According to the New York Times, the new set of budget projections from the Congressional Budget Office (CBO) prompted North Dakota Senator Kent Conrad "to declare that a short-term stimulus package was insufficient." The article then explains that Conrad wants to address the costs of the baby boomers' retirement, presumably by cutting Medicare and Social Security. Is it really true that CBO's worsening outlook "prompted" Senator Conrad's new concern about the cost of paying for the baby boomer's retirement? That claim seems unlikely. The new projections from CBO did show a somewhat worse story for 2008 and 2009, but they actually show a slightly better picture for CBO's ten-year projection period, which is presumably what would matter for programs like Medicare and Social Security. For the years from 2007-2017 (the overlapping period between the last forecast and the newest set of projections), CBO actually lowered its cumulative projected deficit slightly from $501 billion to $331 billion. While this improvement is only equal to about 0.1 percent of projected GDP over this period, the direction of change is positive, not negative. This means that it is implausible that worse projections prompted Senator Conrad's interest in cutting Medicare and Social Security. He either is unfamiliar with the actual projections or was not being honest. The NYT should have pointed this fact out to its readers.
--Dean Baker
