September 19, 2014

State of the Union: Deficit Reduction Plan Needed

In preparing for tonight’s State of the Union address, President Obama would do well to heed suggestions recently offered from two fiscal experts who have advised him in the past.

Christina Romer, former chairwoman of the President’s Council of Economic Advisers, urged him in a New York Times op-ed to focus on the need for a comprehensive plan to deal with long-run projected budget deficits.

“I am not talking about two paragraphs lamenting the problem and vowing to fix it,” Romer wrote. “ I am looking for pages and pages of concrete proposals that the administration is ready to fight for.” She cautioned against immediate fiscal austerity measures that would jeopardize the economic recovery but said legislation this year to gradually trim future deficits could boost the economy by “raising confidence and certainty.”

Romer said the recommendations of the President’s bipartisan fiscal commission would be “a very good place to start.” She pointed to the need for shared sacrifice, tax reform, entitlement reform and spending cuts as well as revenue increases.

In a subsequent New York Times piece last Sunday, a member of that commission -- Alice Rivlin, who also recently co-chaired the Bipartisan Policy Center’s Debt Reduction Task Force -- touched on many of these same suggestions while also emphasizing the need for job growth.

The President should urge "immediate action on a multiyear deficit reduction plan,” Rivlin wrote. “America’s future prosperity and global power are on the line.”

A day after the president's speech, the Congressional Budget Office will release updated budget projections that will further highlight the importance of deficit reduction.