CBO Deficit Outlook 'Gloomy'

CBO Deputy Director James Blum Wednesday told the Senate Budget Committee that while the agency's annual report due out next week will show improvement in the short-term deficit outlook, "current budget policy is unsustainable" in the long term because of escalating entitlement costs.

At a hearing on the long-term budget outlook, Blum said the "CBO's preliminary analysis suggests that the improved short-term [budget and deficit] outlook would not eliminate the long-term imbalances in the federal budget," meaning that past CBO warnings of a future deficit explosion early in the next century if nothing is done remain valid.

He said "the outlook for the deficit is gloomy" after the post-war baby boom generation retires, dramatically hiking the costs of federal retirement and medical programs.

It also was announced Wednesday that OMB Deputy Director Jack Lew will testify for the administration at the Budget Committee's hearing today on Medicare and the budget.

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