April 17, 2014

Posts on federal budget

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Wednesday, December 3, 2008 - 4:28 PM

Congress has been developing a stimulus plan in recent weeks which it hopes will provide a much needed boost to the ailing economy. There has been a tendency to pin those supporting a large stimulus plan against those individuals deemed to be “deficits hawks.”

There are two points to make about this discussion. First, such a characterization assumes there are currently “deficit hawks” who are standing in the way of economic stimulus because of their concern for the short-term deficit--an assumption I consider dubious and at the very least is not an accurate description that people could make of The Concord Coalition based on our recent media interviews or policy briefs.

The second point is that setting up positions in this “debate” implies that short-term stimulus and long-term fiscal responsibility are contradictory goals. They are not, and we have attempted to make that clear.

In our most recent issue brief, we highlighted the important roles of short-term stimulus aimed at increasing aggregate demand in the interim and budgeting rules (like PAYGO) aimed at improving our longer-term future. These two problems should not be treated the same:

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Wednesday, November 12, 2008 - 2:24 PM

Even though my job as Policy Director means I spend a fair amount of time sitting at my desk and staring at my computer, I also get to play "in the field" giving chart talks or running budget exercises. Earlier this month, I conducted a "Principles and Priorities" exercise at American University, and had a a wonderful "teaching moment" where I was able to link the hypothetical budget simulation to perhaps the primary fiscal policy debate that will surround President-Elect Obama as his administration sets their priorities.

In the exercise, students divide into groups and act like special congressional committees designated with making budget choices. They pick choices in four areas: domestic discretionary spending, defense and national security spending, taxes and revenues, and entitlements. Groups can either cut programs or increase taxes to reduce the deficit, or spend more on programs they consider important, or cut taxes to increase the deficit. At the beginning of the exercise they are supposed to develop a target goal for the deficit and by the end they add up their choices to see how they did. Because we are an organization that stresses fiscal responsibility, the students tend to think the more they can do to lower the...

Wednesday, October 29, 2008 - 12:41 PM

There is a good article in the New York Times today, as part of their "If Elected..." series, that tries valiantly to add up the candidates' taxing and spending promises with an emphasis on their deficit implications. As a budget policy analyst, I know how tough such a task is during an election campaign, and empathize with any reporter who attempts to do so.

What I try to keep remembering to tell members of the media as I go through the numbers with them, is that the numbers are certain to change, and the candidates and their advisors know that, but what really matters is the commitment to fiscal responsibility once in office and what flexibility they have left themselves with, after the campaign ends, to alter their plans. 

Sometimes plans change because campaigns are two-year long processes, and the plans a candidate designed at the beginning, might no longer be what can be written into legislation and enacted once the campaign ends. I think that has clearly happened in the last couple months with the crisis in the financial markets.

Unfortunately, more often than...

Wednesday, October 22, 2008 - 12:45 PM

Today, the Concord Coalition released our second issue brief during the general election. In this one, called “Fiscal Policy Beyond Election Day: Nine Challenges for ’09," we discuss how the reality of the nation’s current economic and fiscal transformation will affect the plans the presidential candidates have developed. Additionally, we propose that recent events, and the unrealsitic nature of the plans even before the financial crisis required massive government intervention, will require whoever becomes president to re-prioritize to fit current circumstances and to improve the well-being of future generations.

Our first issue brief looked more closely at the specifics of the candidate's taxing and spending plans and how by accepting currently policy trends as the baseline by which their plans should be judged, they were setting lower expectations for themselves than they should, and certainly lower expectations than the American public should...

Monday, October 20, 2008 - 10:29 PM

Executive Director Bob Bixby is quoted in a good article on Time Magazine's web site about the growing budget deficit, where he argues that the rising deficit, and some of the most recent policy actions that have contributed to it, are "necessary evils" to keep the economy afloat as long as the actions are targeted and temporary.

What also stuck out, was the nice picture of the National Debt Clock in Times Square (probably the most famous "tabulation" related to Concord's mission). You can see more about the debt clock, and the family behind it, in the movie I.O.U.S.A.. The picture however, shows something you won't see in the movie. Since filming, the national debt has moved from $8.6 trillion to over $10 trillion, meaning they had to paint a dollar sign onto the clock to make room for the 14th digit. There is always hope though, this debt clock does have the capability to go backwards (the one in use in the 1980's and 1990's did not). Let's hope we can test that ability out someday.

--Josh Gordon

Monday, October 20, 2008 - 6:01 PM

Our Executive Director, Bob Bixby, recently participated in an online discussion on the "National Journal's Expert Blogs" focused on whether there is room for fiscal stimulus in the budget, given the extraordinary change in the fiscal position of the government due to the economic downturn and the government's already unprecedented response. Here is his post:

"Yes, there is room for fiscal stimulus -- so long as it sticks to the principles of being timely, targeted and temporary. What we don’t have room for are permanent new policies, either on the spending or tax side, that aren’t paid for. While the very real threat of a serious and lengthy recession justifies deficit-financed stimulus in the near-term, we need to keep in mind that our underlying fiscal policy is already on an unsustainable track. Treating the short-term problem should do as little harm as possible to the long-term outlook. Economically speaking, we need to walk and chew gum at the same time.

The goal of additional fiscal stimulus is to boost consumption and avoid a deep recession. Since...