CBO Releases Report On Economy, Federal Budget

Aug 24, 2011
Originally published on August 24, 2011 6:41 pm
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ROBERT SIEGEL, Host:

This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

MELISSA BLOCK, Host:

NPR's Andrea Seabrook reports on the new numbers and what they mean.

ANDREA SEABROOK: The director of the Congressional Budget Office is Doug Elmendorf. He was upbeat at times today talking to reporters in a CBO conference room. He said the debt ceiling deal lawmakers made before their August recess made a real difference, cutting more than $2 trillion from future deficits.

DOUGLAS ELMENDORF: That is a very substantial amount of money, even by the standards of the current federal budget.

SEABROOK: So the big picture looks a little better, says Elmendorf, but look a little closer and...

ELMENDORF: A great deal of the pain of this economic downturn still lies ahead of us.

SEABROOK: A big part of the problem, he says, is that having the economy set on idle or very slow growth is a waste. The U.S. economy is huge, Elmendorf says, and could be producing a lot more than it is. Economists call this a loss in economic output.

ELMENDORF: Moreover, those losses are not shared evenly. They are borne very disproportionately by people who lose their jobs or have businesses fail or are thrown out of their homes.

SEABROOK: Elmendorf says Congress could reverse those things by cutting taxes or increasing spending in some areas, but making the economy hurt less now could make the deficit worse later. Sounds strange, Elmendorf admits, but...

ELMENDORF: It's not really a paradox. All it is reflecting is that economic policy by the government has different effects under different economic conditions.

SEABROOK: Andrea Seabrook, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.