I hope to be chairman of the Budget Committee next year, but if not, I will serve for three terms on Budget, the allotted time, and return to Government Operations and a seat of Armed Services that is about two seats from the chair. The budget is in surplus for the first time in 30 years, which is something to savor. Until we have taken these Social Security surpluses and made Social Security assuredly solvent for the next 50-75 years, we should not have massive tax cuts. The first priority should be to save Social Security and then to save Medicare, and one way to do both is simply to pay off debt. OMB has been more optimistic and in recent years more on the mark because it too was burned by supply side forecasts in the 1980s that never materialized.
Forecasting is a precarious art.
I think that CBO and OMB are both trying to do an earnest, honest job of it. Over the last two years, the major question overhanging the forecast has related to revenues. Revenues have been growing 8-10 percent, faster than the economy has grown, and CBO has been cautious and even skeptical about the continuation of revenue growth. In each year, toward the end of the year, they have revised upward their estimate because the revenues have kept flowing in. But the precarious nature of these forecast should make all of us cautious about massive tax cuts until we have a much better handle on the revenue forecast.