WASHINGTON — The Concord
Coalition today released a new Report on Fiscal Responsibility entitled “Lack
of Action On Deficit Signals Undue Complacency.” (Requires
WASHINGTON — The Concord
Coalition today released a new Report on Fiscal Responsibility entitled “Lack
of Action On Deficit Signals Undue Complacency.” (Requires
Adobe Acrobat Reader)
This report grades Congress and the Administration on the choices that they make
– or fail to make – in promoting fiscal responsibility and paving a long-term
sustainable path for entitlement spending.
“The budget deficit continues to ratchet upward and there is no consensus on
what, if anything, to do about it. At best, Washington policymakers seem content
to tread water in the rising tide of red ink. At worst, they are cynically
professing concern about the deficit while pursuing tax and spending policies
they know will only dig the fiscal hole deeper. One thing is clear: specific
plans to actually reduce the deficit are not on the agenda. Such complacency is
not warranted,” said The Concord Coalition.
“Earlier this year, the Congressional Budget Office (CBO) projected a fiscal
year 2004 deficit of $477 billion. Since then, however, revenue growth has been
stronger than expected and the actual deficit for 2004 will likely be closer to
the $445 billion deficit that the Bush administration (OMB) now projects. Does
that mean that current policies are bringing the deficit down? No. For one
thing, the deficit is going up, not down. It is true that when CBO issues its
next forecast, the projected deficit will be lower than it was–just as the OMB’s
projected deficit has declined since February. What matters, however, is the
bottom line and there can be no denying that a deficit of $445 billion, or close
to it, is considerably larger than last year’s deficit of $375 billion.
“The President’s budget claims to cut the deficit in half over five years but
omits the likely cost of ongoing military operations in Iraq and Afghanistan,
assumes a freeze on non-security appropriations and pretends that relief from
the growing alternative minimum tax will be temporary. Moreover, its 5-year
window ignores the 10-year revenue loss of making the President’s tax cuts
permanent. In Congress, deficit reduction talk has produced actions that only
make it more difficult to close the gap.
“Washington has been consumed this year with reports of intelligence failures
leading up to the September 11 attacks and the war in Iraq. Many have concluded
that the official agencies entrusted with giving policymakers timely warnings
about developing problems failed in that mission. No such charge can be leveled
against those who are entrusted to provide warnings about our fiscal future.
Here, the warnings have been timely, loud, and clear. Any ‘intelligence failure’
rests squarely with policymakers who hear the warnings and choose to ignore
them.
“The deficit cannot be dismissed as a self-correcting problem. Even assuming
strong economic growth, plausible projections for the 10-year outlook show
deficits of about $5 trillion. The longer-term outlook is worse. If policymakers
want to get out of this hole, they’re going to have to stop digging and start
climbing. Deficits matter.”
The following is a summary of Concord’s Report on Fiscal Responsibility:
|
CATEGORY |
GRADE |
COMMENTS |
|
|
D |
Fiscal policy this year has featured
|
|
|
|
In the |
|
|
|
The ten-year |
|
|
|
With the |
The full text of The Concord Coalition’s Report on Fiscal
Responsibility is available online:
/fedbudget/old-doc/040730fiscresponrpt.pdf
(Requires
Adobe Acrobat Reader)
The Concord
Coalition is a nonpartisan, grassroots organization dedicated to balanced
federal budgets and generationally responsible fiscal policy. Concord’s
co-chairs are former Senators Warren B. Rudman (R-N.H.) and Bob Kerrey (D- Ne.).
Former Commerce Secretary Peter G. Peterson serves as President of The Concord
Coalition.
###
