Rob Portman: Heading Off the Entitlement Meltdown

This year's budget deficit of "only" $500 billion has brought some complacency on federal spending and deficits. It shouldn't. The Congressional Budget Office's long-term budget outlook released on July 15 shows a $40 trillion increase in debt over the next two decades.

While a $500 billion deficit is welcome compared with the $1.4 trillion peak in 2009, the decline is temporary. The CBO's other, more realistic "alternative baseline," which assumes Congress continues current policies, projects new debt of $10 trillion over the next decade, followed by $100 trillion over the subsequent two decades. Consequently, the CBO simply stops calculating the national debt after 36 years. Apparently its models cannot conceive of a functioning economy.

And that's the rosy scenario: It assumes no more recessions, wars, terrorist attacks or natural catastrophes, and that interest costs on the national debt will be permanently held down by near-record low interest rates; also that certain ObamaCare price controls widely derided as unrealistic will continue forever.

What drives this long-term debt? It's not falling tax revenues. After averaging 17.3% of the economy over the past 50 years, revenues, the CBO assumes, will level off at 18% of the economy within a decade—with a separate, more detailed estimate showing revenues climbing an additional 1% of the economy each subsequent decade. That estimate shows a typical middle-class family's income-tax burden nearly doubling over the next 25 years. Unfortunately, even these soaring tax receipts cannot keep up with surging spending.

After averaging 20% of the economy over the past 50 years, spending is projected by the CBO to jump to 23%, 29%, and then 34% of the economy over the next three decades—at which point the CBO simply stops counting. All of the rising deficit will come from spending increases (rather than revenue declines), and nearly all of that spending will come from Social Security, health entitlements and the resulting interest costs on the swelling national debt.

Read the rest of Portman's op-ed HERE.

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