Statement: James R. Horney, Director of Federal Fiscal Policy, on the Deficit Reports by the Office of Management and Budget and the Congressional Budget Office — Center on Budget and Policy Priorities

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excerpts from statement:

Today’s budget reports provide no evidence that federal budget policies over the last year have failed or that a drastic new direction in short-term fiscal policy is needed. While they also provide little new information about the nation’s longer-run budget path, the reports highlight the need for the President and Congress to begin taking steps now to ensure that deficits will fall to reasonable levels through 2019 and that they do not grow very rapidly in later decades, as they will under current policies.

What the President and Congress should do is to begin taking steps to ensure that the deficit will come down to reasonable levels (3 percent of Gross Domestic Product or less) in the slightly longer run (through 2019) and that the deficits do not begin to grow very rapidly in the following decades, as virtually all long-term budget projections show will happen under current policies. One key step in this process is enactment of health care reform that is fully paid for over the next 10 years and that begins to make changes to allow us to slow the rapid growth of health care costs that will drive big increases in deficits in coming decades if current policies are left unchanged.

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