WASHINGTON — Despite constant budget wrangling and finger-pointing by the nation’s policy-makers, the government’s short-term fiscal outlook isn’t all that bad. It’s actually getting better — at least for now.
Washington is borrowing about 25 cents for every dollar it spends, down from over 40 cents just a few years ago.
The federal budget deficit will drop to $845 billion this year after topping $1 trillion for four straight years, the nonpartisan Congressional Budget Office projects.
Even if Congress does nothing further to cut spending or raise tax revenues, deficits will continue to shrink — to $430 billion by fiscal 2015, the CBO said.
But, barring a major fix by the president and Congress, the government’s finances will start to worsen again as the three major entitlement programs — Social Security, Medicare and Medicaid — become more expensive and unmanageable under the increasing weight of retiring baby boomers.
Recent budget improvements were helped along by increasing tax revenues as corporate America and many better-off Americans snapped back from the economic downturn and paid more in taxes. But unemployment is still a high 7.7 percent nearly four years after the worst recession since the Great Depression officially ended, still far above the pre-recession levels of around 5 percent.