The recent revisions to the CBO projections improved our short-run outlook, a welcomed development, but they have also triggered a wave of overconfidence currently hitting Washington. The Center for American Progress recently called to hit the fiscal reset button and turn to other issues, which we showed would be a major mistake.
One of the most important truths to remember is that today's budget will not only define the decisions of today, but also to some extent determine the decisions of tomorrow. Because future members of Congress do not have a seat at the table, it is important to keep in mind the how the burden of higher debt will affect -- and potentially constrain -- future generations.
The new Social Security Trustees Report leaves us another year closer to the trust fund's insolvency and the takeaway remains the same - we do not have much time to waste.
With previously enacted deficit reduction and the economic recovery helping our short-term fiscal outlook, it may be tempting for lawmakers to put the budget on the back burner and turn to other issues. But this would be a clear mistake.
In the past, the Bureau of Labor Statistics has made adjustments to the Consumer Price Index without much controversy. But due to the method of calculating the chained CPI, switching to this more accurate measure of inflation requires the creation of a new index, and thus action from Congress. While receiving the support of many economists, the chained CPI has been attack by interest groups on the left and right.
Erskine Bowles and former Senator Alan Simpson (R-WY), the two former co-chairs of the Fiscal Commission, have spent the last two and a half year talking to American citizens about the need to put our budget on a sustainable path and the recommendations put forward by the Fiscal Commission. But while the political landscape has changed over the last couple years, our debt problem remains far from solved.
Putting debt on a sustainable path has been a key issue in Washington ever since the Fiscal Commission showed that a bold compromise would be needed to secure the nation's future prosperity. And while the previous 112th Congress made some progress by enacting $2.7 trillion in savings, much of it was low hanging fruit in the budget and did not get us all the way towards a sustainable fiscal future. The truly tough choices will need to be made by this Congress.
In today's Politico, CRFB board member and former Secretary of Commerce Pete Peterson calls for a long-term solution to our national debt, which addresses the drivers of our debt, protects the vulnerable, and encourages economic growth.