Rep. Calvert Statement on CBO Long-Term Budget Outlook

Statement

Today Rep. Calvert, a member of both the Budget and Appropriations Committees, issued the following statement in response to the Congressional Budget Office's (CBO) long-term budget outlook which projects that the U.S. debt will overtake the size of the entire U.S. economy this year and debt held by the public will outpace the economy by the year 2021.

"Today's CBO projection is a wake-up call to Washington," said Rep. Calvert. "We are teetering on the precipice of an economic crisis if Congress does not work together to rein in spending and begin to pay down our debt. Right now our country needs leadership -- a trait that has been sorely lacking in both the White House and the Senate. As Congress moves forward with debt ceiling negotiations, there must be recognition that the next crisis will be our inability to borrow as credit markets doubt America's ability to pay our bills.

"In addition, the American people need a plan for the future -- a budget -- from their leaders in Washington. House Republicans passed a budget that curtails spending and addresses the exact issues outlined by CBO's long-term budget. It ensures Medicare's solvency and includes realistic and responsible budget decisions that will avert the coming economic crisis.

"In fact, the current economic problems we are experiencing -- stagnant growth, high unemployment, low consumer confidence -- is due to economic uncertainty. The threat of massive tax increases, more regulation, and higher interest rates do not encourage businesses to invest and hire today. The Ryan Budget, passed by the House, addresses our most pressing issues while paving a path to prosperity for future generations. The House has acted; it is time for Senate Democratic Leader Reid and our President to stop avoiding the issues and take action."

Some highlights of the CBO projection:

* DEBT: Total debt will overtake the size of the entire US economy this year; debt held by the public will eclipse the economy by the year 2021.
* SPENDING: Government spending as a share of the economy will increase by nearly 70 percent between now and 2035 (to 33.9 percent of GDP) versus the historical average of 20 percent.
* INTEREST PAYMENTS: the federal government's interest payments alone are projected to consume 9 percent of our entire economy by 2035, up from about 1 percent today.
* HEALTH CARE COSTS: The CBO report affirms that the massive health-care overhaul fails to address the explosion in health care costs. Mandatory federal spending on health care will increase by 86 percent from 5.6 percent of GDP today to 10.4 percent of GDP over the next 24 years.
* CRISIS LOOMS: "Growing debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates."

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