The GAO report emphasized, “Growth in health-related spending—Medicaid and health insurance for state and local employees and retirees—is the primary driver of the long-term fiscal challenges facing the state and local governments.
“If unchanged, the federal government’s increased spending and rising deficits will drive a rising debt burden,” the report says. “At the end of fiscal year 2007, federal debt held by the public exceeded $5 trillion. This growth in the federal government’s debt cannot continue unabated
without causing serious harm to the economy. In the last 200 years, only during and after World War II has debt held by the public exceeded 50 percent of [gross domestic product].”
The GAO has recommended tax increases and spending cuts to deal with the issue. But in an election season it’s unlikely either presidential candidate would embrace the idea. Moreover, Sen. John McCain, the presumptive Republican presidential candidate, said he would not only make President George W. Bush’s tax cuts permanent if he were elected but would also look at other ways he can lower taxes.
Still, the GAO report says, “policymakers could phase in the policy changes so that the tax increases or spending cuts would grow over time and allow people to adjust.”
“Delaying action would make future adjustments even larger. Under our alternative simulation, waiting even 10 years would require a revenue increase of about 45 percent or noninterest spending cuts of about 40 percent. This gap is too large to grow out of the problem. To be sure, additional economic growth would certainly help the federal government’s financial condition, but it will not eliminate the need for action,” the report says.
Baucus agrees that the issue requires immediate attention, however, it’s unlikely that lawmakers will take action to address the matter until after a new administration takes office in 2009.
But by then the issue will no doubt worsen, the GAO report says.
“The longer action on reforming heath care and Social Security is delayed, the more painful and difficult the choices will become. Simply put, the federal budget is on an unsustainable long-term fiscal path that is getting worse with the passage of time. The window for timely action is shrinking.”
“If unchanged, the federal government’s increased spending and rising deficits will drive a rising debt burden,” the report says. “At the end of fiscal year 2007, federal debt held by the public exceeded $5 trillion. This growth in the federal government’s debt cannot continue unabated
without causing serious harm to the economy. In the last 200 years, only during and after World War II has debt held by the public exceeded 50 percent of [gross domestic product].”
The GAO has recommended tax increases and spending cuts to deal with the issue. But in an election season it’s unlikely either presidential candidate would embrace the idea. Moreover, Sen. John McCain, the presumptive Republican presidential candidate, said he would not only make President George W. Bush’s tax cuts permanent if he were elected but would also look at other ways he can lower taxes.
Still, the GAO report says, “policymakers could phase in the policy changes so that the tax increases or spending cuts would grow over time and allow people to adjust.”
Baucus agrees that the issue requires immediate attention, however, it’s unlikely that lawmakers will take action to address the matter until after a new administration takes office in 2009.
But by then the issue will no doubt worsen, the GAO report says.
“The longer action on reforming heath care and Social Security is delayed, the more painful and difficult the choices will become. Simply put, the federal budget is on an unsustainable long-term fiscal path that is getting worse with the passage of time. The window for timely action is shrinking.”
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
