOP Have A Deficit of Fiscal Prudence
Looming budget deficits threaten long-term economic recovery. Unless taxes are raised, the CBO's new "Long-Term Budget Outlook" says, "current spending policies will probably be financially unsustainable over the next 50 years." And even the current news is shaky: Durable goods orders by businesses unexpectedly fell 3.1% in November.
Already the combination of tax cuts and increased spending has plunged the U.S. back into massive deficits, with an additional $500 billion in red ink likely in 2004.
According to the GAO, unless Congress starts to attack the budget deficit, spending will have to be slashed by 35% in 2030 to maintain current services to retirees, or taxes raised by an inflation-adjusted 40%.
Congress can avoid an economic Dunkirk by looking to the recent past. In the 1990s Congress managed to go from budget deficits to surpluses by insisting on spending caps and "pay as you go" provisions for tax cuts and entitlement expansions.
By combining the increased revenue of the short-term economic recovery with at least enough discipline to stop cutting taxes, Congress can start taking the next generation off the hook for this one's profligacy. The tax-cut punch bowl is empty.