CBO Director Doug Elmendorf’s presentation to the National Association for Business Economics offered the following four observations (bolded for emphasis):
1. The gap between spending and revenues is likely to remain very large even after we return to normal economic conditions.
2. Fiscal policy cannot be put on a sustainable path just by eliminating waste and inefficiency; the policy changes that are needed will significantly affect popular programs or people’s tax payments or both.
3. Policymakers face difficult tradeoffs in deciding how quickly to implement policy changes that would reduce future budget deficits.
4. There is more focus in Washington on federal budget problems today than there has been since the late 1990s, and that focus has led to a range of proposals for tackling the problems.
To see complete presentation of Elmendorf’s: http://www.cbo.gov/ftpdocs/120xx/doc12087/CBO_Presentation_to_NABE_3-7-11.pdf