Choices for Federal Spending and Taxes

Although weakness in the U.S. economy is an important factor in current federal budget deficits, even robust growth will leave unsustainable deficits unless there are major changes in federal policies. Moreover, deficits cannot be eliminated by reversion to past tax and spending policies. This paper explores the causes and magnitudes of the projected deficits and the choices that must be faced for the federal budget to regain a sustainable path.