Senate Budget Committee Hearing on CBO Long-Term Fiscal Outlook
Last week, CBO Director Keith Hall testified before the Senate Budget Committee on the release of CBO’s Long-Term Budget Outlook. Senators questioned Hall on the implications of debt and deficit projections for issues like economic growth, income inequality, and climate change.
In his testimony Hall confirmed the negative effects and risks associated with our current and projected debt levels, noting that high debt can lead to lower standards of living and crowd out private investment, which is bad for growth. Asked by Senator Bob Corker (R-TN) whether the federal government was ready for another crisis, Hall answered that another one would be “problematic” and that the government is not, in fact, fiscally prepared.
Hall also confirmed that the projected growth of deficits is largely attributable to an aging population and rising health care costs, which will place stress on mandatory spending. He agreed with a statement by Senator Tim Kaine (D-VA) that reforms to federal benefit programs, coupled with tax reform, are the answer to the country's fiscal challenges.
Both the testimony and CBO report highlight the fiscal problems facing the country. “We are on an unsustainable path,” stated Hall.
Quoting President John F. Kennedy, Chairman Mike Enzi (R-WY) said in his opening statement, “…the best time to fix the roof is when the sun is shining – that same logic should be applied to boosting our economy and addressing our long-term fiscal challenges.”
Also of note was an exchange between Ranking Member Bernie Sanders (I-VT) and Enzi over the use of the Overseas Contingencies Operations (OCO) fund (intended for war spending) to bypass sequestration caps on defense spending. During this exchange Sanders referred to the strategy as “gimmickry” and “a budgetary trick”, with the chairman responding that he’d be happy to work with Sanders to reduce gimmicks.