Swelling Deficit Continues to Choke Taxpayers

The Congressional Budget Office recently stated that the budget deficit for this year will reach $407 billion—2.9 percent of the GDP—compared to last year’s deficit of $161 billion, or 1.2 percent of GDP. The CBO also predicted that the deficits in 2010 would reach $431 billion. Federal spending will also increase 8.3 percent in 2008 from 2007, according to the CBO, while revenues were stated to most likely be less in 2009 than those in 2007.

The growing deficit will not halt, either, according to the CBO: “Updated estimates for the 2009–2018 period now show deficits in each year and a cumulative 10-year deficit of $2.3 trillion.”

Government spending continues at a rapid pace, and without fundamental reform it will be difficult to slow the growth of government. Not only does wasteful discretionary spending on earmarks need to be cut, but Congress must face the looming crisis in entitlement spending. The CBO explained, “Over the long term, the federal budget is on an unsustainable path. Without changes in current policies, the growing demand for resources—caused primarily by rising health care costs and, to a lesser degree by the nation’s expanding elderly population–will put increasing pressure on the budget.” The CBO predicts that in the next ten years, spending for Medicare and Medicaid combined will climb to 6.0 percent of the GDP which is a 30 percent increase. Overall, the governments 3 main entitlement programs will double from 8 percent of the GDP today to 15.6 percent of the GDP in 2045. Simply put, by the year 2045, the rise in entitlement spending will encompass almost the entire federal budget, resulting in either a tremendous tax increase or a drastic cut in government programs.

The Office of Management and Budget’s Director Jim Nussle puts it well stating, “Especially during this period of economic slowdown, taxpayers should be able to keep money in their pockets instead of sending it to Washington in order for lawmakers to tax and spend.” A lower deficit requires lower government spending. Congress’ recent bailout of the mortgage giants Fannie Mae and Freddie Mac, however, demonstrate that our legislature does not hold the same values and ideas as the American taxpayer.