How The March Baseline Reiterates Our Distressing Fiscal Path

The Congressional Budget Office's (CBO) updated March baseline confirms the era of declining deficits is over. This year's deficit is expected to rise for the first time in seven years.

Despite deficit reduction enacted in recent years, deficits will approach 2009 levels by 2026, making it the largest nominal-dollar deficit ever outside of a recession.

The decline in deficits from 2009 to 2015 was largely expected as a result of the recovering economy and the fading of measures intended to boost the recovery. While legislated spending reductions, tax increases, and other factors have helped to reduce short-term deficits, the long-term challenge is still largely unaddressed. Growing mandatory and interest spending along with relatively flat revenue are projected to cause deficits and debt to rise over the next decade and beyond, with trillion-dollar deficits returning by 2022, if not sooner.

CBO's March projections reiterate the need for serious discussion on how to reform our entitlement programs and tax system in order to fund the country's priorities. Debt ought to be returned to a sustainable path in order to secure the economy and give lawmakers needed flexibility in the event of an economic downturn.