MY VIEW: Bill Frenzel June 2013
The recent revisions to the CBO projections improved our short-run outlook, a welcomed development, but they have also triggered a wave of overconfidence currently hitting Washington. The Center for American Progress recently called to hit the fiscal reset button and turn to other issues, which we showed would be a major mistake. However, the long-term structural issues were always the real problem, and with insufficient progress made on that front, CRFB and others have shown that it is far too early to declare victory on debt and deficits.
CRFB board member Bill Frenzel echoes this reality in his most recent Brookings blog post, illustrating that while there have been minor improvements, the long-term forecast tells a similar story:
Despite these tiny rays of sunshine, all the long-term forecasts remain dismal. The long-term deficit and debt problems have not changed. But, small reasons to refrain from hard choices are never wasted in Washington. Inaction marches on. Neither Congress, nor the President, is conducting any observable negotiations. Nobody wants to fix the debt.
Having side-stepped the long term problem, both branches and both parties are content to wait until the last moment before worrying about defaulting on the full faith and credit of the United States. For now, political practitioners are giving their attention to assessing their bargaining clout, and predicting election victories, rather than in solving either the long, or short-term fiscal crisis.
Instead of continuing to focus on areas of the budget that are not the drivers of long-term debt, Frenzel argues that we would be better off by turning to the tough issues that so far have not been addressed - entitlement and tax reform:
On the hard stuff, entitlements and taxes, we are no better off than we were five years ago. The size of the problem, and its dire consequences, have long been common knowledge. The most predictable crisis in history has, as yet, not even generated a good discussion.
Every minute of delay in doing the hard stuff will make its ultimate cost more painful, both for the taxpayers, and for the recipients of federal spending.
So the answer to the question of what ever happened to our fiscal crisis is: little or nothing. The threat has not subsided. It has merely been ignored. The economic albatross of deficit and debt continues to threaten our future.
Click here to read the full op-ed.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.