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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DizzyG who wrote (514567)	12/22/2003 2:44:39 PM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 769667

The Republican controlled CBO agrees with me. Read this: CBO: Debt levels are long-term worry Entitlement spending will be major burden By William L. Watts, CBS.MarketWatch.com Last Update: 2:07 PM ET Dec. 22, 2003 WASHINGTON (CBS.MW) -- Rising health-care costs will force the federal government to substantially raise taxes or make deep cuts in Social Security, Medicare and Medicaid entitlement spending -- or both, in coming years, congressional budget watchers warned in a new report. "Unless taxation reaches levels that are unprecedented in the United States, current spending policies will probably be financially unsustainable over the next 50 years," the report by the nonpartisan Congressional Budget Office predicted. "An ever-growing burden of federal debt held by the public would have a corrosive and potentially contractionary effect on the economy," the CBO warned. Rapidly rising health costs and the upcoming retirement of the baby-boom generation are the key factors behind the gloomy outlook. Spending on Social Security, Medicare and Medicaid are set to claim a "sharply increasing share" of the nation's economic output in coming decades. The report found that fiscal policy could be financially sustainable if the rise in health-care costs "slowed significantly" from historical rates but that tax revenues would still probably need to rise to higher levels than seen in the past. As the U.S. tax system is currently configured, revenues will increase as a share of gross domestic product, and the higher rates will have "detrimental consequences for work, saving and economic growth," the report said. However, if taxation is held to historical levels, the growth of entitlement spending will have to be sharply curtailed. Cuts elsewhere -- defense, education, transportation and other discretionary programs -- wouldn't be enough to ensure "fiscal sustainability," the report warned. Meanwhile, there's no prospect of growing the economy out of the predicament, the CBO warned. "Economic growth alone is unlikely to bring the nation's long-term fiscal position into balance. Moreover, issuing ever-larger amounts of debt or dramatically raising tax rates could significantly reduce growth," the CBO report said.