September 30, 2014

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Monday, November 22, 2010 - 4:23 PM

When a panel of fiscal experts took the stage at The Concord Coalition’s annual Economic Patriots Dinner last week, nobody was expecting a lot of happy talk about the federal debt. But the immediate sense of urgency may have caught some listeners off-guard, with one panelist -- Robert Rubin, former Treasury secretary -- warning about a possible “implosion” if large numbers of investors suddenly lost confidence in the United States.

The panel members did not sound particularly optimistic that elected officials would take appropriate action anytime soon, although Sen. Kent Conrad did see a “glimmer of hope” that President Obama’s bipartisan fiscal commission could produce recommendations backed by the required 14 of its 18 members.

Conrad, chairman of the Senate Budget Committee, received Concord’s annual Paul E. Tsongas Economic Patriot Award at the dinner Tuesday in New York. Other panel members were Concord Co-Chairman Bob Kerrey and David Walker, CEO of the Comeback America Initiative. Peter G. Peterson, Concord’s founding president, served as moderator.

“We are on the cusp of real danger and real risk,” Conrad warned. He worried that the rapidly growing federal debt could at some point not only hurt economic growth but cause a “severe break” in the value of the dollar. Rubin echoed his concern.

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Thursday, November 11, 2010 - 3:07 PM

The problem with campaign rhetoric is that you’re stuck with it if you win.

The danger is that people might just believe you can really do all the wondrous things you promise and if you don’t deliver, they get angry. That, in part, helps to explain what happened to President Obama and congressional Democrats last week.

Now, it’s the Republicans’ turn to see if they can live up to their campaign rhetoric. On the fiscal front, they have set a very high bar for themselves.

Republicans campaigned on a written pledge to put the nation on a path to a balanced budget by cutting spending and not raising taxes.

It is easy to see the political appeal in that promise. Most people think the deficit is too big and that the federal government spends too much. Very few want to see their taxes go up.

The problem with the Republicans’ pledge is that the numbers don’t add up.

Forget ideology and just look at the projections. Last year’s deficit came in at $1.3 trillion. This year, the nonpartisan Congressional Budget Office (CBO) projects a deficit of $1.1 trillion. Beyond then, CBO projects 10-year deficits totaling $6.2 trillion.   

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Monday, November 1, 2010 - 12:15 PM

By the end of the week, the political landscape in Washington will have changed. We will have a new Congress and attention will quickly turn to the 2012 presidential contest.

Yet, regardless of who ends up in charge of Congress, or who begins making frequent trips to Iowa and New Hampshire, certain facts will remain the same.

Health care costs, including Medicare and Medicaid, will still be growing faster than the economy. Social Security will still promise more benefits than it can pay under current law. We’ll still be fighting two wars. The costs of extending all the expiring 2001 and 2003 tax cuts will still top $4 trillion. The economy will still be stagnant. And for all these reasons, the debt will still be on an unsustainable track.

Welcome to Washington, 112th Congress. The nation awaits your solutions to these continuing threats.

Not since 1992, when independent presidential candidate Ross Perot captured 19 percent of the popular vote, has fiscal policy been such a dominant issue in a national election. Voters are clearly uneasy with trillion dollar deficits and a growing debt that is on track to reach World War II levels over the next decade.

As retiring...

Tuesday, October 19, 2010 - 9:27 AM

As the chair of The Concord Coalition’s Youth Advisory Board, I am always looking for opportunities to highlight why issues of fiscal sustainability and entitlement reform most significantly impact today’s young Americans and future generations. So when Sara Imhof, Concord’s Midwest field director, asked me to speak on a panel with Congressman Paul Ryan and former SEIU President Andy Stern, two members of the President Obama’s fiscal commission, I jumped at the chance.

Prior to the Oct. 12 event, I was fortunate to share a ride with Mr. Stern, and had a few minutes with both him and Congressman Ryan, hearing their perspectives and sharing some of my own. That includes my hope that the commission will use the opportunity in December, when it releases its findings, at least in part as a teaching moment -- an opportunity to shine a light on our nation’s unsustainable fiscal path, the facts of which are undisputed by both major political parties.

I was encouraged to hear Congressman Ryan and Mr. Stern acknowledge not only the gravity of the situation we face, but also the critical need for an “adult” conversation about our policy options going forward.

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Saturday, October 16, 2010 - 11:20 PM

The Social Security Administration announced on Friday that for the second year in a row there would be no cost-of-living increase in Social Security benefits for 2011.  Why not?  As the SSA explains, this is a straightforward, non-political determination based on historical economic data:

The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a cost-of-living adjustment (COLA) was determined to the third quarter of the current year.

Very objectively, there will be no cost-of-living increase in Social Security benefits in 2011 because there was no increase in the cost of living, as measured by the CPI-W, from the 3rd quarter of 2008 (the last time a COLA was triggered, for 2009 benefits) to the 3rd quarter of 2010.  The latest data on consumer prices from the Bureau of Labor Statistics show that the...

Monday, October 4, 2010 - 10:33 AM

Fiscal Year 2010 ended last Thursday but no one was popping champagne corks. Little wonder. For the second year in a row, the federal government ran a budget deficit well in excess of one trillion dollars.

Final figures will be announced later this month, but it seems likely that the FY 2010 deficit was about $1.3 trillion or 9 percent of gross domestic product (GDP). Regardless of the exact number, there is little doubt that the deficit will be the second largest as a share of GDP since the end of World War II. If there is any good news in this, it is that the deficit came down from the previous year’s total, which at $1.4 trillion (9.9 percent of GDP) was the largest of the post-WWII era.

This might not be as bad as it sounds if the deficit were projected to shrink as the economy recovers. After all, much of the huge spike in red ink can be attributed to reduced revenues and higher spending caused by the recent recession and attempts to deal with it. As these factors fade, the deficit will come down. However, projections for the next several years don’t get much better.

As the new fiscal year began on Friday, the most recent projection by the Congressional Budget Office (CBO) showed a deficit of $1.1 trillion for this fiscal year and cumulative deficits of $6.2 trillion over the coming decade. That,...

Monday, October 4, 2010 - 8:49 AM

In an op-ed article on Sept. 26 in the Des Moines Register, I pointed out that “…regardless of age, socio-economic status or political ideology, we are all affected by inefficiencies in our health system, irresponsible tax and spending policies in Washington, and snowballing government debt.”

I urged average citizens to become more engaged in the search for solutions to our fiscal and economic challenges: “Getting involved is the right thing to do. If we don't take action, who will?”

Well, last week Des Moines rose to the challenge, and then some. People there demonstrated the interest and personal involvement that can help our nation move onto a better, more responsible course. Over the course of 24 hours, about 1200 people in the Des Moines area turned out for events – presented by The Concord Coalition and its partners – that included a health care conference, Rotary Club and Ray Society programs, the Kelly Insurance Center conference and the marquee Fiscal Solutions Tour program at Drake University.

As Concord’s Midwest field director, I appreciate everyone who came out to join us. The civic engagement was fantastic; we had questions and comments from people of all ages and backgrounds. This generated lively discussions that focused on improving social security and health care, specifically, and...

Wednesday, September 29, 2010 - 2:24 PM

When Congress soon leaves the Capitol for the campaign trail, a long list of unfinished business will likely be left behind. This year will mark the first year since the modern budget process was created in 1974 that no budget resolution has been passed by either the House or the Senate. Of the twelve appropriations bills necessary to fund the federal government during the coming year, Congress has not enacted one of them. To avoid a government shutdown, Congress will need to pass a continuing resolution this week. 

If this breakdown of the budget process were not discouraging enough, there now appears to be a possibility that the Senate could leave without confirming the President's nomination of Jack Lew to head the Office of Management and Budget. The two Senate committees with jurisdiction over the nomination held public hearings and promptly approved the nomination with decisive bipartisan votes. The Budget Committee approved the nomination by a vote of ...

Monday, September 27, 2010 - 4:50 PM

Last week, House Republicans offered a “Pledge To America” outlining their fiscal priorities and reform ideas. As with most such campaign manifestos, it is long on base-pleasing rhetoric and short on troublesome details.

The document correctly warns about the dire fiscal outlook and the potential dangers of escalating deficits and debt. Conspicuously missing from the Pledge, however, is any plan to bring deficits down to a sustainable level or even to improve upon the deficit projections in the President’s budget. It is worth noting that such a plan has also been missing from Congressional Democrats this year because Congress has failed to pass a budget resolution.

The net effect of the Pledge policies would do very little, if anything, to rein in our long-term structural budget deficits and may well lead to deficits even higher than under the President’s budget.

Not only would the Republicans cut taxes by more than the President, but they would spend more on defense and repeal cost-saving provisions in this year’s health care reform legislation. In theory, lower spending on non-defense discretionary programs would offset some of this. But savings from discretionary programs, which must be enacted on an annual basis, are far less certain than savings from entitlement reforms or tax increases, which operate...

Monday, September 20, 2010 - 10:10 AM

Below are several developments we have been following since the last edition of the Washington Budget Report (sign up here) was published.


FY 2011 REGULAR APPROPRIATIONS: 
With less than two weeks remaining before the beginning of the new fiscal year, Congress has not passed a budget resolution or enacted a single appropriations bill for the coming year.   The House has passed a deeming resolution which could be used to pass the appropriations bills, though the Senate has not passed a similar measure.  Last week the Senate Appropriations Committee completed action on the legislative branch and defense bills. ...