The Committee for a Responsible Federal Budget and many others have called on the Super Committee to find two or three times its mandated $1.5 trillion in budget savings. If the Super Committee is unable to agree on all the details before its November 23 deadline around the corner, we hope it will set the stage for continued efforts early next year to "Go Big" in order to keep the momentum going and put serious reforms in place.

In a new analysis yesterday, CRFB urges the Super Committee to recommend a two-stage process if they don't have the time to reach agreement on all the technical details of serious entitlement and tax reforms. (This would technically represent a third stage if the Budget Control Act counts as the first stage, but we'll refer to it as a second stage). If such a process is used, it should include several elements, including a serious downpayment on savings and strong enforcement, to prove it's real and credible and to ensure that additional savings will materialize. We discuss several different possible methods, including that the Super Committee could recommend that Congress continue or reconfigure the Super Committee. But the ultimate goal needs to be another $4 trillion in savings.

As we argue in the analysis:

• Go Big: Achieve savings large enough to stabilize and reduce the debt as a share of the economy;
• Include a large and meaningful down payment;
• Include a detailed framework for the second stage;
• Put in place an expedited process to achieve additional savings within the next three to six months, with fast-track status;
• Allow for the consideration of other plans if larger plan is not adopted;
• Establish a credible enforcement mechanism to ensure the required savings are achieved.

Click here to read the full paper on how a two-stage process would work.

CRFB president Maya MacGuineas just wrote an essay featured in the Ripon Forum. She writes that the debate over whether the "debt crisis" or the "jobs crisis" is more important misses the point that they are not mutually exclusive and that we can do both at the same time. She argues that debt reduction is a critical element of any economic growth strategy. She states that the best option to create a stronger economy and to avoid the risk of a fiscal crisis is a comprehensive, multi-year fiscal plan that stabilizes and reduces debt as a share of the economy.

She writes:

The solution, which has been laid out by Ben Bernanke of the Federal Reserve, Christine Lagarde at the International Monetary Fund, and Erskine Bowles and Alan Simpson and the President’s Fiscal Commission, to name a few, is instead a multi-year, comprehensive fiscal plan that would set the budget on a glide path to stabilize the debt, but leave enough fiscal space up front keep to pushing the economy along.

Putting in place a deficit reduction plan to bring the debt back down to around 60 or 65 percent of GDP over a decade (still significantly higher than the historic average of below 40 percent, but more manageable at least) creates the opportunity to grow the economy in a number of ways that will not be achieved either through one-off stimulus measures or incremental spending cuts.

...First, it would take off the table the risk of a fiscal crisis. I know that only a few years ago, comparing the U.S. to Greece seemed inflammatory and absurd. However, recent events – including the well-deserved downgrade and the paralysis of our political system – now show the possibility of a full-blown fiscal crisis to be not nearly as remote as we would have liked to believe. Only by charting a new fiscal course will we remove that risk.

Second, implementing fiscal reforms that are comprehensive in nature, rather than incremental, offers the opportunity to restructure our budget and tax systems in ways to promote growth. The key here is switching from a consumption-oriented to an investment-oriented budget.

Click here to read the full essay.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.

Today in the Washington Post, Fiscal Commission Co-Chairs and CRFB Board Members Al Simpson and Erskine Bowles wrote an op-ed titled, "The Super Committee's Make-or-Break Question," noting that they are not surprised that the Super Committee is going down to the wire to reach an agreement - their experience on the Fiscal Commission taught them how hard this issue is.

They then offered advice that the easiest way to reach a deal is to "go big and go broad", echoing our own Go Big campaign. They say:

"So how do you start such an agreement? Go big and go broad. One of the lessons from our work leading the Fiscal Commission is that it is key to take an approach both large enough to match the magnitude of the problem and comprehensive enough to allow for the tradeoffs and balance necessary to reach a bipartisan agreement. Fiscal Commission members were willing to take on their own sacred cows and fight special interests—but if, and only if, they saw others doing the same. The stark reality is that to take on anything in negotiations such as these, you almost have to take on everything. A supermajority of the commission would not have voted for our plan had we not taken on defense, domestic programs, the solvency of Social Security, health care, and spending in the tax code all at once."

They conclude by noting that this issue is so important, that political ideologies and special interests have to come second. The big picture has to take precedence. Furthermore, they note that fixing our fiscal problem serves both parties, noting that:

"We need more politicians who understand the calculus that personal priorities and common good coexist. The nation desperately needs broad, bipartisan agreement based on shared sacrifices. And the members of the supercommittee know the policy options and the choices that must be made. Now, it’s a matter of getting the committee’s members to recognize that statesmanship can also be a political win. Some might even call this leadership."

Click here to read the full Washington Post op-ed.

Additionally today, former Senator Al Simpson penned his own op-ed on CNN entitled, "All it takes to solve U.S. Debt is Willpower." Simpson notes that our fiscal situation will require supremely hard choices and rejects the notion out of hand that the problem can be fixed by taxes, spending, or economic growth alone -- all three are required. Simpson then goes into the fact that no fiscal plan will be perfectly ideal or liked by everyone, nor should it be. Sacred cows will be lost and tough choices have to be made. However, when politicians have the will, they make the right choice. Simpsons notes:

"When Dick Durbin announced that he was supporting our plan he said he was doing so even though it contained items he 'hated like the devil hates holy water' and he knew his vote for it would deeply disappoint many of his friends and allies. Tom Coburn well knew he would be demonized on taxes by the zealous enforcers of ideological purity like Grover Norquist of Americans for Tax Reform. But both Tom Coburn and Dick Durbin, and a supermajority of our commission, were willing to give up something they like to protect the country they love. Our nation simply cannot afford to have our elected leaders fearfully bow and scrape to the likes of Grover Norquist and the AARP. We need real leaders, courageous leaders who will place the national interest ahead of special interests. The members of the super committee as well as congressional leaders and the president must do just that. Pray for 'em!"

Click Here to read the full CNN op-ed. 

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.

Yesterday, Moody's Analytics Chief Economist Mark Zandi penned an article in Politico about the various possible outcomes of the looming Super Committee deadline. His remarks about the benefits of a multi-trillion dollar deficit reduction plan allow us to welcome him to the growing list of members in our Announcement Effect Club. Congrats! When referring to the prospects of a Go Big debt reduction agreement, he wrote:

"It’s too bad, because the economic payoff would be huge. Financial markets would rally substantially, and confidence and economic growth would surge. There might be appropriate wariness that this is too good to be true — but if it were true, our financial futures would quickly get brighter."

The Announcement Effect Club is one where merely showing the nation, the markets, and the world that we have a plan in place will provide economic benefits. Congrats to Mr. Zandi for agreeing with this notion. Now let's hope that our policymakers, particularly those on the Super Committee, heed this advice and enact such a plan. Time is running out, but the economic payouts, as Zandi notes, would "be huge." 

You might think we're about to talk about Social Security reform or how to reform the Sustainable Growth Rate. But what we're actually talking about here is the need for Super Committee members to not be thinking of ways to reduce the overall savings to get a deal, but ways to increase the savings to make the chances of a deal more likely.

With two rounds of deficit reduction offers coming from both sides on the Super Committee, one disappointing trend has emerged: claw-back.

Democrats started with a "Go Big" plan of over $2.5 trillion in net new savings, more than two times the minimum mandated amount of $1.2 trillion over ten years. The cumulative total savings would be closer to $3.9 trillion including the Budget Control Act and final CR savings of $1.3 trillion. A newer offer, however, reduced both the proposed revenue increases and spending cuts by a total of about $675 billion (excluding the costs of any new job creation proposals). Similarly, Republicans started off with an offer for over $1.9 trillion in new savings, but instead of proposing more spending reductions in their second offer in exchange for increased revenues, they pushed down the overall savings.

It's particularly noteworthy that the second offer from Democrats nixed the chained CPI and brought down the level of health savings. CRFB has been arguing that the chained CPI - a technical fix - is the lowest of low hanging fruit for some time now, and we will not be able to control rising debt if we don't control health care spending! The most troubling change is how all offers seem to be negotiating smaller instead of larger towards a more sustainable fix.

^{Note: Numbers may not add due to significant rounding, and are based off press accounts. Estimates off of a current policy baseline.
~Includes savings from both revenues and spending.
*Excludes about $200 billion from macroeconomic dynamic effects of future tax reform.
^Excludes about $110 billion from macroeconomic dynamic effects of future tax reform.}

The trend from both sides is understandable but disappointing. It's not surprising that Democrats dropped their proposal to adopt the chained CPI for Social Security COLAs and reduced their Medicare savings when they can under criticism from their own base while also having their offer rejected by Republicans. We fear that Republicans may react in a similar manner to the rejection of their offer for new revenues. While asking for fewer concessions from the other sides may seem like the easiest way to reach a deal, it could actually make success harder to achieve and could leave in place fiscal pressures that threaten each parties long-term priorities.

Other bipartisan commissions have shown us that to get a real deal more must be added to the table. Fiscal Commission co-chairs Erskine Bowles and Alan Simpson frequently mention that by being bold and aggressively exceeding their mandate, they actually found it more likely to get other members of board. That was the reasoning behind Republicans and Democrats on the Fiscal Commission last year who voted for the plan. The Republicans, especially Tom Coburn, understood that the best way to reach an agreement on controlling spending growth (just look at Coburn's plan to cut $9 trillion in spending over ten years!) was to agree on new revenues, just as the Democrats who voted for the plan understood that some of the spending cuts were necessary to reach an agreement on elements of the plan that were important to them.

We fleshed this logic out in more detail in a recent policy paper, noting the importance of a sense of shared sacrifice and the need to actually fix our debt problem. It's no surprise then that Erskine Bowles's proposed compromise plan would increase the savings above these levels, adding larger spending cuts than in the Democratic proposal and higher revenues than in the Republican offer.

We need to achieve savings of two to three times the $1.2 trillion minimum savings mandate, a level to which the Republican offer is already dangerously close. We've got to think bigger if we are to reassure the American public, businesses, and credit markets that we will avoid crushing future debt burdens.

The experience of the Fiscal Commission shows us that scaling up the savings on both sides of the ledger is one of the most promising approaches we can take to reach an agreement and put debt on a downward path.