October 2nd, 2013
The Congressional Budget Office (CBO) issued its annual update to its long-term budget projections last month. As usual, the report is chock full of useful insights about the state of the nation’s medium and long-term fiscal position, the implications of the budget outlook for the national economy, and the primary policies and programs that influence the long-term forecast.
CBO’s bottom line? The nation is facing very significant budgetary challenges over the next quarter century, and beyond, and health care cost escalation is a primary cause of the problems.
That’s not a universally held view, though. Some commentators on the budget have suggested in recent months that the push for an additional round of deficit reduction, which the president has said repeatedly he favors, is misguided. These commentators have pointed to both the near-term improvement in the budget outlook — CBO now expects the 2013 deficit to fall to about $640 billion, down from $1,087 billion in 2012 — and the recent slowdown in health care cost inflation to suggest that existing policies are working and might be all we need to get our fiscal house in order.Read the rest of this entry »