On June 28, the day Congress is planning to leave for the July 4 recess, Treasury Secretary Paul O’Neill has warned that the government will run out of money to pay its bills unless Congress increases the limit on how much the Treasury can borrow. This means parts of government, if not all of it, will no longer properly function, and government will default on its bills. This has been publicly described as a showdown between the Bush administration and Congress, but in fact it is really a showdown between Bush and the Republicans in the House.

Last week, the Social Security Board of Trustees issued its 2002 Annual Report on the status of Social Security’s finances, in which it extended its estimates of the number of years before Social Security’s surpluses will reach certain key milemarkers.

Senate Budget Committee Chairman Kent Conrad (D-ND), in commenting on the current federal budget debate, observed that, "the real test for this Congress is whether or not we're going to face up to our long-term challenges." The Chairman is absolutely right in directing the country to examine the long-term impact of its policy makers' budget decisions. Before we can be prepared to deal with our long-term domestic challenges, however, we must correctly identify just what these challenges are.