The Incredible $759 Billion “Shrinking Deficit”
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Under-promise and over-deliver? After four years straight of trillion dollar deficits, the White House announced that this year’s deficit will be a mere $759 billion. A full $200 billion less than expected. From the AP:
The White House said Monday that the federal budget deficit for the current fiscal year will shrink to $759 billion. That’s more than $200 billion less than the administration predicted just three months ago. (AP, 7/8/13)
While some will point to shrinking deficits as a sign that our fiscal future is looking up, coming in below a trillion dollars is hardly reason to celebrate. The sequester was a small step in the right direction, but it only represents three cents on the dollar in terms of the overall federal budget. Meanwhile, the real drivers of our debt – mandatory spending programs – remain virtually untouched, while they become an even lager share of the federal budget.
“Relative to the Budget, projected total outlays have decreased by $4 billion in 2014, but increased by $148 billion over the 10-year budget horizon, 2014 to 2023, primarily in the last five years. These increases in outyear spending are primarily the cumulative upward effect of economic and technical reestimates in a number of mandatory programs, as well as in interest payments.” (OMB Mid-Session Review FY2014, 7/8/13)
Social Security, Medicare and Medicaid, which make up the bulk of our mandatory spending, already totaled 43% of our total budget in 2011. This will only get worse without real reform. Unless we address these long-term drivers of our debt, we’ll continue to see massive deficits.
If Washington is going to ignore the problem, the least they could do is try not to celebrate it.