My View

My View: Alan Simpson and Erskine Bowles

Alan Simpson and Erskine Bowles are the former chairs of the Simpson-Bowles Fiscal Commission and members of the Committee for a Responsible Federal Budget. They co-wrote an op-ed in the Statesboro Herald.

Our nation needs to get its fiscal house in order, and to do so citizens must fully demand leaders who are willing to put partisan differences aside and come together to present the American people with honest solutions and consensus proposals that put the national interest ahead of special interests. That is why we were so disheartened to learn that John Barrow is being criticized for his support of a budget based on the plan recommended in 2010 by a bipartisan majority of the National Commission on Fiscal Responsibility and Reform which we co-chaired (Simpson-Bowles Commission).

The Simpson-Bowles plan is a comprehensive, tough-minded and pragmatic approach to attacking our national debt and ensuring that Social Security is fiscally sound for future generations.

Because it seeks to tackle the hard problems, it came under savage attack from partisan interests from both ends of the spectrum.

MY VIEW: Maya MacGuineas

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

It’s election season, which means the time to demagogue Social Security is again upon us. Those trying to avoid difficult trade-offs in Social Security reform often say that all we have to do to is “tweak” the system by lifting the $117,000 payroll tax cap so all wages are subject to the tax.

Taxing all income above $117,000 at 12.4% would raise more than $100 billion a year–far from a tweak. And never mind that the government has many other priorities that might be a better use for new funds, such as covering growing health-care costs, making overdue investments in infrastructure and R&D, or controlling the national debt.

Even if we eliminate the cap–and there is a good case for at least raising it–that wouldn’t make Social Security even close to solvent.

According to the Social Security Administration (SSA), eliminating the cap would close about 70% of the system’s 75-year imbalance. According to Congressional Budget Office accounting, it would close only 45% of the gap.

The SSA found that eliminating the cap on payroll taxes would close only one-third of the shortfall in the 75th year. This is important because it shows whether the reform would help make the system structurally sound or whether it would generate largely short-term savings. Eliminating the cap would generate only 10 years of surpluses before the benefits Social Security pays out again begin to exceed the revenue it takes in.

Part of the reason the change would not be more effective is that while Social Security might begin taking in more revenue, it would also be on the hook for paying out larger benefits down the road. One smart way to address this would be a form of means-testing, where there would be no additional benefits associated with the additional contributions from those making more than $117,000. This would generate more revenue for Social Security while better targeting its benefits. But this change is often opposed by progressives who fear it would break the traditional link between contributions and benefits. Those critics need to decide whether providing new benefits to people who don’t need them is really worth giving away a significant portion of the gains that would be achieved by lifting the cap.

MY VIEW: Judd Gregg

Judd Gregg, a former Republican senator from New Hampshire, served as chairman of the Senate Budget Committee from 2005 to 2007 and ranking member from 2007 to 2011. He recently wrote an op-ed featured in The Hill. It is reposted here.

At Dartmouth College in New Hampshire, there was recently a gathering of major healthcare public policy experts, senior staff of congressional health committees, and people concerned about both the health of Medicare and the health of the nation’s fiscal situation.

It was a small group with a specific goal: To come up with some doable proposals that are bipartisan in nature and can be used both to improve the delivery of Medicare to seniors and to reduce its unsustainable cost path, which is a large driver of the nation’s debt.

It was called “The Dartmouth Summit.”

MY VIEW: Maya MacGuineas

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

MY VIEW: Maya MacGuineas

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire. It is reposted here.

A few years back, Federal Reserve Chairman Ben Bernanke gave a speech at the annual Fed gathering in Jackson Hole, Wyo., that devoted a good deal of attention to U.S. fiscal policy.

The speech was important not only because it was on target – Mr. Bernanke recommended reforming U.S. tax and spending policies in a gradual way to control the debt without creating “fiscal headwinds” on the recovery (translation: a Simpson-Bowles-like plan) – but also because he stepped beyond the world of pure monetary policy to address legislative issues. This only made sense since the economic recovery so clearly depended on both rational Fed and fiscal policies. Even then, Mr. Bernanke held back from being overly prescriptive because there is such strong a firewall between policies from the Fed and those on Capitol Hill.

It seems likely that as Fed Chairwoman Janet Yellen gave her keynote address at Jackson Hole last week focused on labor markets, she, too, would have liked to be able to give lawmakers a gentle nudge—or a shove—in the right direction.

MY VIEW: Maya MacGuineas

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote a commentary that appeared in the Wall Street Journal Washington Wire two weeks ago. It is reposted here.

 

MY VIEW: Maya MacGuineas

Maya MacGuineas, President of the Committee for a Responsible Federal Budget, wrote an op-ed distributed via McCatchy wire service that appeared in several papers around the county, including today's Providence Journal. It is reposted here.

MY VIEW: Eugene Steuerle

Eugene Steuerle is the cofounder of the Tax Policy Center, a senior fellow at The Urban Institute, a columnist for Tax Notes Magazine, and a CRFB Board member. This morning, he testified before the House Ways and Means subcommittee on Social Security. Below is a transcript of his spoken remarks, as posted on his blog.

MY VIEW: Judd Gregg

Judd Gregg, a former Republican senator from New Hampshire, served as chairman of the Senate Budget Committee from 2005 to 2007 and ranking member from 2007 to 2011. He recently wrote an op-ed featured in The Hill. It is reposted here.

The United States debt now stands at $18 trillion. This is double what it was just a few years ago. The trend, under the presently proposed budgets of President Obama, is that it will triple in another five to seven years.

People point facts like this out all the time. But the response from the president and the Congress is to add more spending that has not been paid for, thus increasing the debt problem.

The two most recent cases are the supposed ‘fix’ of the Department of Veterans Affairs and the highway bill.

MY VIEW: Kent Conrad and Judd Gregg

Kent Conrad, a former Democratic senator from North Dakota, and Judd Gregg, a former Republican senator from New Hampshire, are both former chairmen of the Senate Budget Committee. They recently co-wrote an op-ed featured in Roll Call. It is reposted here.

Since ratification of the constitutional authority given to Congress to tax and spend in 1788, our government has struggled to manage the federal budget. After numerous failed budget concepts and commissions, the Budget Act was finally enacted in 1974 to establish the modern-day budget process. Almost exactly 40 years since the Budget Act was signed into law, there is growing consensus among policymakers and budget observers that the system no longer functions as intended.

As former chairmen of the Senate Budget Committee, we have personally witnessed the transformation away from a functioning regular order and toward an ad hoc approach to fiscal policy. Congress adopted an annual budget resolution, approved by both chambers, each fiscal year from 1976 through 1998. Since then, however, there have been eight fiscal years in which Congress has not approved a budget resolution. Government shutdowns, fiscal cliffs, temporary fixes and retroactive policy changes — all without serious consideration of our nation’s fiscal health — have become the new budgetary world order. Even when budget rules are in place, lawmakers evade them with gimmicks, emergency designations and waivers that result in the costs being added to our debt.

One of the core functions of Congress is to review and allocate discretionary spending each year through 12 appropriations bills. If not done by the beginning of the fiscal year on Oct. 1, then either the government shuts down or operates on a continuing resolution. As the Committee for a Responsible Federal Budget points out in a new paper detailing the problems with the current process, the average length and breadth of continuing resolutions has increased in recent years. These temporary funding extensions, along with shut downs, postpone important funding decisions and hamper the efficiency across the federal government.

We also know too well that even when budgets are produced on time, they are often political documents that lawmakers never expect to implement or enforce. Consideration of budget resolutions on the floor of the United States Senate in particular often devolves into late-night “vote-o-rama” sessions where hundreds of political messaging amendments geared to inspire campaign commercials are filed, while there is little debate on the ways to address the long-term drivers of our debt such as the need for tax reform and entitlement reform. In fact, we found the constraints of the budget process and the lack of political will to address the debt so stifling that we worked together to author legislation to create a special commission, later known as the Fiscal Commission or Simpson-Bowles, to bypass some of these process challenges.

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