EPI explains why the deficit has increased since March 2007: It's the economy, stupid. But cutting deficits now isn't a good idea:Both the CBO and the OMB show deficits falling to more sustainable levels at the end of the 10-year horizon. Key to achieving this goal, however, is a robust economic recovery. A focus on near-term deficit reduction—through higher taxes or reduced spending—would choke-off the recovery and in the end would be self-defeating.But the long-term deficits are not sustainable. Ezra already wrote about yesterday's budget call with Stan Collender, who argued that some kind of action on the budget is inevitable, but I think Matt's rejoinder is right: it's going to be pretty easy for politicians to avoid making hard choices; in fact, it's what they do best. The politics of budget reduction are going to be insane compared to health care reform. But Collender did make the very good point that "you cannot take the politics out of a fight that is inherently political," which is to say plans for independent commissions or fancy summits are probably out of the question, simply because "processes don't work unless you have a consensus to deal with what the process should do, and that just doesn't exist." This is going to require some hard-nosed leadership from the president, and it's becoming pretty clear that hunting for bipartisanship isn't going to be very effective.
-- Tim Fernholz
