August 23, 2014

CONCORD COALITION WARNS THAT THE NEW “SURPLUS” IS NOT NEW MONEY, IT'S SIMPLY A NEW PROJECTION

WASHINGTON -- The Concord Coalition urged Congress and the Administration to use the larger-than-expected budget surplus for savings rather than rushing to spend it or give it away in tax cuts.  While heartened by the good news, Concord warned that the $1.9 trillion 10-year surplus announced earlier today by the President is not new money, it is simply a new projection.

 

         “We don't know whether this projected surplus will ever materialize.  But we do know that within a decade the retirement of the baby boomers will begin to exert enormous pressure on the federal budget.  Therefore, the most responsible thing to do with any surplus that develops is to save as much of it for the future as possible.  The worst thing we could do would be to give it away before it ever materializes on a package of election-year goodies,” said Robert Bixby, Concord's Executive Director.

 

         “We must guard against the erosion of fiscal discipline in light of what many politicians see as a torrent of cash.  It's like being hit with a hurricane after a drought.  The danger is that the much-needed windfall will be lost to run-off,” Bixby said.

 

         “The real challenge is how are we going to prepare for the retirement costs of the baby boomers?  Absent real entitlement reform that addresses the looming cash shortfalls facing Social Security and Medicare over the coming decades, debt reduction is the best way to prepare for the future.  Paying down the publicly-held debt will increase national savings, which will help grow the economy and make future cost burdens easier to bear.  Savings is the best course of action for the economy right now,” said Bixby.  

        

         The Concord Coalition is a nonpartisan, grass roots organization dedicated to balanced federal budgets and generationally responsible fiscal policy.  Former U.S. Senators Warren Rudman (R-N.H.) and Sam Nunn (D-Ga.) serve as Concord's co-chairs and former Secretary of Commerce Peter Peterson serves as president.