CBO Issues Not-So-Rosy Long-Term Budget Outlook
In the short term, the federal deficit will fall. But, starting in 2016, as more baby boomers join the Medicare ranks, the deficits again will pick up. With this news in the backdrop, Treasury Secretary Jacob Lew warned Republican lawmakers of the dangers of risking a government default as part of their efforts to derail the implementation of the health law.
The New York Times: Budget Office Warns That Deficits Will Rise Again Because Cuts Are Misdirected
Annual federal deficits will continue to fall in the short term, the budget office reported in its yearly long-term outlook, because of the recent spending cuts in military and domestic programs and rising tax collections in a recovering economy. … But starting in 2016, deficits are projected to rise again as more baby boomers begin drawing from Medicare, Medicaid and Social Security — the fast-growing entitlement programs, which Democrats and Republicans cannot agree on how to rein in (Calmes, 9/17).
The Associated Press/Washington Post: Congressional Budget Office Study Warns Of Long-Term Debt Woes In United States
The government has never defaulted on its obligations and Treasury Secretary Jacob Lew warned Tuesday that Congress needs to act to increase the debt limit by mid-October but he warned Republicans that President Barack Obama will never go along with their demand to derail implementation of the new health care law as part of a measure to fund the government or increase the debt limit (9/17).
Los Angeles Times: Treasury's Lew Warns Congress It's Risky To Delay Raising Debt Limit
As the nation fast approaches its debt limit, Treasury Secretary Jacob J. Lew issued his strongest warning yet to Congress about the economic consequences of waiting until just before the deadline to pass an increase. … Republicans are balking at raising the $16.7-trillion debt limit, which Congress must do by as early as mid-October, unless the Obama administration agrees to major concessions including deep spending cuts and a delay in implementing the healthcare reform law (Puzzanghera, 9/17).
In other fiscal news -
The Wall Street Journal: Medical-Price Inflation Is At Slowest Pace In 50 Years
Medical prices are rising at their slowest pace in a half century, a shift in the health-care industry that could provide relief to government and businesses' budgets while also signaling consumers are being left with a larger share of the bill. The prices paid for medical care in July rose just 1 percent from a year earlier, the slowest annual rate of growth since the early 1960s, according to Commerce Department data. Health-care increases now trail overall inflation, which itself has been historically slow in recent years (Morath and Radnofsky, 9/17).