Sen. Kent Conrad (D-SD) must be getting bored. He's been having hearings on long-term fiscal issues, but pretty much every speaker has been saying the exact same thing: there's huge problems in Social Security, Medicare, and Medicaid, so we better start cutting benefits, and maybe find a way to raise revenues.

Now I'm not going to go through all the reasons I think this way of identifying the problem and the stark set of options to address it is too narrow and deeply flawed. I'd just ask, has this formulation risen above the level of argument? Are they now the unassailable truth? Have these budget projections become budget prophecy?

Seriously, is there no respectable opinion that dissents, that thinks there's a better way to address long-term fiscal issues?

Of course, there are others. They should get a hearing, too. I mean, you've got to be bored silly by now, Sen. Conrad. Shake things up a little.

The Center on Budget and Policy Priorities has an big-time paper out on entitlement costs and the budget, where they both move forward the debate over future fiscal problems, and move it back.

Laudably, they dispel the myth that there is an "entitlement" crisis. Many entitlement programs are actually going down in costs and getting more efficient. Just because the program is an entitlement doesn't mean it's got problems.

But they then go on to include Social Security among the entitlement programs that are in crisis. That's misleading. A fiscal crisis is when costs are rising much faster than revenues can keep up. CBPP accurately makes the distinction that health care costs are projected to rise much faster than social security costs. But it fails to make the crucial distinction that built-in revenues will not keep up with health care costs, but will keep up with social security for at least the next 40 years. That's not a crisis in my book.

The report then states clearly that increased health care costs, irrespective of demographics, is the main driver of future fiscal problems. Great! But then they go on to downplay how much inefficiencies within the health care system have driven up costs across the public and private sector. Rather, they argue, innovations in heath care provision, and patient demand for these new goods and services, account for the rate of growth in health care costs, both in government programs and in the private sector.

Kudos to CBPP for recognizing the systemic nature of the problem, and for dispelling the myth that demographics are mostly or even solely to blame. Still, this analysis has the same-old, wrong-headed, focus on trade-offs. It suggests that the nation must deal with a dilemma: do we want more health care or less health care? More health care or less of something else? And it suggests inevitability: we can't avoid these hard choices. And it ultimately suggests that costs are too high to pay for all the health care we might want: we'll have to make cuts somewhere, because if we don't, it'll mean a reduction in living standards somewhere else.

I feel like I've heard that one before. It's pretty much the same old story about entitlement programs, isn't it?

CBPP still isn't thinking about this stuff the right way. Health care provision, for all intents and purposes, is not just a zero-sum game. The alternative here is to focus on creating a more efficient health care system.

In other words, let's talk about the elephant in the room: universal health care and its power to contain costs. In the spirit of bi-partisan, high-minded, wonk-style fairness, shouldn't we have a conversation about it, too?

The House and Senate Budget Committees have published succinct rejoinders to the CBO reported we blogged on here, providing warnings about the misleading, thought favorable, short-term deficit projection against the backdrop of the long term fiscal condition of the nation.

My colleague Craig commends in particular this (Page 5 of the House document (Realistic Estimate Shows Bleak Deficit Outlook), graphic depiction of the distorted long term-picture painted by the Bush Administration.

We note that the CBO is under legal constraints not to reflect that picture itself, for a variety of debatable reasons.

House: CBO Forecasts Continued Fiscal Deterioration

Senate : CBO Budget Outlook Shows Deteriorating Long-Term Picture Remains Unchanged

With release of CBO's latest budget projection comes the latest edition of Tales from the OMB. OMB Director Rob Portman released this statement regarding CBO's projection of coming surpluses (more on that later, but I want to debunk this bit that really sticks in my craw):

Two years ago the President laid out an ambitious goal to cut the deficit in half by 2009, and we met that goal three years early.

This is, of course, remarkably similar to this week's episode of Presidential Budget Story Time, as encapsulated by this line in the president's SOTU speech:

We set a goal of cutting the deficit in half by 2009, and met that goal three years ahead of schedule.

As we've mentioned before, the president has not, in fact, cut the deficit in half. On this point, he is misleading his audience - the American people - about the real-world federal budget situation. I don't think President Bush nor the OMB is going to stop propagating this mischaracterization, but it's important to point this out when they do, if only to take advantage of an educational moment on the differences between OMB-projected deficits and deficits that actually materialized.

CBO's The Budget and Economic Outlook: Fiscal Years 2008 to 2017 is now available.

Peter Orszag has been officially appointed to direct the Congressional Budget Office (CB0). See this press release for more.

GAO Chief David M. Walker plays budget Cassandra in a report to the Senate Budget Committee today. You can read the report here

Robert Samuelson bashes his generation in today’s Washington Post:

Shame on us [baby boomers]. We are trying to rob our children and grandchildren, putting the country's future at risk in the process. On one of the great issues of our time, the social and economic costs of our retirement, we have adopted a policy of selfish silence.

*Sigh* What is Samuelson so exercised about? He’s huffing and puffing over something that may or may not happen 33 years from now.

Here’s the thing about Social Security: There’s nothing wrong with Social Security; it does not need to be fixed. The 2006 Social Security Trustees report indicates that in 2040, Social Security benefit payouts may have to be reduced by 26%. That’s it. That’s the "great issue of our time."

Here’s the text from the report:

Despite these cash-flow deficits, beginning in 2017, redemption of trust fund assets will allow continuation of full benefit payments on a timely basis until 2040, when the trust funds will become exhausted. This redemption process will require a flow of cash from the General Fund of the Treasury. Pressures on the Federal Budget will thus emerge well before 2040. Even if a trust fund’s assets are exhausted, however, tax income will continue to flow into the fund. Present tax rates would be sufficient to pay 74 percent of scheduled benefits after trust fund exhaustion in 2040 and 70 percent of scheduled benefits in 2080.

Samuelson also engages in the classic scare tactics of Social Security haters - lumping Medicare in with Social Security to create the illusion that there’s one really big program that costs unimaginable sums, hand-waving about soul-crushing tax increases, and citing population and budget figures without context or caveat.

Shame on Samuelson for using precious column inches to raise holy hell about such a non-problem when he could be addressing real issues.

CBO has released the budget numbers for the first quarter of fiscal year 2007. The deficit was $85 billion, $35 billion less than the first quarter of last fiscal year.

Temporary events, not structural factors, mostly explain the difference between this year and last. Hurricane Katrina drove up federal spending last year, and record corporate profits and big gains for high-earners have been pushing up revenues this year, though most analysts expect that surge to end soon.

House Budget Chairman Rep. John Spratt (D-SC) commented on the news in CQ ($).

“While any report of short-term improvement in the deficit is welcome, the long-term forecast for the federal government’s budget deficit remains troubling,” said House Budget Chairman John M. Spratt Jr., D-S.C.

Spratt added, “We must not underestimate the size of the challenge that lies ahead.”

President Bush has fired the opening shot of the 2007 budget battle, writing an op-ed in today's WSJ. The piece is mostly PR, which is an encouraging sign that the President is more interested in repairing his image than pursuing harmful policy. Substance-wise, the President is not asking for much more than the continuation of the status quo.

Some notable budgetary policies and goals mentioned in the op-ed:

• No new taxes:
  "Now is not the time to raise taxes on the American people."
• A balanced budget by 2012:
  "By continuing these policies, we can balance the federal budget by 2012 while funding our priorities and making the tax cuts permanent. In early February, I will submit a budget that does exactly that."
• An vague reference to entitlement cuts as a way to balance the budget:
  "By balancing the budget through pro-growth economic policies and spending restraint, we are better positioned to tackle the longer term fiscal challenge facing our country: reforming entitlements -- Social Security, Medicare and Medicaid -- so future generations can benefit from these vital programs without bankrupting our country."
• Legislative process changes and a line-item veto:
  "It's time Congress give the president a line-item veto. And today I will announce my own proposal to end this dead-of-the-night process and substantially cut the earmarks passed each year."