Our Scary Fiscal Future? That Can Wait

What we heard in the second presidential debate was President Obama and Mitt Romney not discussing the nation's future. Almost every expert agrees that controlling health costs is the crux of curing chronic budget deficits. Health-care spending already exceeds a quarter of federal outlays. With Obamacare's coverage of the uninsured starting in 2014 and retiring baby boomers flooding into Medicare, the share is headed toward a third. Neither Obama nor Romney uttered a word about how to tame health spending.

And then there's the "fiscal cliff" - the roughly $600 billion of spending cuts and tax increases scheduled for early 2013 that, if allowed to take effect, would almost certainly plunge the economy back into recession. Not a peep from either on how to avoid the cliff: which tax increases or spending cuts should be postponed, why and for how long; and how to win congressional support from the other party.

Obama said that Romney's budget math didn't add up and that he had proposed spending cuts for only two programs, Big Bird (presumably public broadcasting) and Planned Parenthood. True. Romney promises to balance the budget, raise defense spending and cut taxes for some unidentified part of the middle class. All of this can't be done without massive as-yet-unspecified - and probably politically impossible - spending cuts.

But wait. The two programs that Romney offered for cuts were actually two more than Obama suggested. And Obama's budget never balances.

The administration's latest projections foresee $6.4 trillion worth of deficits between 2013 and 2022; in 2022, the expected deficit is $652 billion, 2.6 percent of the economy (gross domestic product). Even these forecasts rest on fairly optimistic economic assumptions. From 2014 to 2017, GDP is projected to grow about 4 percent a year, roughly double the current rate of expansion. The forecast assumes no recession between now and 2022.

Romney did mention, almost in passing, that he would reform Social Security and Medicare. Changes could yield huge savings, because these programs cost $1.2 trillion in fiscal 2012, a third of all federal spending. But Romney didn't specify how he would alter Social Security, and his controversial Medicare proposal wouldn't start until 2022 - after a two-term President Romney would already have left office.

Still, Obama didn't even mention these programs. The president has been content to imply that raising taxes on the "rich," defined as couples with incomes exceeding $250,000, would cure most of the deficit problem. That's not true.

Obama and Romney can evade these unpleasant and unpopular subjects now, but the victor won't be able to avoid them after the election. How the fiscal cliff is handled (or mishandled) almost certainly represents the single most important federal policy affecting the economy's near-term prospects. Nor will large deficits miraculously vanish even if the recovery continues and strengthens.

Americans face a rude awakening: a future that hasn't been acknowledged and debated in the campaign.