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Wall Street Journal: Heading Off the Entitlement Meltdown

By Sen. Rob Portman | July 21, 2014

This year's budget deficit of "only" $500 billion has brought some complacency on federal spending and deficits. It shouldn't. The Congressional Budget Office's long-term budget outlook released on July 15 shows a $40 trillion increase in debt over the next two decades.

This year's budget deficit of "only" $500 billion has brought some complacency on federal spending and deficits. It shouldn't. The Congressional Budget Office's long-term budget outlook released on July 15 shows a $40 trillion increase in debt over the next two decades.

While a $500 billion deficit is welcome compared with the $1.4 trillion peak in 2009, the decline is temporary. The CBO's other, more realistic "alternative baseline," which assumes Congress continues current policies, projects new debt of $10 trillion over the next decade, followed by $100 trillion over the subsequent two decades. Consequently, the CBO simply stops calculating the national debt after 36 years. Apparently its models cannot conceive of a functioning economy.

First, get the economy moving. During this weakest economic recovery since the 1940s, three people have abandoned the workforce for every net job created. As long as the economy continues to perform $700 billion below its optimal level, with falling incomes and millions more jobless, there will be less income to tax. Economic growth not only creates jobs and raises incomes, it also adds tax revenue.

Second, the government must avoid large tax increases. Drowning our children in taxes is no better than drowning them in debt to pay our retirement benefits.

Third, reform Social Security and health entitlements. The CBO estimates that a deal saving $4 trillion over the decade would put the budget on a path to sustainability. Adjusting Social Security and Medicare's retirement ages, means-testing benefits for upper-income retirees, and supporting broad-based, patient-centered health care can not only help close the debt, it can also create a stronger economy.

Today's declining deficit is temporary, and the longer we wait to enact reforms, the more abrupt and painful they will be. It is time for everyone to come together and start to erase the red ink.

Read more at, Wall Street Journal online: http://online.wsj.com/articles/rob-portman-heading-off-the-entitlement-meltdown-1405983479

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