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CBO economist tells deficit-cutting 'supercommittee' of stark choices

WASHINGTON — Members of Congress' bipartisan deficit-cutting "supercommittee" tasked with finding $1.5 trillion in deficit reduction by Thanksgiving got a sobering assessment Tuesday of the daunting task ahead.

"The nation cannot continue to sustain the spending programs and policies of the past with the tax revenues it has been accustomed to paying," testified Douglas Elmendorf, director of the nonpartisan Congressional Budget Office. "Citizens will either have to pay more for their government, accept less in government services and benefits, or both."

With Elmendorf as its guide, the committee of six Democrats and six Republicans from the House of Representatives and the Senate was given a tour of the nation's economic landscape. It wasn't a pretty picture.

Elmendorf warned that if current policies don't change, the combination of the nation's aging population and escalating health care costs will drive federal spending well past the revenue the federal government collects.

His bleak assessment was accompanied by a dismal CBO economic forecast that the weak economy will keep the unemployment rate around 9 percent through the end of 2012.

"The economic outlook remains highly uncertain, however," he told the committee. "The recent recession was unusual compared with previous ones in terms of its causes, depth and duration. As a result, the recovery has had unusual features that have been hard to predict, and the path of the economy in coming years is also likely to be surprising in various ways."

With all the bad news as a backdrop, the committee spent its second meeting pondering how America got into this mess, now more than $14 trillion in debt, and how it's going to get out of it.

Several members staked out familiar lines, with Republicans pointing at the rising costs of entitlement programs such as Medicare, Medicaid and Social Security.

"We have a spending-driven debt crisis," said Rep. Jeb Hensarling, R-Texas, the committee co-chair, echoing GOP sentiments that Congress has a spending problem, not a tax problem.

Democratic members blamed the debt largely on the costs of the wars in Iraq and Afghanistan and the tax cuts initiated by former President George W. Bush.

"Today we will hear about how we lost our way," said Rep. Xavier Becerra, D-Calif., espousing his party's mantra that tax breaks for wealthy Americans and corporations was a key culprit to the debt problem.

WASHINGTON

For the third year, deficit crosses $1T

The federal budget deficit reached $1.23 trillion in August. The third straight $1 trillion-plus deficit adds pressure on Congress and the White House to reach agreement on a long-term plan to trim government spending. The Treasury Department said the deficit grew by $134.2 billion last month. At that rate, the nonpartisan Congressional Budget Office projects the deficit will total $1.28 trillion when the budget year ends in September. That would nearly match last year's $1.29 trillion imbalance and come in below the record $1.41 trillion hit in fiscal 2009.

Associated Press

CBO economist tells deficit-cutting 'supercommittee' of stark choices 09/13/11 [Last modified: Tuesday, September 13, 2011 11:13pm]

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