The former director of the Congressional Budget Office is sounding an urgent message to Congress: It’s time to make big changes to curb the $1 trillion-plus — and growing — deficit.
“It’s simply a matter of arithmetic that the United States cannot continue on its current course,” said Doug Holtz-Eakin, the former CBO director and now president of the think tank American Action Forum.
The federal debt is now larger than the size of the economy, and countries in this situation often see a growth slowdown, he said. The United States could “run into a Greek- or Portugal-style crisis,” he said in an interview with The Federal Drive with Tom Temin and Emily Kopp.
The public and congressional focus on GSA is “both sad but also business as usual,” Holtz-Eakin said. “It’s easy to point to the GSA scandal and make a fuss about it … but it doesn’t really get at the core of our nation’s financial problems.”
Last month, CBO projected the deficit would reach $1.2 trillion by the end of fiscal 2012 if no significant spending changes were made. This means the deficit will be more than $1 trillion for the fourth straight year, Holtz-Eakin said. He added that it’s typical for the first half of the fiscal year deficit to have a larger deficit because most revenues come in later in the fiscal year. The projections will be revised in August, taking into account revenues and tax returns, he said.
For agencies’ financial managers, the update on the deficit projections suggests agencies should expect even tighter budgets for next year. “The budgetary pressures are real and they’re not getting smaller — they’re getting larger,” he said.
But Holz-Eakin acknowledged it’s unlikely Congress will heed his message anytime soon.
“Most observers of the Washington scene would expect very little substantively to get done this election year, but really are counting on next year for the year when the nation’s finances take a sharp turn for the better,” he said.
Tom Temin is the host of The Federal Drive, which airs from 6-8 a.m. on 1500 AM in the Washington, D.C. region and online everywhere. Tom has 30 years experience in journalism, mostly in technology markets. Before coming to Federal News Radio, he was a long-serving editor-in-chief of Government Computer News and Washington Technology magazines.