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In the Long Run

There’s a widespread view in the media that something like the “cadillac tax” on high-value insurance plans is meaningless as a long-term cost control strategy since it won’t be implemented until 2018. At the same time, it tends to be the very same people in the press who are very insistent that it’s necessary to do something now about the long-term fiscal situation. The words “reform entitlements” often get bandied about in this context.

Crucially, though, there’s nothing congress can do today about deficits 10 years from now other than make promises about what future congresses will do. Any tax increases or outlay reductions you care to schedule always could be revised. So we should always exercise caution about the future — a CBO score of a bill’s future impact on the deficit is not a clairvoyant glimpse into the future. But the very essence of focusing on long-term budgetary issues is asking people to make promises about future congresses. It’s not some kind of trick or ruse.

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