CBO’s Latest Budget Projections Assume End Of ‘Doc Fixes’
The Congressional Budget Office projects that rebounding revenue, combined with the force of the debt-reduction deal that became law earlier this month, will reduce the deficit by an estimated $3.3 trillion.
The Washington Post: Budget Deficit To Hit $1.3 Trillion This Year, Congressional Analysts Report
The nonpartisan Congressional Budget Office says that revenue, coupled with the debt-reduction deal signed into law this month by President Obama, would cut projected deficits by $3.3 trillion, or nearly half, over the next 10 years. But that reduction will be realized only if lawmakers allow a series of tax cuts and other temporary revenue measures to expire. The prospect of that happening is considered dicey by many analysts, given the divisive political environment in Washington. The laws in question include … cuts in Medicare payment rates to doctors (Fletcher, 8/24).
The New York Times: Modest Expectations Urged On Deficit Cuts
Annual deficits would be $5 trillion higher for the decade, or a total of $8.5 trillion, assuming the White House and Congress continue several policies as in years past — keeping the lower income-tax rates of 2001 and 2003, which already were extended by two years last December; adjusting the alternative minimum tax annually so it does not hit middle-class taxpayers, and blocking a mandated cut in Medicare payments to doctors. The result would be deficits averaging 4.3 percent of gross domestic product instead of 1.8 percent, the budget office said; economists generally say annual deficits should not exceed 3 percent of gross domestic product (Calmes, 8/24).
The Wall Street Journal: Forecast Clouds Debt-Cut Outlook
The congressional panel charged with finding ways to reduce the deficit by at least $1.2 trillion over the next 10 years received daunting news Wednesday when the Congressional Budget Office projected stubbornly high unemployment will accompany large deficits for much of the decade. … The challenge of reducing the deficit while spurring job growth is a key point of division between the two parties. Many Democrats are arguing for more spending to stimulate the economy; many Republicans are arguing for spending cuts and regulatory relief to the same end. … CBO cautioned that its projections make the unlikely assumption that Congress will let income and payroll tax cuts expire on schedule and reduce the fees paid to doctors who treat patients covered by Medicare (Paletta, 8/25).
Kaiser Health News: Capsules: New Budget Projections Assume End Of 'Doc Fixes'
New figures released by the Congressional Budget Office today include a budget assumption that almost never comes true: The imposition of steep Medicare cuts for physicians" (Carey, 8/24).
Modern Healthcare: CBO Sees Potential For Lower Deficits
The Congressional Budget Office said it expects deficits in the next 10 years to total $3.5 trillion, significantly lower than the $6.7 trillion the federal agency forecasted in March. About two-thirds of the reductions from the CBO's earlier projections come from enacting the Budget Control Act, which President Barack Obama signed into law this month. Specifically, this latest estimate accounts for certain policies specified in current law, including what the CBO called "sharp reductions in Medicare's payment rates for physicians' services" that are scheduled to take effect at the end of this calendar year. The report noted that if some of the changes specified in current law did not occur, and recent policies were continued, then much larger deficits — and a greater debt — would be the result. For instance, if cuts to Medicare's payment rates for physicians' services were prevented, then annual deficits from 2012 to 2021 would average 4.3 percent of the nation's gross domestic product, compared with the 1.8 percent outlined in the CBO's baseline projections (Zigmond, 8/24).