Press Release
What CRFB Would Like to See in the FY 2011 Budget
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What CRFB Would Like to See in the FY 2011 Budget
January 28, 2010
On Monday, February 1, President Obama will unveil his FY 2011 budget. Although the President offered a preview of some portions of the budget last night, many questions remain. Given the United States’ mounting debt, the budget must begin the process of closing our fiscal gap. In particular, CRFB hopes that the administration’s FY 2011 budget request: 1) Commits to an ambitious, yet attainable, fiscal goal. Given the nation’s current fiscal picture, U.S. creditors need to be reassured that the country intends to take control of our future debt path; to do this, the country needs an aggressive, yet realistic, fiscal goal. The Peterson-Pew Commission on Budget Reform has recommended stabilizing the debt at 60% of GDP by 2018, but this is by no means the only option. The important thing is that a goal be ambitious enough to avert a fiscal crisis, but realistic enough that it is viewed as credible. It is also important that a fiscal goal capture the need to deal with both the medium- and long-term fiscal imbalances – such as the case with a goal of stabilizing the debt so it does not grow as a share of the economy once the target is hit. 2) Details specific actions for meeting fiscal goals. It isn’t enough to set a fiscal target; the President must also provide specific policy proposals to achieve the goal. The partial discretionary spending freeze President Obama discussed last night is a good start, but stabilizing the debt likely will require changes to Social Security, Medicare, Medicaid, defense, and tax policy as well. 3)Avoids using gimmicks. The President’s budget must be able to meet his fiscal targets without relying on any budget gimmicks. For example, assuming that certain policies will expire when they are unlikely to can make it seem easier to stabilize the debt. Relying on unspecified savings (sometimes called “magic asterisks”), such as those suggested by a fiscal commission, also would be problematic – unless some type of “trigger” were put in place to implement tangible policies if an agreement could not be reached. 4) Enforces fiscal targets through budget rules and process reform. To codify his proposed targets, we encourage the President to insist on fiscal rules – such as an exemption-free PAYGO, statutory budget caps, and a debt trigger – to help maintain the fiscal path Congress chooses. Other reforms designed to bring transparency, order, and a focus on the long-term to the budget process also would be helpful. “This is a critical year for the budget,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “As the White House pivots from focusing on economic recovery to reducing the deficit, it needs to start the discussion by presenting an aggressive and credible budget. But the story doesn’t end there. It is an election year and President Obama will have to use a good deal of his political capital to get Congress to work with him on enacting any of the tough measures he is willing to put forth.”
For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
CRFB Reacts to the State of the Union Address
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CRFB Reacts to the State of the Union Address
January 27, 2010
The Committee for a Responsible Federal Budget commends President Obama for his focus on deficit reduction in his State of the Union address, and hopes that he will follow through by pressing Congress to enact medium- and long-term deficit reduction policies over the next year. As the President remarked tonight, we find ourselves in a “massive fiscal hole… a challenge that makes all others that much harder to solve.” And he argued, rightly so, that “if we do not take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery.” The President offered three proposals, in particular, which would be promising steps in the right direction: “We are thrilled that President Obama understands the threat of ever-rising debt, and is making some concrete proposals to begin to address it,” said Maya MacGuineas, President of the Committee for a Responsible Budget. “But actions speak louder than words. In the coming weeks and months, we urge the President to bring together members of both parties and begin taking concrete actions to stabilize the debt once the economy recovers.”
For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
CRFB Welcomes New Budget Proposals
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CRFB Welcomes New Budget Proposals
January 27, 2010 The Committee for a Responsible Federal Budget is encouraged by recent proposals to address the nation’s large budget imbalances. Constructive plans from the Blue Dog Democrats in the House, Senators John McCain and Evan Bayh, and Congressman Paul Ryan—in addition to President Obama’s expected budget proposals in tonight’s State of the Union address—are all helpful in jumpstarting a much-needed national discussion about our fiscal future. “It is no longer sufficient for policymakers to acknowledge that we have a problem” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. “You’d have to be blind not to know that. Now is the time to start proposing real solutions—and it is gratifying to see that a number of policymakers are taking that responsibility seriously.” The “Blue Dog Blueprint for Fiscal Reform” unveiled yesterday puts forward the goal of stabilizing the debt level at 60 percent of GDP—a key recommendation of the Peterson-Pew Commission on Budget Reform. In order to achieve that goal, the plan lays out 15 steps including: restoring paygo rules, capping discretionary spending, instituting a “budget reconciliation trigger” to enforce budget discipline, and establishing a fiscal commission to recommend to Congress spending and revenue changes to ensure long-term fiscal sustainability. The Bayh-McCain “Fiscal Freeze Act” would limit non-security discretionary spending growth to inflation, place a moratorium on earmarks, and implement a number of other reforms to stay in place until the federal budget is balanced. It also calls for long-term spending and deficit reduction targets, along with mechanisms to enforce those targets. Congressman Ryan’s detailed “A Roadmap for America’s Future 2.0” announced today includes a comprehensive set of reforms for healthcare, Medicare, Medicaid, Social Security, the budget process and the tax system. The debt would still reach 100 percent of GDP by mid-century—a level we worry is far too high, but it is nonetheless a significant improvement compared to current policy, and a far more detailed offering than we have seen from any other politician. President Obama will reportedly announce a three year freeze on “non-security” discretionary spending, as well as a presidential fiscal commission, in his State of the Union address tonight. CRFB does not support every element of each proposal, but we commend those offering them for exhibiting leadership and political courage in putting forward a plan. We hope others will follow their leads.
Click here for a pdf version of this release. For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
CRFB Supports Creating a Statutory Commission
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CRFB Supports Creating a Statutory Commission
January 25, 2010 The Committee for a Responsible Federal Budget (CRFB) supports creating a statutory commission to help deal with the nation’s budgetary challenges. As part of the discussion on whether to increase the debt ceiling, the Senate is scheduled to vote this week on an amendment offered by Senator Kent Conrad (DND) and Senator Judd Gregg (R-NH) to create a task force that would make specific recommendations for how to address the nation’s fiscal imbalances. President Obama endorsed the commission this weekend. It has long been the Committee for a Responsible Federal Budget’s preference that Congress directly addresses these urgent budget challenges, but given the seeming unwillingness to do so under regular order, CRFB thinks a commission would be beneficial. “A commission is certainly not a cure-all,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Our leaders must still make hard tax and spending choices, and sell them to the American people. But a commission can help to jump-start the critical process of crafting a sensible fiscal plan for the country, and make that process just a little bit easier.” A budget commission offers a number of potential advantages including:
“The country now faces both medium- and long-term budget challenges. A commission will probably need to work toward two goals: stabilizing the debt in the medium term, and then bringing it down to manageable levels over the longer term,” MacGuineas said. “The most important ingredient for success is that there is bipartisan buy-in. Nothing should be taken off the table in establishing a commission, both to help facilitate broad buy-in and because the problem is so large that all policy options will have to be considered” said MacGuineas.
Click here for a pdf version of this release. For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
Follow the House's Lead: Pay for the Extenders
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Follow the House's Lead: Pay for the Extenders
December 10, 2009
Yesterday, the House passed a $31 billion “tax extenders” bill to renew a number of tax rates for another year. The last minute passage of this legislation is part of an all too regular end of year crunch, since a number of expiring tax and spending provisions have not yet been renewed. Often in the past, in the rush to leave town for the holidays, the House and Senate have simply extended the programs for a year without regard for cost. We commend the House for fully offsetting the costs of their tax extenders bill, but worry that other changes may be deficit-financed. This year, given the fiscal crisis facing the nation, we urge Congress to avoid the easy solution and find ways to offset the full cost of their actions. “Ideally, policymakers would sit down and make rational decisions about what provisions are worth keeping in the first place,” said Maya MacGuineas, President of the Committee for a Responsible Federal Budget. “But if they are going to insist on a band-aid solution, the least they could do is pay for it.” Among the other major items likely to be extended are:
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Including the tax extenders bill, renewing these measures could cost more than $225 billion, mostly spent over one year. Fortunately, the tax extenders legislation was passed with offsetting revenue raisers. “Kudos to the House for paying for this policy” said MacGuineas. But Congress may use gimmicks to pay for some of these other measures (for example, using TARP money), and might not offset other changes at all. Congress should avoid such tactics and simply pay for whatever legislation they pass. “Two hundred and twenty-five billion dollars? It seems like every year is worse than the last,” MacGuineas said. “When the Bush tax cuts expire next year, we’ll be talking about trillions. We’re in fiscal trouble here, and I don’t see things getting any better without a major change of course. Let’s at least make sure we aren’t making things worse.”
For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
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CRFB Supports Fiscal Task Force
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CRFB Supports Fiscal Task Force
December 9, 2009
The Committee for a Responsible Federal Budget commends Senators Kent Conrad (D-ND) and Judd Gregg (R-NH) on their proposal - released today - to create a Bipartisan Fiscal Task Force. With the public debt above 50 percent of GDP and rising steadily, and Americans increasingly frustrated with the inability of Washington to deal with the dire situation, some type of commission, task force, or budget summit would be a sensible approach to break through the partisan deadlock to foster fiscal responsibility. “A bipartisan commission would greatly help politicians address the nation’s long-term fiscal challenges,” stated Another important benefit of a fiscal commission is that it could create a shared fiscal goal as a focal point for achieving real solutions. The bipartisan Peterson-Pew Commission on Budget Reform, a joint venture of CRFB, the Peter G. Peterson Foundation, and The Pew Charitable Trusts, has been working to develop an appropriate goal for dealing with the growing debt and will release a report, Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt, on December 14 at the National Press Club with a six-step plan. “Unfortunately, the gridlocked and dysfunctional legislative process has proven unable to deal with the coming fiscal crisis, and time is quickly running out,” said MacGuineas. “Establishing a bipartisan task force that promotes collaboration and honest discourse with an expedited process for considering its recommendations can overcome the polarization and disorder in
For press inquiries, please contact Kate Brown at (202) 596-3365 or brown@newamerica.net. |
