Transcripts

"Commentary"-Presidential Challenges

SUSIE GHARIB: Tonight's commentator predicts tremendous challenges for the next U.S. president. She's Alice Rivlin, senior fellow at Brookings and former vice chair of the Federal Reserve.

ALICE RIVLIN, SENIOR FELLOW, BROOKINGS: Reading the president's new budget made me wonder whether the presidential candidates realize how deep a hole they are vying to step into. Even without a recession, the Federal deficit will be more than $500 billion by January 2009. President Bush projects a mere $400 billion, but he leaves out the on-going spending needed in Iraq and Afghanistan and assumes totally unrealistic cutbacks in domestic spending.

With even a mild recession, the debt increase will mount. The new president's initiatives will be constrained by the excessive borrowing of the last eight years and the world's eroding confidence in the dollar. But by far the toughest budget challenge for the next president is that promises already made under Medicare, Medicaid and Social Security cost more than we can afford.

The new administration and Congress must take those programs off auto pilot. They must decide what benefits to retain and how to raise the money. Otherwise, their only choices are to endanger the future by slashing funding for research, education and infrastructure, passing impossible debts to future tax payers or raising taxes to unprecedented levels that are sure to slow economic growth. When the band stops playing and the confetti is on the floor, the next president will be walking into an agonizing budget dilemma job. I'm Alice Rivlin.