On Tuesday, former Fiscal Commission co-chairs Erskine Bowles and Alan Simpson released a framework that calls for an additional $2.4 trillion in deficit reduction over the next ten years. The proposal has been met with much support from commentators and media, and should further the conversation on debt and deficits as lawmakers move into the next round of budget negotiations.
With the March 1 deadline of sequestration only nine days away, lawmakers should work toward developing a plan that would replace the across-the-board spending cuts with smarter and more gradual policies that would put the debt on a downward path as a share of the economy. The worst possible outcome would be to punt on our debt problem and waive the sequester without offsets, as the country can no longer continue down this unsustainable fiscal path.
Today, former Fiscal Commission co-chairs and Moment of Truth Project co-founders Erskine Bowles and Alan Simpson have released a new framework, calling for $2.4 trillion in deficit reduction over the next ten years as well as additional long-term reforms. The proposal builds upon where the President and Congressional leaders were in the fiscal cliff negotiations but pushes both sides to do more.
Last month, we highlighted the “fiscal speed bumps” resulting from the fiscal cliff deal. With the signing of the bill which temporarily waived the debt limit by President Obama on Monday night, we can scratch off one fiscal speed bump and add three more.
A recent blog post by International Monetary Fund (IMF) economists Carlo Cottarelli and Philip Gerson on the IMF Direct blog highlights the importance of how deficit reduction plans are designed. Like many of the economists in our post last week, they make the case for a well-designed deficit reduction plan for the federal government to solve its fiscal problems.
Our blog yesterday noted that the debate over stimulus versus deficit reduction is much more nuanced than is often portrayed. Although these positions are sometimes characterized as directly opposing, there is often a lot of overlap. We described the difference as more about emphasis rather than direction.
A recent op-ed from Joe Scarborough in Politico has brought back attention to the stimulus vs. deficit reduction debate.