The deficit is down, but it’s about to go way up

It’s a small bit of good news in “Congress Office Forecasts Drop in U.S. Deficit” but you have to go to the very end of the article to see the long-term fiscal picture:

Over the long term, the Congressional Budget Office said, the real budget problem will be the surge in spending on Social Security and Medicare as baby boomers retire.

It echoed Ben S. Bernanke, chairman of the Federal Reserve Board, who told Congress last week that the recent improvement in the budget was merely the “calm before the storm” and that the nation would face “draconian” choices between severe cuts in benefits and steep tax increases if it failed to act quickly.

President Bush made a perfunctory reference to entitlement reform again last night:

Finally, to keep this economy strong we must take on the challenge of entitlements. Social Security and Medicare and Medicaid are commitments of conscience -- and so it is our duty to keep them permanently sound. Yet we are failing in that duty -- and this failure will one day leave our children with three bad options: huge tax increases, huge deficits, or huge and immediate cuts in benefits. Everyone in this chamber knows this to be true -- yet somehow we have not found it in ourselves to act. So let us work together and do it now. With enough good sense and good will, you and I can fix Medicare and Medicaid -- and save Social Security.

Is there really any hope for reform in this Congress? The Magic Eight Ball took one look at Senator Max Baucus and declared: “All signs point to NO.”