Summers: Deficits ‘Likely to End up Greater’ than Biden Budget Envisions

During an interview aired on Friday’s edition of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers stated that while there are many “good ideas” in President Joe Biden’s budget, including focusing on the “single most important issue” of healthcare costs, “the deficit path is likely to end up greater than the administration imagines unless there are substantial policy actions.”

Summers said that there are “A lot of good ideas in the budget, but I think, for a variety of reasons, the deficit path is likely to end up greater than the administration imagines unless there are substantial policy actions. And I think we’re getting back into a phase, as interest rates rise, where it’s going to be very important to think about the long-run behavior of budget deficits. In many ways, the picture is more adverse than it was a decade ago when the Simpson-Bowles process was launched. So, I do think we need to have that as a bipartisan conversation. I welcome the President’s providing his budgetary blueprint and asking the Republicans to provide their political blueprint as a basis for conversation and dialogue. I am glad to see rising focus on containing healthcare costs, because that’s probably the single most important issue in thinking about the budget over the longer term. Though I’d have to say that my judgment is that the ultimately necessary expenditures on national security are going to be substantially greater than in the President’s budget.”

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