GAO report: US on ‘unsustainable long-term fiscal path’

Discussion in 'News / Current Events' started by Revmitchell, Dec 3, 2012.

  1. Revmitchell

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    Feb 18, 2006
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    The Government Accountability Office warned in a report Monday that if cuts are not made to mandatory spending — including Social Security and Medicare — there will be a fundamental gap between spending and revenue as more baby boomers retire.

    “Significant actions to change the long-term fiscal path must be taken,” the GAO warned.

    The report was released amid heated debates between the president and congressional Republicans trying to hammer out a deal over taxes and spending. If no deal is reached, taxes go up and major spending is cut.

    The GAO warned that discretionary spending is not the crux of the problem. “Discretionary spending limits [which includes defense spending] alone do not address the fundamental imbalance between estimated revenue and spending, which is driven largely by the aging of the population and rising health care costs.”

    While allowing the drastic fiscal tightening to occur will probably result in a disruption in economic growth, avoiding the cliff ”would lead to higher debt over the long term.”

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