CBO director: US budget problem fundamentally different than in past (VIDEO)
The rising number of seniors and the increase in health-care costs means the US government will have to cut some things it has done in the past or raise taxes, says Douglas Elmendorf, director of the Congressional Budget Office (CBO).
In solving the nation's budget problem, the hardest thing for policymakers and citizens to deal with is the fact that nation's current budget problem "is fundamentally different going forward than it has been in the past," says Douglas Elmendorf, director of the Congressional Budget Office, Congress's forecasting and analysis arm.Skip to next paragraph
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Speaking Tuesday at a Monitor-sponsored breakfast for reporters, Mr. Elmendorf warned that, as it stands, the US government cannot afford to do all the things it has done in the past. "We cannot repeat the budget past in the sense that we cannot have revenues at the same share of GDP, and have the same sorts of programs for older Americans, and run the rest of the government in the same way, the way we did before."
'We can do one or two of those three things," he added. "One can't do all of them."
The reason, he said, is "because there are a lot more older Americans, and health care is much more expensive relative to the rest of the economy."
In practical terms, that means either the government will have to raise taxes to boost revenue, cut spending for seniors, or cut spending on other federal functions.
Elmendorf's comments Tuesday morning provide context for the meeting Vice President Joe Biden was scheduled to hold Tuesday afternoon at the Capitol with a bipartisan, bicameral group seeking to forge a plan to raise the federal government's debt ceiling while cutting federal spending.