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CBO’s Long-Term Budget Outlook

Posted by Peter Orszag on June 30, 2010 at 01:26 PM EDT
The Congressional Budget Office today released its long-term budget outlook.  Just like the long-term outlook in our own Budget, the CBO report concludes that we are on an unsustainable fiscal course. About this, there is no ambiguity.
 
The report also highlights the importance of the Affordable Care Act to our fiscal trajectory. As I have often said, slowing the rate of health care cost growth is the single most important action we can take to reduce our long-term fiscal shortfall. The report confirms that the enactment and successful implementation of the Affordable Care Act is a key step toward a healthier fiscal future:
  • First, CBO reiterates that the Affordable Care Act will reduce the deficit by more than $100 billion in the current decade and more than $1 trillion in the decade after that — which represents the most deficit reduction enacted since the 1990s. 
     
  • Second, the report demonstrates the importance of successfully implementing the Affordable Care Act.  The report includes a scenario in which a number of the Affordable Care Act’s cost-saving measures are curtailed by Congress at the end of this decade and, not surprisingly, not implementing the Act results in significantly higher deficits.  Historically, Congress has generally stood by its enacted health care savings — which is also what statutory Pay-As-You-Go requires and our fiscal trajectory demands.  Nonetheless, in showing the results of this backward step, the report highlights why the Affordable Care Act is such an important step forward.
Make no mistake — we remain on an unsustainable fiscal path, even after enactment of the Affordable Care Act.  The key fiscal question is how we will build on the deficit reduction embodied in the legislation – both in terms of making sure it is realized and also in terms of moving forward with other efforts to reduce long-term deficits further.  The Administration is strongly committed to addressing this challenge. 
 
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