It is easy to lose sight of the reasons why deficit reduction is desirable. Fortunately, however, the media does its job from time to time, and reminds us:
The Senate on Tuesday rejected a plan backed by President Barack Obama to create a bipartisan task force to tackle the federal deficit this year, despite glaring new figures showing the enormity of the red-ink threat.
The special deficit panel would have attempted to produce a plan combining tax cuts and spending curbs to be voted on after the November elections. The measure went down because anti-tax Republicans joined in opposition with Democrats wary of being railroaded into cutting Social Security and Medicare.
The vote to kill the deficit task force came hours after the nonpartisan Congressional Budget Office predicted a $1.35 trillion deficit for this year as the economy continues to slowly recover from the recession.
“Yet another indication that Congress is more concerned with the next election than the next generation,” said Sen. Judd Gregg, R-N.H., a sponsor of the plan.
The budget deficits facing Obama and Congress are large and intractable, and the CBO’s new deficit prediction is roughly equal to last year’s record $1.4 trillion ocean of red ink. That means the government is borrowing to cover 40 percent of the cost of its programs.
Economists say sustained high deficits would force interest rates higher and “crowd out” private investment — and could have severe implications for the value of the dollar.
Let that linger in your minds for a while.