The Future Deficit Can Inherently Exists In The Future

Kicking the can down the road is generally understood to be a bad thing. But it's crucial to note that in the context of discussion of America's long-term structural deficit, the can in question inherently exists in the future. It's true that politicians can decide in 2011 to cut Medicare spending in 2017. But the 2017 deficit exists in 2017. In the future. And what the deficit in 2017 actually is will inherently be decided by politicians in 2016 and 2017 rather than politicians in 2011.

This is one reason why I always think it's worth reminding people that if congress doesn't do anything, the median-term problem goes away. Current law stipulates that, thanks to the expiration of the Bush tax cuts, the non-indexation of the Alternative Minimim Tax, and the implementation of Sustainable Growth Rate adjustments to Medicare doctor payments, the budget will go back into balance. The Congressional Budget Office also produces a "current policy" baseline, which reflects the fact that politicians are unlikely to allow those things to happen. I don't dispute their judgment. But all that changing current law can do is change what current law says about the future. And currently, current law already says the fiscal gap will close. People think it won't close because they think the law will be changed. And they may be right. But that same problem occurs no matter what you do.

Recall that in 2000, we were projected to have budget surpluses, and this fact became a key argument for the Bush tax cuts.