Elmendorf to NY Fed: 'We Can't Repeat the Past'
Recently, CBO Director Doug Elmendorf spoke to the Federal Reserve Bank of New York about current policies and how they affect the nation's fiscal future. Elmendorf’s presentation, titled Federal Budget Math: We Can’t Repeat the Past, highlighted key aspects of federal budget policy in the last forty years and of CBO’s projections for 2021.
Elmendorf's key argument is that we cannot continue to do everything we'd like to -- the math just doesn't add up. In particularly, we cannot do all three of the following:
- Keep federal revenues at the average share of GDP seen during the past 40 years.
Provide the same sorts of benefits for older Americans that we have provided in the past 40 years.
Operate the rest of the federal government in line with its role in the economy and society during the past 40 years.
As Elmendorf explains, "The question is not whether to change current policies, but when and in what ways." He continues, "Fiscal policy cannot be put on a sustainable path just by eliminating waste and inefficiency; instead, changes will need to significantly affect popular programs, people’s tax payments, or both."