CBO Says Short-Term Deficit Cut Won’t Avert Fiscal Crisis
This article is for subscribers only.
The $2.1 trillion in spending cuts passed by Congress in 2011 won’t curb the growth of entitlements that poses a fiscal-crisis risk in the next 25 years, the Congressional Budget Office said in an annual report on long-term budget projections.
The almost 60 percent reduction in annual budget deficits since 2009 won’t avert the ballooning of publicly held debt as an aging population strains the resources of Medicare and Social Security, according to the report, released yesterday. Failure to curb the long-term growth of debt raises the risk of a financial crisis when investors demand “very high interest rates” on government bonds, the nonpartisan agency said.