The Bottom Line

July 21, 2011

To continue shedding light on the details of the Gang of Six proposal, below we provide a clear and concise overview of how the Gang of Six's proposal would wrestle control of future debt from its current course.

The Gang's plan is a two part process: enact $500 billion in savings now as a downpayment on future deficit reduction, and then instruct the relevant committees in Congress to recommend additional savings, with, at times, clear instructions and conditions for those additional savings.

The Downpayment

July 21, 2011

As part of an initiative called Do We Have a Deal Yet?, 115 college student body presidents from over 40 states have sent a letter to President Obama and Congressional leaders, calling for a balanced and bipartisan solution to the debt ceiling and our longer-term debt problem. 

July 21, 2011

Former acting director of CBO and CRFB board member Barry Anderson appeared on Bloomberg TV today, where he explained that he sees "good things" in the Gang of Six proposal. Anderson voiced optimism that we seem to be making "positive steps that are getting closer to a longer term big deal, and that is very positive news." Asked about whether a short term deal to buy time to work out deficit reduction would be a good move, Anderson explained that a two-step process like that might work well:

July 20, 2011

In a blog earlier today, we endorsed a very short-term debt ceiling increase if it allowed time for the Gang of Six plan to be passed. We floated this basic model a while back when we said that lawmakers should avoid any long-term debt limit increases without concrete steps on controlling our debt.

July 20, 2011
A Midweek Update on Federal Fiscal and Budget Policy Developments

Gang of Six Unveils Plan – The bipartisan Gang of Six senators that had been left for dead when one of its members left the group earlier this year quickly sprang back to life on Tuesday when Sen. Tom Coburn (R-OK) rejoined the group and it unveiled its long-awaited plan to colleagues.

July 20, 2011

Despite broad enthusiasm for the Gang of Six proposal released yesterday, some have argued that there isn't enough time to put it into law. Senator Majority leader Harry Reid said, for example:

July 20, 2011

Today, the Comeback America Initiative (CAI), a non-partisan organization that promotes discussion around fiscal solutions, released their "Restoring Fiscal Sanity" Report, a plan to bring debt down to sustainable levels. At the launch event today, CRFB board member and former U.S. Comptroller General David Walker presented the report’s two fiscal frameworks which provide policymakers with specific reforms to avoid a debt crisis and encourage job growth.

July 19, 2011

The Gang of Six has been working on a fiscal plan for months now, and it appears that they are now ready to step into the debt debate in the eleventh hour. More positively, it looks like they may have a wide swath of support in the Senate.

July 19, 2011
Planning for How to Present the Budget in 2013

If you are following the machinations over raising the nation's debt limit, you know that both political parties expect much of the progress on the budget to be delayed until at least 2013—after the next major election. Not one compromise on the table has even come close to addressing the nation's deficit issues head on. The big question is whether markets and the public will allow our elected officials to flounder around until 2013.

July 18, 2011

At a press conference earlier this afternoon, Sen. Tom Coburn (R-OK) officially released his deficit reduction plan, Back in Black--not to be confused with the Peterson-Pew report Getting Back in the Black. The package offers a wide range of savings options, totaling a little over $9 trillion. The plan is extremely detailed -- as Sen.

July 18, 2011
A Weekly Update on Fiscal Policy Developments

In Need of Magic – The Harry Potter saga has come to a conclusion with the blockbuster release of the final movie in the series. Sadly, an end the debt-limit drama is not yet in sight.

July 18, 2011

CBO recently released its analysis of a hypothetical deficit reduction plan's effect on the economy. They use a $2.4 trillion deficit reduction plan (about the same as the hypothetical Biden group plan) to illustrate the short-term and long-term economic effects of fiscal consolidation, while showing how these effects either add to or detract from the original deficit reduction.

July 15, 2011

S&P has followed Moody's in issuing the frequent warning about how not raising the debt ceiling by Au

July 15, 2011

In an exclusive op-ed today for CNN, CRFB president Maya MacGuineas urges lawmakers not to give up on trying to use the debt limit increase as an opportunity to reach a "grand bargain," arguing that a small deal simply won't be enough.

July 14, 2011

Appearing before the House Financial Services Committee yesterday, Fed Chairman Ben Bernanke signaled that the Fed was keeping all options on the table should the economy need another round of monetary stimulus.

July 13, 2011

Update 7/15: S&P has joined Moody's in issuing new warnings to the United States. Putting the country on "negative watch," S&P warned that it could downgrade U.S. debt before the August 2nd deadline.

July 13, 2011

The budget and debt-limit negotiations are approaching the 11th hour. Congressional leaders and the President continue negotiating over a deficit-reduction package, the size of which is still up in the air. Estimates have ranged from a “small package” of somewhere between $1 and $2 trillion to a larger deal of about $4 trillion, both over ten years. Some details of the discussions can be surmised from a presentation that House Majority Leader Eric Cantor (R-VA) gave to his caucus on 7/12.

July 13, 2011

Talk of switching to the chained CPI for all inflation indexed elements of the federal budget has continued gaining much attention in the past few months, and the policy has been included in the ongoing debt ceiling negotiations (we'd like to think our policy paper had something to do with it).

July 13, 2011

Update 7/14: Gov. Dayton and the legislature have reached an agreement to fund the government through the biennium.

July 13, 2011

Yesterday, nearly five hundred business leaders and organizations sent a letter to the President and members of Congress joining the chorus of other concerned groups and citizens (including CRFB!

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