This week, CBO released its initially cheery-sounding report that the federal deficit for 2006 would shrink to $260 billion, from $318 billion last year, the lowest level since 2001. Of course, the gloomier long-term fact is that extending President Bush’s tax cuts beyond 2010 and accounting for war and other hidden costs would add $1.75 trillion in debt over the next 10 years and widen annual deficits by about $250 billion from 2011 through 2016. In particular, according to the New York Times, interest payments on the debt leapt by "almost 20 percent in 2006, to $220 billion, more than what is being spent on Medicaid or on the combined total for all federal income-support programs: unemployment compensation, food stamps, child nutrition programs and the earned-income tax credit” and would accelerate over the next decade, possibly crowding out key budget items. CBO acting Director Donald B. Marron, who is serving out the unfinished term of former CBO chief Douglas Holtz-Eakin, may have misstepped in blithely noting that the 2006 deficit would come in at around 2 percent of GDP, comparing favorably with deficit over the last 40 years that have averaged about 2.3 percent: "[T]he message I would send is that we've gone from a period in which the fiscal deficits we were running in this country were large and not sustainable if they had persisted, to a situation in which, at least now and for next year, for several years going forward, deficits appear to be in a range that they're sustainable.” At House and Senate Budget Committee ranking Democrats Rep. Spratt (R-SC) and Sen. Kent Conrad (D-ND), respectively, fired back at Marron. Said Conrad: “I think it is completely and totally irresponsible. I think it misleads the American people as to the true status of the fiscal condition of the country. We’re in a very unusual situation where the amount of the deficit is a fraction of the increasing debt of the country, and that the debt is going to be what has to be repaid.” And Spratt: "It disqualifies him, in my mind," from being considered for the job… I would not yet pass judgment on him, but I really thought the statement was uncalled for.” Surprising in this exchange is the notion that Marron’s tenure may be in question. By statute, Marron is slated to serve out Holtz-Eakin’s term. Watch this space as the war of words continues.