The Concord
Coalition said today that President Obama’s pledge to cut the deficit in half
by 2013 is a positive and achievable goal but warned that it would still leave
the nation on an unsustainable fiscal path. Concord praised the administration
for improving transparency in the budget by using realistic policy projections
and specifying several offsets for new initiatives. It warned, however, that
spending cuts and tax increases used to fund new initiatives would no longer be
available to close the existing long-term budget gap.
The Concord
Coalition said today that President Obama’s pledge to cut the deficit in half
by 2013 is a positive and achievable goal but warned that it would still leave
the nation on an unsustainable fiscal path. Concord praised the administration
for improving transparency in the budget by using realistic policy projections
and specifying several offsets for new initiatives. It warned, however, that
spending cuts and tax increases used to fund new initiatives would no longer be
available to close the existing long-term budget gap.
"This
budget clearly demonstrates that very difficult choices must be made to bring
the deficit under control. Even with a strong and rapid economic recovery, a
substantial reduction in troops deployed in Iraq and revenue gains from
expiring tax cuts, the budget is still deep in red ink in 2013 and the debt is
still growing faster than the economy. Any effort to permanently improve the
fiscal outlook beyond the 10-year budget window will require more fundamentally
addressing the structural causes of our budget imbalance — demographic change
and rising health care costs," said Robert Bixby, executive director of The
Concord Coalition.
While
the concept of revenue neutrality and pay-as-you-go budgeting is highlighted in
the budget, the administration does not apply paygo principles to extension of
the 2001 and 2003 tax cuts–a rather large exception. Not paying for these tax
cuts leads to an additional $2 trillion in deficits over 10 years, not
including additional debt service costs.
Constructively,
the budget identifies spending cuts and tax increases–some of the hard choices
that will be required to fund the administration’s new priorities. Most
notably, the budget contains a health care reserve fund designed to enforce a
deficit-neutral plan for health care reform. Following through on the offsets
required to pay for health care reform will be politically difficult, yet
essential, to achieve President Obama’s deficit reduction goals. More
importantly, additional hard choices regarding health care reform will be
necessary to accomplish the administration’s essential longer-term goal of
"bending the curve" of unsustainable health care costs.
"As
the president said in his address to Congress, we have a responsibility not to
pass on to our children a level of debt they cannot afford. This budget
recognizes that we cannot achieve that goal without substantially changing
course from the current fiscal path. Such change can only come through public
engagement, shared sacrifice and a bipartisan willingness to consider all
options," Bixby said.
###
The
Concord Coalition is a nonpartisan, grassroots organization dedicated to
balanced federal budgets and generationally responsible fiscal policy. Former
U.S. Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord’s
co-chairs and former Secretary of Commerce Peter Peterson serves as president.
CONTACT:
Jonathan DeWald
(703) 894-6222
[email protected]
