CRFB Board Members Offer Thoughts on Debt Deal

The debt deal signed into law by President Obama on Tuesday has provoked all kinds of reactions from the media, the public, and lawmakers (click here for CRFB's reaction). Given the importance of the deal and the fact that CRFB's board is full of leading budget experts, it's no surprise that many of our board members have been called on to express their views about the deal and what lies ahead. While our "My View" blog series documents publications and other work from members of our board, so many have offered valuable insight that we thought it deserved a separate blog.

While every member of our board offers a different perspective, the consensus among CRFB board members seems to be that though the debt deal made some progress in the right direction, its not nearly enough to significantly improve our fiscal outlook and the truly difficult decisions still lie ahead.

Former fiscal commission co-chair Alan Simpson called the deal a “timid baby step” in a CNN op-ed on Wednesday, and urged the members of the special committee tasked with finding an additional $1.5 trillion in deficit reduction by November to address the problem in a comprehensive and bipartisan matter. He continued:

If the members of this committee are serious, they will look at the work of the Fiscal Commission that Erskine Bowles and I co-chaired, and they will look at the work of the brave souls in the Senate Gang of Six. They need to look at all parts of the budget and leave no sacred cows out on the range. If they leave out Medicare, Social Security solvency, Medicaid, defense and spending in the tax code -- the biggest drivers of the debt -- it won't fix one damn thing.

Alice Rivlin echoed these sentiments, calling for a bipartisan and comprehensive "grand bargain" on future deficit reduction in an op-ed for The Hill co-authored with former Sen. Pete Domenici. The authors laid out three elements they say are essential in putting the U.S. back on a sustainable fiscal path: slowing the future growth of Medicare and Medicaid and ensuring the solvency of Social Security, comprehensively reforming the tax code, and capping discretionary spending.

NPR’s All Things Considered hosted CRFB president Maya MacGuineas, who talked about the "trigger" in the debt deal that would enact across-the-board spending cuts in the event that the special committee fails to find or agree on sufficient deficit reduction. She spoke about triggers used in past legislation, lessons we could learn from those experiences and how the trigger in today’s debt deal compares. (See here for more on triggers and other budget enforcement mechanisms.)

Maya also spoke with MSNBC's Andrea Mitchell this week, where she was joined by board member David Walker. Both said that the debt deal fails to address the areas of our budget that need reform the most, such as entitlement spending and revenue. Mr. Walker did say that he was "cautiously optimistic" that the special committee would be able to come up with $1.2 to $1.5 trillion in deficit reduction, though he doubted the committee would be able to make the tough choices regarding entitlement and tax reform.

David Stockman expressed a slightly pessimistic view of the deal and our fiscal outlook Tuesday on CNN. He said that the deal simply kicks the can down the road and that our fiscal situation is "very grim." He concluded that "we're heading down a very bad path if this continues." Let's hope the special committee proves all the skeptics wrong and is willing to make the difficult political choices necessary to avert a fiscal crisis.