CBO: Obama Budget Will Reduce Deficits

The Congressional Budget Office is out with its score of the president’s proposed budget (dead on arrival in the House of Representatives, naturally), and it does exactly what a budget should, making the deficit larger in the short term but smaller in the medium term relative to the current law baseline*.

Doing this would not eliminate the long-term economic challenges of population aging and federal responsibility for health care needs, but it would leave us with a budget deficit that’s clearly sustainable—quite a bit smaller than the nominal growth rate of the economy, and with the debt burden shrinking.

* Update, May 20, 2013: This sentence has been modified to clarify that the Obama administration’s proposals shift in the deficit is relative to the baseline. Both Obama’s proposal and the baseline scenario involve a deficit that shrinks and then grows.