Fiscal discipline is politically costly, but inaction will be disastrous. How can we restore sanity to federal budgeting?



At a recent Senate hearing on the fiscal outlook, legislators and budget experts said the quiet part out loud: the United States is running historically large deficits in non-crisis times, and we need to stop pretending that we can grow our way out of it.

Washington’s problem isn’t ignorance. It’s that the only politically safe position is to acknowledge the debt crisis — and then do nothing to fix it. Congress lacks an effective mechanism to make politically difficult decisions possible.

The message from the hearing was stark: this is not a crisis caused by recession or war. It is the result of policy choices lawmakers refuse to confront.

The federal budget is increasingly tilted toward unsustainable promises made to older Americans, financed by borrowing that imposes the costs on younger Americans. Earlier CBO projections show that by 2029, the federal government will spend roughly 50 cents of every budget dollar on benefits for Americans 65 and older.

The long-term picture is even worse. According to the government’s Financial Report, more than 100 percent of long-term unfunded obligations stem from just two programs: Medicare and Social Security (their combined shortfalls reflect the difference between their dedicated taxes and projected spending, which exceed the total because the rest of the budget shows a small projected surplus over the same period).

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