How to Balance the Budget in Three, or Ten, Years
Here are three possible budgetary futures for the US government. Which one do you prefer?
Option A: Balance in 3 Years. If we freeze all federal outlays (spending) at the 2014 level, the budget will balance in three years (by 2017).
Option B: Balance in 10 Years. If we freeze all outlays at the 2014 level except the "big three" entitlements (Medicare, Medicaid, and Social Security), the budget will balance in ten years (by 2023).
Option C: Balance Never. If we do nothing to rein in spending, federal deficits will grow in perpetuity, the national debt will reach unprecedented heights, and by the 2030s the US government will be forced to default on its debt.That, in turn, will in all likelihood trigger a global economic crisis and impoverish millions of working Americans.
Which option do you prefer?
If you answered either A or B, congratulations, you’re a member of the tea party.
Dean Clancy, a former senior White House budget official, is FreedomWorks Vice President for Public Policy.
NOTES: All figures are annual. All three options are based on projections by the Congressional Budget Office (CBO) in its Budget and Economic Outlook: 2013 to 2023. All three options assume that on average GDP and total receipts grow at about 4 percent, with total receipts remaining constant at about 19.1 percent of GDP. Option A assumes total outlays grow at 0 percent. Option B assumes total outlays grow at 3.6 percent overall, with the Big Three programs together growing at their currently projected rate of 6.2 percent and the remaining programs growing 0 percent. Option C assumes total outlays grow at 5 percent. In both Options B and C, Medicare and Social Security grow at 6 percent and Medicaid grows at 7.5 percent.