Almost two decades after Ross Perot put his poster-sized charts on national TV, the federal deficit is becoming a political issue again. Republicans and conservative advocacy groups are trumpeting the latest projections from the White House Office of Management and Budget, which predict that Washington will run up $9 trillion in deficits over the coming decade, almost doubling the national debt. The Congressional Budget Office predicted that the debt, which amounted to less than 60% of U.S. economic output in 2000, would be more than 100% of GDP by 2023.
President Obama's critics naturally want to blame the geyser of red ink on the grand ambitions of his administration, including the $787-billion stimulus package and expensive new health insurance subsidies. Longtime budget analysts, however, have seen this problem coming for years, even decades. They cite two primary factors: healthcare costs that have been growing faster than the economy since the birth of Medicare and Medicaid, and the looming conversion of a generation of wage-earning baby boomers into Social Security beneficiaries. The administration and the Democratic majorities in Congress have made matters worse by proposing to boost spending on their top domestic priorities more than they would cut the rest of the budget. But those increases are small in comparison to the growth in existing entitlements.
