Real ice bucket chal­lenge

The Times Herald (Norristown, PA) - - OPINION -

WASH­ING­TON — I’m just back from va­ca­tion in Europe, where, to judge from the po­lit­i­cal head­lines com­ing out of the United States, this coun­try had no greater care than which of its lead­ers would next be soaked in cold wa­ter.

George W. Bush was doused by his wife, Laura, and then nom­i­nated Bill Clin­ton to take the ice­bucket chal­lenge for char­ity. Mitt Rom­ney got a bucket poured on him by his for­mer run­ning mate, Paul Ryan, who joined other pos­si­ble 2016 pres­i­den­tial as­pi­rants Scott Walker and Chris Christie in per­form­ing the rit­ual. Alan Greenspan, the for­mer Fed­eral Re­serve chair­man, dumped a bucket on his wife, NBC’s An­drea Mitchell, who then tapped Hil­lary Clin­ton for the treat­ment.

In my un­plugged state, the oc­ca­sional ice-bucket up­dates pro­vided a sense of well-be­ing: If this is go­ing on, things must not be too bad in Fer­gu­son, Mo., or with the Is­lamic State, or with Ebola. And so I pur­sued my own ice-bucket chal­lenge, which in­volved a bot­tle of wine and a view of the sea.

But on my first day back in Wash­ing­ton, the Con­gres­sional Bud­get Of­fice threw cold wa­ter on my tran­quil­ity. Its semi­an­nual re­port on the fed­eral gov­ern­ment’s fis­cal health, re­leased Wed­nes­day, was down­right bone-chill­ing.

The top-line con­clu­sions were grim enough, if not cat­a­strophic: The fed­eral bud­get deficit would shrink this year, but less than had been ex­pected. The econ­omy would con­tinue its ex­pan­sion this year — but at less than half the rate fore­cast ear­lier.

Read fur­ther, though, and you see that the long-term fis­cal dis­as­ter, pre­dicted for some time, has crept into the short term. We’re sev­eral years into the ex­pan­sion, and a full re­cov­ery from the 2008 col­lapse should come in the next few years, the CBO pre­dicts — but just in time for that long-dreaded era when in­ter­est pay­ments on the debt and the costs of Medi­care and So­cial Se­cu­rity be­gin to crowd out ev­ery­thing else the gov­ern­ment does. While we watch Lady Gaga and Justin Tim­ber­lake take their ice baths, the wolf is at the door.

Fed­eral debt will reach 74 per­cent of gross do­mes­tic prod­uct this year, more than twice what it

COM­MEN­TARY was at the end of 2007 and higher than in any year since 1950, the non­par­ti­san CBO found. In a decade, it will hit 77 per­cent; in 25 years, 100 per­cent — “a level seen only once be­fore in U.S. his­tory, just after World War II.”

What’s more, 85 per­cent of the fed­eral gov­ern­ment’s spend­ing in­creases be­tween now and 2024 will be con­sumed by just three items: So­cial Se­cu­rity (which will claim 28 per­cent of the in­crease), Medi­care and other health care pro­grams (32 per­cent) and in­ter­est on the debt (25 per­cent). Spend­ing on ev­ery­thing else — mil­i­tary and do­mes­tic pro­grams alike — would fall to the low­est pro­por­tion of the econ­omy since at least 1940, when such statis­tics were first col­lected.

The warn­ings, if not new, are stark, and the re­port of­fers an oc­ca­sion to re­flect on the folly of the bud­get bat­tles of the last four years. Con­ser­va­tives threat­en­ing gov­ern­ment shut­downs and de­faults forced dis­cre­tionary spend­ing lev­els down to lev­els not seen since early last cen­tury — ham­per­ing the eco­nomic re­cov­ery — and yet the debt con­tin­ues to rise.

That’s be­cause of the cow­ardice of lead­ers on both sides, who have avoided se­ri­ous changes to the tax code and to Medi­care and the other “manda­tory” spend­ing pro­grams that are the real prob­lems. Pres­i­dent Obama, in his news con­fer­ence Thurs­day af­ter­noon, made no men­tion of this as he cited re­cent ev­i­dence of growth. “Over the past four-and-ahalf years, our busi­nesses have now cre­ated nearly 10 mil­lion new jobs,” he said, “so there are rea­sons to feel good about the di­rec­tion we’re headed.”

He’s cor­rect — if you only care about the next three years. The CBO fore­cast that deficits would con­tinue to shrink over the next few years, as the econ­omy, after a long de­lay, fi­nally be­gins to reach its po­ten­tial. But after 2018, deficits are fore­cast to rise again as baby boomers re­tire and re­quire new spend­ing on en­ti­tle­ment pro­grams. Medi­care’s trus­tees re­ported last month that the pro­gram would be­come in­sol­vent in 2030 (slightly bet­ter than ear­lier forecasts, in part be­cause of mod­est im­prove­ments made by Oba­macare) and So­cial Se­cu­rity would run into trou­ble a few years later.

This, then, should be the real ice-bucket chal­lenge. Wash­ing­ton has just a few years un­til deficits swell again and any changes to th­ese pro­grams be­come much more painful. Then it won’t be a brac­ing splash of ice wa­ter, but a deep and deadly freeze.

Follow Dana Mil­bank on Twit­ter, @Mil­bank.

DANA MIL­BANK

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