Congressional Budget Office director Douglas Elmendorf is confident that the CBO forecast about health care reform and the deficit is true. But he acknowledges tough deficit choices ahead.
In the wake of healthcare reform, Douglas Elmendorf hopes to make fewer headlines in the coming year.
As director of the nonpartisan Congressional Budget Office (CBO), Mr. Elmendorf sat in the eye of the storm as he and his staff estimated the costs of the various health reform plans put before them and projected their impact on the budget deficit.
But as talk now turns to how – and when – to address the sea of red ink the United States faces, Elmendorf’s views are still very much in demand.
“I don’t do ‘should,’ ” Elmendorf told reporters at a Monitor breakfast Thursday, meaning in his current role he cannot offer prescriptions for tackling record budget deficits.
But Elmendorf did stand by the CBO's assertion that the healthcare reform package would reduce the budget deficit over the next 10 years – and in the 10 years after – and acknowledged Washington’s challenge in the choices it faces over taxes and spending.
“There are trade-offs,” he said. “The biggest challenge that fiscal policy poses to macroeconomic stability in the next few years is actually the rate at which fiscal stimulus declines.”
Elmendorf says he expects the budget deficit this year to be about 10 percent of gross domestic product. If the 2001 and 2003 tax cuts passed under President Bush are not extended, the deficit would fall from 10 percent of GDP this fiscal year to 4 percent in FY 2012.