To cure the deficit, do nothing

The Congressional Budget Office points out (again) that if we do nothing at all, the budget deficit will cure itself. Here's how Ezra Klein puts it.

If Congress lets the Bush tax cuts expire or offsets their extension, implements the Affordable Care Act as scheduled and makes or offset the Medicare cuts prescribed by the 1997 Balanced Budget Act — which CBO calls the “extended baseline scenario” — the national debt will be totally manageable.

If Congress passes laws extending the Bush tax cuts without offsetting the cost, repealing the Affordable Care Act and its cost controls and protecting doctors from Medicare cuts without making up the savings elsewhere — the “alternative fiscal scenario” — the national debt will be totally out of control:

Brad DeLong adds a comment.

Indeed.

If Obama were to pledge--and get everybody running for his seat to pledge--not to sign any bill that breaks PAYGO, we don't have a long-run deficit problem. If the majority and minority leaders of the Senate and their successors pledge not to let anything move through the Senate that breaks PAYGO, we don't have a long-run deficit problem. If the Speaker of the House and his successors pledge not to let anything move through the House that breaks PAYGO, we don't have a long-run deficit problem.

It boggles my mind why Barack Obama did not, on January 21, 2009, promise to veto everything that broke ten-year PAYGO. I am morally certain that this is what Peter Orszag told him to do. I am morally certain that this is what Jack Lew is telling him to do.

What a disappointment …

PAYGO is pay as you go, the policy adopted a couple of decades ago to tame the deficit. It worked then, and it could work now.