The deficit picture over the next decade continues to get dramatically better thanks in large part to the slowdown in the growth health care spending and an improving economy. According the the Congressional Budget Office’s new deficit projections, our ten year cumulative will be $618 billion lower than the last projections. From the CBO:
CBO’s estimate of the deficit for this year is about $200 billion below the estimate that it produced in February 2013, mostly as a result of higher-than-expected revenues and an increase in payments to the Treasury by Fannie Mae and Freddie Mac. For the 2014–2023 period, CBO now projects a cumulative deficit that is $618 billion less than it projected in February. That reduction results mostly from lower projections of spending for Social Security, Medicare, Medicaid, and interest on the public debt. [...]
Medicare. CBO’s current projection of net mandatory spending for Medicare is $85 billion (or 1.2 percent) lower over the 2014–2023 period than it projected in February 2013. The major components of that change are a reduction of $143 billion in projected gross spending for benefits, partially offset by reductions of $48 billion in collections of offsetting receipts and $10 billion in Medicare savings as a result of sequestration.
While the so called “deficit hawks” have dominated Washington for years warning about how we must cut entitlement benefits right away, the deficit picture has actually been improving dramatically. The natural slowdown in health care spending over the past three years has actually produced bigger savings than many of the plans put forward to cut benefits over the past few years.
In a sane world the improving deficit picture would convince our leaders to drop the misguided and dangerous push for austerity at this moment. Sadly, Washington is rarely sane.
Photo by 401(k) 2013 released under Creative Commons License