The drumbeat for action to reduce our long-term debt continues. Today the Debt Reduction Task Force of the Bipartisan Policy Center issued its recommendations on ways to put the United States on a sound fiscal course. The bipartisan panel was chaired by former Senator Pete V. Domenici and former CBO and OMB director Alice Rivlin. CRFB President Maya MacGuineas also served on the task force.
Roast (Lame) Duck is Served – The lame duck session of Congress begins today, but it is already being panned as unlikely to be very productive. As we previously noted, lawmakers face a sizable (and expensive) laundry list. With no indication that bipartisan cooperation on any of the items is likely, legislators may simply punt them to the next Congress. A meeting Wednesday between congressional leaders and President Obama will provide a signal on what can be accomplished during the session.
With the unexpected release of the draft proposal from the co-chairs of the President’s fiscal commission, the naysayers have come out of the woodwork. But as we have seen all too often, the critics are willing to blast the report without offering alternatives for fixing our fiscal house.
Continuing our analysis of the President’s Fiscal Commission Draft Report, let's look at what the Co-Chair proposal does on the spending side of the budget.
Overall, the proposal identifies $2.2 trillion in spending savings from 2012-2020, with about $730 billion coming from mandatory programs and about $1.5 trillion from discretionary programs, relative to the President's FY 2011 budget request.
On the discretionary budget, the Co-Chairs propose:
In a move much earlier than we expected, the Co-Chairs of the White House Fiscal Commission released their plan on how to get control of our national debt. The proposal is a drastic change from our current fiscal course and should be a document of great significance in the fiscal policy discourse. Before we get into specifics, we should point out that this is not the plan--14 out of 18 Commission members still have to agree to the recommendations.
Noted economist Brad DeLong is asking: where are the technocrats of the center? In a recent blog post, he laments the lack of a concrete plan among more centrist technocrats to get the economy going in the near-term while, at the same time leaving it better off in the long-run. He outlined a seven-point plan to accomplish this goal:
With the mid-term election behind us, the current Congress still has work to do. Lawmakers may address a huge number of issues when they return in two weeks. And it all will cost money.
Here is what lawmakers are likely to address in the next two months:
Andrew Biggs has an interesting piece out at the American Enterprise Institute that has been generating some attention (see Ezra Klein’s comments here, Andrew Samwick’s contribution here, and Andrew Sullivan’s addition here). Biggs states that raising the early retirement age (or EEA, for Earliest Eligibility Age) from 62 to 65 would increase retirement security, increase non-Social Security tax revenue, increase economic growth, and (believe it or not) increase Social Security benefits. Sounds like a win-win-win-win.
The Bottom Line continues its blog series highlighting our Ten Questions to Ask the Candidates ahead of the mid-term elections.
5. Strengthening Social Security. Do you believe that Social Security is in financial trouble? If so, what should be done to strengthen it? The Social Security Trustees’ most recent report says that Social Security will run a cash-flow deficit of more than $40 billion this year, $100 billion by 2020, and more than $450 billion by 2030.