Dear Congress,
Cutting non-defense discretionary spending won’t fix anything. Please get around to the real problem at your earliest convenience.
Love,
The CBO
That’s the gist of the above chart (click to enlarge) and accompanying post from Congressional Budget Office Director Doug Elmendorf . In fact, that graph shows that Congress could cut all non-defense discretionary spending and we’d still be underwater in a decade. Elmendorf writes that there is no foreseeable way to patch holes in the long-term budget without making changes to entitlements, defense and/or raising new revenues. Now, there’s nothing new about this information, but it’s worth mentioning while Democrats and Republicans are scrumming on the Hill over pennies. And Elmendorf’s greatest concern seems to be that the time they’re frittering away could have consequences:
Although there are tradeoffs in deciding how quickly to implement policy changes that would reduce future budget deficits, there are important benefits to deciding quickly what specific combination of reductions in spending and increases in taxes will be used to put fiscal policy on a sustainable path. Most important, enacting policy changes soon would allow for gradual implementation of those changes while still limiting further increases in federal debt and the negative consequences that would flow from those increases. Moreover, enacting policy changes soon would probably provide some boost to economic activity by reducing uncertainty and holding down interest rates.