The Congressional Budget Office released a report saying that the deficit this year will be $426 billion, down about $60 billion from last year.  It's the smallest budget deficit run during the Obama administration.

Democrats are cheering the near half-trillion-dollar deficit, saying it's a sign of progress and that now is the time to raise taxes for more "investments."

But the CBO report contains news that is far from good.  By 2018, deficits will begin to rise again and reach a trillion dollars shortly after.

Washington Times:

“I don’t know how anyone can declare victory when trillion-dollar deficits are just on the horizon,” said Judd Gregg, a former senator and a co-chairman of the advocacy group Fix the Debt. “While deficits are down this year, the real story is that they are on the rise and that our national debt is at record-high levels and growing.”

Watchdogs pleaded with presidential candidates to start talking about the national debt in their campaigns.

For the most part, that conversation has been muted. Democrats have called for tax hikes to pay for more spending, and Republicans generally have focused on other issues.

New Jersey Gov. Chris Christie, however, has sparred with former Arkansas Gov. Mike Huckabee, a fellow Republican presidential candidate, over the fate of Social Security. Mr. Christie argues that the program needs benefit adjustments to survive.

The CBO report said Social Security spending will be slightly lower than analysts projected five months ago because fewer people will qualify for disability payments. Still, the $66-billion-a-month payout this year makes Social Security the largest single federal program, which is projected to represent 5.7 percent of gross domestic product in 2025.

Medicare and Medicaid, the government’s health care programs for the elderly and the poor, also are growing quickly and are projected to reach a combined 6.2 percent of GDP within a decade.

Defense and other basic domestic spending, however, continue to dip as a percentage of government spending and the economy, reaching levels not seen in decades.

[...]

In a more pressing finding, the CBO said the government has room to stave off a debt limit breach through November or December — a longer time frame than projected a few months ago. Mr. Hall credited higher tax receipts this year as the reason.

Debt held by the public will dip this year to 73.8 percent, down from 74 percent in fiscal year 2014, and will fluctuate for a few years before beginning a steady climb by 2020 and nearing 77 percent in 2025. Those are levels unseen since 1950, when the country was getting out from under the burden of World War II.

As a political issue, the debt is not very sexy.  At the moment, it is only remotely connected to people's everyday lives.  But once the deficits begin rising toward a trillion dollars again, people are going to have to sit up and take notice.

A lot of that increase in the deficit will come from a massive increase in servicing the debt.  With interest rates at zero, debt servicing is less than $250 billion.  But once the Fed starts to bring interest rates back to historic norms, debt servicing will skyrocket, perhaps as high as $800 billion.  It's easy to imagine the impact on defense spending and other vital government programs that the increase in debt servicing will have.

Sadly, it appears that nothing will be done about the structural deficit caused by rapidly increasing payments to Social Security and Medicare recipients.  In fact, not much will happen until the crisis is already upon us, and the solution then will be far more wrenching than if we began today to address the problem.