This is a chart from CBO’s new outlook report. Note that deficits get down to the 2 1/2 to 3 percent of GDP range within five years. Note that revenues rise and spending falls, but that revenues do most of the heavy lifting (5 percent of GDP out of the 7 percent of GDP reduction in the deficit). Note that this assumes CBO’s “current law baseline” where tax cuts expire as written in current law. Hold that thought.
[**UPDATE 6 pm Tuesday: Here's Concord's press release reacting to the CBO report. More to say tomorrow, but here's the one-minute version: to get to sustainability, within the first five years it's all about revenue policy and avoiding the deficit-financed extension of tax cuts, and beyond that (but still, ideally sooner rather than later), we'll have to figure out how to bend that darned health cost curve, because even with a reformed tax system, we won't be able to keep up with health spending on its current path.]