As previously noted, according to the Congressional Budget Office, if congress sticks by current law the fiscal situation is more-or-less okay for the next 20-25 years. It’s also true that according to the CBO and most everyone you meet, Congress seems unlikely to do that. So the message here should be: “Congress! Don’t live up to your bad reputation! If you don’t want to enact scheduled tax increases and payment cuts to doctors, then you ought to pay for those moves.”
But I got the following press release from Maya MacGuineas at the Committee for a Responsible Federal Budget:
“Aging, health care costs, and an outdated, insufficient revenue system are set to bury the country in debt,” said CRFB president Maya MacGuineas. “Are the findings in this report really the messages we want to be sending our creditors?”
“Policymakers must begin working on real solutions to our long-term problems now,” said MacGuineas. “With debt levels expected to soar, policymakers must embrace meaningful reforms to help us regain control over future deficits, reduce the risks of a fiscal crisis, and keep the economic recovery on track. If this year’s Long Term report isn’t a call to action, I don’t know what is.”
None of this seems accurate. The surprising message from the Congressional Budget Office is that despite aging and health care costs if we allow—as scheduled—the Bush tax cuts to fully expire and allow the AMT to afflict more and more relatively well-off but not super-rich people, then we’re in decent shape. It’s a call not to action, but to inaction. At a minimum, it’s a call for congress to be more hesitant to act. To stop treating these AMT “patches” and “doc fixes” as automatic and start thinking of them as what they are—deviations from a sustainable budget trajectory whose merits ought to be weighed against the merits of possible offsets.