CNN Money | December 13, 2010
What happened!? Just two weeks ago we were celebrating the willingness of the political class -- or at least an influential subset of it -- to finally get realistic and confront the nation's fiscal challenges.
The remarkable success of President Obama's fiscal commission came as a welcome surprise. The panel came up with an outstanding budget reform proposal that could put the U.S. budget on track and reassure credit markets.
The starting point for this plan would be to identify a particular fiscal goal, such as bringing the debt back down to 60% of GDP by the end of the decade. Then, if Congress doesn't pass a plan to meet that goal, automatic spending caps and revenue increases would kick in.
From this point forward, policymakers should not add a single dollar to the debt without combining it with this kind of a responsible budget framework. It doesn't matter what the issue is -- the budget, the debt ceiling, or any new spending and tax bills. No more blind debt.
And then over the next year, lawmakers and the president must come up with the specific spending changes and tax reforms to fill in the plan.
If they choose instead to continue borrowing hand over fist and using the weak economy as an excuse not to offset any costs or enact a debt reduction plan, no one should be surprised when credit markets cry "enough!" And that would bring about a very unhappy ending to the borrowing binge that it appears we are still on.
CNN Money | December 6, 2010
It was a gut wrenching roller-coaster ride of a week for anyone who followed the deliberations and votes of the Bowles-Simpson fiscal commission.
Would 14 members sign on to formally send the plan to Congress? (That was never going to happen.) Would the two co-chairmen, Erskine Bowles and Alan Simpson, make like Thelma and Louise and jump off the ledge alone?
It ended up being a great week.
CNN Money | November 15, 2010
Commentary: Maya MacGuineas is the director of the fiscal policy program at the New America Foundation.
The draft plan released last week by the co-chairmen of President Obama's fiscal commission started an important conversation.
The plan would cut defense and domestic discretionary spending, end most tax breaks while lowering rates and reduce health care spending. It would make Social Security solvent by raising the retirement age, lowering benefits on the upper end and raising taxes. It would also increase the gas tax.
Congress and the president will have to come up with something both sides can agree on. There are certainly changes that could help make a budget plan more amenable to the left and the right. But the opening bid by Bowles and Simpson is an awfully good start. Let the negotiations begin
AOL News | November 11, 2010
It's not every day that the country receives some encouraging news on the deficit and debt front. But Wednesday just so happened to be one of those days.
The co-chairs of the White House's National Commission on Fiscal Responsibility and Reform, former White House Chief of Staff Erskine Bowles and former Sen. Alan Simpson, R-Wyo., released their own proposal for how to get the deficit and debt to manageable levels. While this proposal is not the final report of the commission, it reflects the first step in the commission's task of trying to forge a consensus among a minimum of 14 of the 18 members.
The proposal in a nutshell? Quite impressive.
With the population aging, health care costs growing faster than the economy and a seemingly ever-present imbalance between federal spending and revenues, our nation's debt is set to truly erupt in coming decades.
So how do the fiscal commission's co-chairs get us back to a sustainable course? Well, they take a hard look at every area of the budget.
On spending, the proposal cuts discretionary spending over the next few years and then limits its growth to inflation. Mandatory spending is pared back through changes to civil service and military retirement, farm subsidies and further reductions and controls on health care costs, among others. The proposal also advocates for serious reform of our outdated and inefficient tax system, calling for lower rates, fewer tax credits and exemptions, a simpler code and improved compliance.
The proposal also restores Social Security's solvency, for the sake of ensuring that the program will be there for future generations who will need to rely on it, not for the sake of deficit reduction.
Will every person agree with every proposal in the plan? Of course not. But just a brief reminder -- deficit reduction is hard. If the plan were filled with things we love, we'd be making the deficit worse, not better. This is the fiscal reality.
Reforming our fiscal path is about making our economy stronger down the road, it's about making government work more efficiently, it's about ensuring that social safety nets will still be around for the most vulnerable in society, and it's about tackling our debts before they tackle us. Most importantly, it's about keeping America's promise to bestow better opportunities to future generations.
OK, OK. So with all this praise, there's also got to be major downsides as well, right?
Well, reasonable people can disagree with some of the specific recommendations, and some may call for more spending cuts or more tax increases. But the fact remains that when viewed in its entirety, it's a giant step in the right direction.
As for all the attacks -- that's to be expected. But the co-chairs' proposal is a great starting point for an adult conversation on how to fix the budget, and we eagerly await expanding these conversations into a national discussion on how to stabilize and reduce our national debt.
Maya MacGuineas is president of the Committee for a Responsible Federal Budget.
In Getting Back in the Black, the Peterson-Pew Commission on Budget Reform calls on policymakers to reform the federal budget process in order to help stabilize the nation’s debt-GDP ratio, a proposal advanced in the Commission first report Red Ink Rising. The Commission concludes that policymakers must improve the budget process through implementing fiscal targets, budgetary triggers, and increased transparency as part of a package of fiscal reforms.