SUSIE GHARIB: If the nation keeps doing what it has done in the past — extending
tax breaks and putting off spending cuts — the deficits, over the next
decade, will top $11 trillion. That’s the sobering update from the
Congressional Budget Office. And as Darren Gersh reports, the deficit
dilemma is an increasingly tight fit.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: If we cut the
deficit right away, eliminating the Bush tax cuts and slashing defense and
other spending, the deficit will drop dramatically, but the economy will
DOUGLAS ELMENDORF, DIR., CONGRESSIONAL BUDGET OFFICE: Taken together,
these policies will generate a sharp fiscal contraction.
GERSH: If we wait to cut the deficit, that will boost the economy in
the next few years, but as more baby boomers retire, the cost of Social
Security, Medicare and other health care spending will almost double over
the next 10 years as a share of our economy. And that could send the
national debt skyrocketing to more than $23 trillion.
ELMENDORF: The longer that we wait, as a country, to make the sort of
choices that we have to make, the harder it will be to make them because
more debt will have accumulated.
GERSH: Most budget wonks agree we should keep the economy growing
now, but put in place cuts over the medium to long term. It’s a policy that
sounds good on paper, but has been hard to put into practice politically.
Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.