Behold, the projected consequences of four more years. Philip Klein surveys the wreckage described in the latest comprehensive budget report from the nonpartisan Congressional Budget Office (most of these estimates assume an unrealistic "baseline" in which the "doc fix" doesn't happen and various unpopular cuts to Medicare actually go into effect):
CBO: Public debt by 2023 = $19.9 trillion— Philip Klein (@philipaklein) February 5, 2013
CBO: Gross federal debt (public debt + $ owed to trust funds) to reach $26 trillion by 2023— Philip Klein (@philipaklein) February 5, 2013
CBO: Absent changes, "debt will rise sharply relative to GDP after 2023."— Philip Klein (@philipaklein) February 5, 2013
SS, Medicare, Medicaid & Obamacare exchanges to cost $24.5 trillion from 2014-23, 52% of total fed spending— Philip Klein (@philipaklein) February 5, 2013
CBO: Unemployment to stay above 7% in 2014 for 6th straight yr, "the longest period of such high unemployment in the past 70 years."— Philip Klein (@philipaklein) February 5, 2013
CBO: In 2022, "7 million fewer people will have employment-based health insurance as a result of the Affordable Care Act"— Philip Klein (@philipaklein) February 5, 2013
And finally, the CBO's catch-all caveat that actual reality is significantly worse than even their gloomy report suggests:
CBO: "projections for the period covered in this report do not fully reflect long-term budgetary pressures"— Philip Klein (@philipaklein) February 5, 2013
So between now and the end of the decade, the national debt will explode, at least seven million people will be denied keeping their current plan even if they like it (other estimates are considerably higher), federal healthcare spending is poised to swamp the rest of the federal budget, and unemployment is likely to remain dismally high. After 2023, the picture gets much worse. Former CBO director Douglas Holtz-Eakin runs through some of these numbers in chart form in this user-friendly report, which is worth a read. The actuaries also expect sluggish growth in the near and medium-term future, stunted by the growing debt burden. Tepid growth would still beat Q4 of 2012, in which the US economy actually contracted for the first time since 2009. Jim Pethokoukis adds a critical piece of information that contextualizes the anticipated debt boom:
The flood of new debt comes despite tax revenue from 2015 through 2023 being higher than the historical average. We have a spending problem.
In spite of higher than average expected revenues -- thanks to President Obama's various tax hikes and some moderate GDP growth -- the CBO nevertheless foresees nearly $9 trillion in publicly-held red ink staining our books in the next decade alone. One trenchant snapshot of this phenomenon comes in 2023, when the CBO sees the government collecting double the tax dollars that it did in last year, yet the annual deficit will still hit $978 billion. As Pethokoukis summarizes, we have a spending problem, no matter what the president may believe. I encountered a similar head-in-the-sand mindset on Fox Business Network the other night, as Democratic strategist Malia Lazu echoed the White House's continued obsession with "more revenues:"
Her only passing nods to fiscal reality were platitudes about both sides needing to "come together" (and Democrats all cheered Paul Ryan when he did precisely that with his latest Medicare reform plan, right?) and the fresh idea of cutting defense spending -- the only federal dollars outlays seem willing to do without. The media, meanwhile, has its Obama pom-poms at the ready, cheering the fact that next year's budget deficit will "only" be $845 billion. I'll leave you with this observation from Klein: "Obama's first budget projected a $533 billion deficit in FY 2013. Now we're supposed to celebrate $845 billion as great progress?" Incidentally, the title of that budget? "A new era of responsibility."