Yesterday, President Obama characterized reducing the debt as one of his “projects” for the next couple of years. Go figure. Given the action he’s taken during the first year and a half of his Administration, one might have safely assumed that increasing the debt was his project.

Meanwhile, the Congressional Budget Office has just released a new report on the long-term budget outlook, warning that previous debt estimates are likely understated since they don’t take into account how growing debt burdens will affect the economy. The CBO writes:

Large budget deficits would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment-which in turn would lower income growth in the United States.

Growing debt would also reduce lawmakers’ ability to respond to economic downturns and other challenges.

Over time, higher debt would increase the probability of a fiscal crisis in which investors would lose confidence in the government’s ability to manage its budget, and the government would be forced to pay much more to borrow money.

This would all suggest that cutting the deficit and the long-term debt should be an immediate, pressing priority. The President instead wants to kick this can down the road, encourages other countries to join us in another spend-a-thon (they aren’t buy it), and pushes laws (like the health care law) that increase our government’s long-term obligations.

We’re supposed to take comfort that the President has wisely called together a commission to examine this problem and suggest solutions. The hope is that the commission will be able to provide the politicians enough political cover to actually do something about the deficit. Don’t hold your breath, with this Congress at least.

At least the Commission is soliciting some interesting testimony.  Yesterday, our friend and Mercatus scholar Veronique De Rugy testified. Her entire testimony is worth reading, but here’s one of her key arguments:

… the United States has a spending problem. Data from the Congressional Budget Office (CBO) indicate an exponential increase in spending over the next 50 years. While certain tax increases could bring in new revenue, the amount of tax revenue needed to address the budget shortfall would require such high tax rates that those rates would quickly reach the point of diminishing marginal returns and fall far short of filling the budgetary gap. What’s more, those high tax rates would paralyze our economy along the way. If the Commission wishes to forestall financial catastrophe, it must recommend that the U.S. government cut spending.

It’s really not all that complicated: The government needs to cut spending. The specifics will be difficult and contentious, but that’s the bottom line. And that means we need leaders who are up to the challenge…unfortunately, it seems like much of the current crop in Washington is not.