The following HTML text is provided to enhance online
readability. Many aspects of typography translate only awkwardly to HTML.
Please use the page image
as the authoritative form to ensure accuracy.
Choosing the Nation’s Fiscal Future
We present a clear set of standards that anyone can apply to assess how close any given set of budget proposals comes to achieving sustainability. All of the paths to sustainability involve tough choices—most likely requiring new limits on what the government will pay for and possibly requiring new ways to pay for programs that stay in the budget. By presenting some of the major building blocks of a sustainable budget and estimates of their budget effects, the report provides a starting point for practical choices.
We recognize that deeply held (and at times, conflicting) values arethe lenses through which different people will study and chooseamong the alternatives. Because it is so difficult to achieve and maintain a sustainable budget, the committee believes that any effort that hopes to succeed must be rooted in the values of fairness, economic opportunity, and personal and family security that people hold dear.
The committee recognizes that prospects for addressing the U.S. fiscal challenge are intertwined with those of other nations around theglobe. The many economic and financial ties between the United States and the rest of the world are now reinforced by increased dependence on foreign investors to fund the nation’s growing national debt. The same demographic trends and environmental challenges that contribute to budget pressures in the United States are affecting many other countries and may require cooperative solutions.
The economic downturn has complicated the fiscal challenge. Right now the nation faces an extraordinary clash between demands for expanded government and the inconvenient reality that commitments already made are expected to consume all the available revenues and then some. Reconciling those demands for more with the need to deliver less will require political creativity and compromise. However, the committee believes that reasonable options are still available if action is taken forcefully and soon.
It would be wise to take painful steps now to avoid more painful ones later on. These steps should distribute the required sacrifices fairly and give people affected by benefit changes ample notice so they can adjust their financial plans accordingly. The remainder of this report attempts to spell out some ways that this can be done.
1. The cumulative effect of the larger near-term deficits implied by CBO’s August revision to its 10-year baseline would be to increase the estimate of debt-to-GDP ratio in 2019 by about 7 percentage points relative to that resulting from the baseline estimates used