Economist: ‘After 2016, All You See Is Unending Red Ink’
(CNSNews.com) – Douglas Holtz-Eakin, the former head of the President’s Council of Economic Advisers, says that if Republicans and Democrats can’t agree on a budget with significant spending cuts, “spending just keeps going up in an uninterrupted fashion as far as the eye can see. By 2016, all you can see is unending red ink.”
He added that he has little confidence that the congressional budget committee meeting officially for just the second time on Wednesday will be able to agree on a budget for the rest of the fiscal year that puts the federal government on an economically sustainable course by the December 13th deadline.
“I don’t think they will come to an agreement. They’re very far apart - $100 billion- on discretionary spending,” Holtz-Eakin, now president of the American Action Forum (AAF), told CNSNews.com. Earlier this year, the Senate passed its first budget in four years, but it's $91 billion higher than the House version.
Members of the 29-member budget committee, headed by House Republican Paul Ryan (R-Wis.) and Senate Democrat Patty Murray (D-Wash.), have exactly one month to reconcile their differences on how much the federal government should spend on discretionary items. But Holtz-Eakin doesn’t think that’s enough time, given the fact the two chambers have been unable to iron out their major differences thus far.
The federal government is currently being funded under a temporary continuing resolution (CR) passed by both houses of Congress which expires on Jan. 15, 2014.
When CNSNews. com asked him what will happen when the CR expires in two months, Holtz-Eakin replied: “I would suspect that the House will pass another continuing resolution to keep funding the government at the lower level of the Budget Control Act of 2011 (also known as the sequester) with an additional $20 billion in defense spending. The Senate will have to decide if they can live with that.
“My best guess is that overall discretionary spending will be reduced to levels no one likes while entitlements such as Obamacare, Medicare, Medicaid and Social Security continue to grow on autopilot,” he added. But at the end of the day, “we’ll spend more,” he predicts.
Holtz-Eakin has posted a trio of short videos on YouTube explaining how cutting spending is the only solution to the nation’s economic problems, how the explosive growth of mandatory spending is crowding out other budget priorities, and how too much debt will eventually destroy the U.S. economy