The United States is roughly $17 trillion in debt, but President Barack Obama says there’s no reason to worry. Speaking with ABC News correspondent George Stephanopoulos this week, Pres. Obama downplayed concerns of an impending financial catastrophe, claiming quite to the contrary that the country is on track to turning the economy around.
“We don’t have an immediate crisis in terms of debt,” Pres. Obama told Mr. Stephanopoulos during an interview that aired Wednesday on the television program Good Morning America. “In fact,” added the president, “for the next 10 years, it’s gonna be in a sustainable place.” Others aren’t so sure.
Pres. Obama’s claim is indeed an optimistic one, but is it all that accurate? For starters, the Congressional Budget Office admits that, yes, the deficit may be slightly less in the coming months than what we’ve seen throughout the Obama administration so far, but in ten years’ time things aren’t likely to shape up all that wonderfully. The CBO projects a deficit of $845 billion — a fantastic figure when compared with the deficits exceeding $1 trillion that have occurred since Pres. Obama took office — but the size of that sum won’t be shrinking for long. The CBO expects the deficit to take an upward turn again as soon as 2015, with a total of $7 trillion expected to be added to the national debt during the next decade.
Erskine Bowles and Alan Simpson, the two economists behind the National Commission on Fiscal Responsibility and Reform, or Bowles-Simpson Act, say that recent disagreements between parties in Washington suggest Democrats and Republicans will be unlikely to iron out a deal this year that will help diminish the debt. Although Pres. Obama seems optimistic about the economic future — even when accounting for rampant bipartisan bickering — others aren’t so sure.
“They haven’t done any of the tough stuff, any of the important stuff,” Bowles told ABC News’ Jonathan Karl last month. “They haven’t reformed the tax code…they haven’t done anything to slow the rate of health care, to the rate of growth of the economy, they haven’t made Social Security sustainably solvent. There’s about $2.4 trillion more of hard work we’ve gotta do.”
Pres. Obama told Mr. Stephanopoulos that that’s a good start, though, and said this week’s that it’s “important to recognize is that we’ve already cut $2.5- $2.7 trillion out of the deficit.”
“If the sequester stays in, you’ve got over $3.5 trillion of deficit reduction already,” added the president.
The president’s statement is one that assumes the best — that the sequester budget cuts will continue as scheduled and the economy will turn itself around in only a matter of a few years. Republicans and Democrats will get along during further financial debates and a national emergency won’t empty out America’s bank account.
Adding to ABC, Alan Simpson isn’t sure things will work out as the president plans.
“Ten thousand [Americans] a day are turning 65,” he told the network. “This is madness. And life expectancy is 78.1, and in five years will be 80. Who is kidding who? This will eat a hole through America.”
As more Americans reach an age where government-paid entitlements kick in, welfare programs will increasingly dry out what’s left of the country’s checkbooks. Republicans by-and-large want to see yet more cuts to social welfare programs, but that’s something that the president says his allies are unlikely to agree with.
“Ultimately, it may be that the differences are just too wide,” Mr. Obama told Stephanopoulos this week. “It may be that, ideologically, if their position is, ‘We can’t do any revenue,’ or, ‘We can only do revenue if we gut Medicare or gut Social Security or gut Medicaid,’ if that’s the position, then we’re probably not going to be able to get a deal.”
And what happens then? “That won’t … create a crisis,” the president told ABC. ”It just means that we will have missed an opportunity. I think that opportunity is there and I’m going to make sure that they know that I’m prepared to work with them. But, ultimately, it may be better if some Democratic and Republican Senators work together.”
Should both sides of the aisle come together to reach an agreement regarding spending plans, Pres. Obama’s prophecy of a sustainable economy in ten years’ time may very well come true. In order for that to happen, though, long-time opponents will have to put differences aside and agree on a package that Democrats and Republicans alike will favor. If history is any precedent, such an outcome is all too unlikely.
“How likely is that?” senior Obama adviser Dan Pfeiffer asks the New York Times. “I can’t say very likely — there are strong structural forces in the Republican Party working against it. But if you try and fail you still have an opportunity to build bonds of trust that could be helpful on other issues.”
Rep. Paul Ryan (R-Wisconsin), the one-time vice presidential candidate and current chairman of the House Budget Committee, says his Republican Party is working on a federal spending plan that could save the country $5 trillion during the next decade, but in doing so the president will have to forfeit his hallmark health care law, something all but certain to fail. For now, though, Rep. Ryan says he is open to negotiations.
“I think there are things that we can do that don’t offend either party’s philosophy,” Rep. Ryan told Fox News over the weekend.
Meanwhile, even White House press secretary Jay Carney isn’t as optimistic as his boss. During a media briefing on Wednesday, Mr. Carney admitted that “everybody” recognizes there is a “long-term debt challenge.” The president, however, just won’t call it a crisis.