This morning I testified before the House Budget Committee on CBO’s latest long-term projections—released yesterday in The 2014 Long-Term Budget Outlook. To get a quick overview of the report, check out The 2014 Long-Term Budget Outlook in 26 Slides (shown below).
My remarks at the hearing, as well as the report and the slides, note the following conclusion of CBO’s analysis:
Although the gap between federal spending and revenues has narrowed recently, CBO’s long-term projections show a substantial imbalance in the federal budget, with revenues falling well short of spending if current laws governing taxes and spending stayed generally the same. After the next few years, growing budget deficits would push federal debt back to and above its current high level. By 2039, federal debt held by the public would exceed 100 percent of gross domestic product, a level seen only once before in U.S. history (just after World War II). Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.