|Rep. Jean Schmidt|
Ohio’s Second Congressional District
The Congressional Budget Office released its long-term budget outlook last week. The report didn’t tell us anything we didn’t already know. In short, the nonpartisan CBO provided us with yet another warning that continuing down our current budget path will result in disaster.
The CBO is concerned about our rising level of debt. At the end of 2008, federal debt held by the public amounted to 40 percent of Gross Domestic Product (the value of all goods and services produced in the country). That is “a little above the 40-year average of 38 percent,” according to the report. By the end of this fiscal year, debt held by the public will be about 70 percent of GDP – the highest since around the time of World War II.
Unfortunately, the near-term future is going to make matters worse. “The aging of the baby-boom generation portends a significant and sustained increase in the share of the population receiving benefits from Social Security, Medicare, (and) long-term care services financed by Medicaid,” the CBO said. “Moreover, per capita spending for health care is likely to continue rising faster than spending per person on other goods and services.” In other words, if we maintain our current policies, the federal debt held by the public will reach 200 percent of GDP by 2037.
Since President Obama took office in 2009, federal spending has gone up by approximately 25 percent each year – and the federal government has run annual deficits of more than $1 trillion for the last four years. In that same time, total federal debt has grown by some $4 trillion. According to the CBO, “the explosive path of federal debt … underscores the need for large and timely policy changes to put the federal government on a sustainable fiscal course.”
If we don’t stop our deficit spending soon, the United States will face higher interest on the money it’s been borrowing and will have fewer options in responding to the next financial crisis, the CBO said.
The time is now to put the federal budget on a sustainable course. We simply cannot afford to continue throwing money at every problem that arises. I hope President Obama will work with Congress to make the changes necessary to avert a foreseeable budget disaster.