WASHINGTON — The Concord Coalition warned today that if
discretionary spending continues to grow at the same rate it has in recent years,
two-thirds of the projected 10-year non-Social Security surplus would disappear.
WASHINGTON — The Concord Coalition warned today that if
discretionary spending continues to grow at the same rate it has in recent years,
two-thirds of the projected 10-year non-Social Security surplus would disappear.
“There is a fiscal disconnect between Washington and the
campaign trail. While the presidential
candidates are fighting over what to do with a $2 trillion surplus, politicians back in
Washington are spending at a pace that would leave very little surplus to fight over. Either spending must be constrained, or our
expectations for the likely size of the surplus should be lowered. The fiscally responsible approach would be to do
both,” said Robert Bixby, Executive Director of The Concord Coalition.
The most widely used surplus projection
is the one prepared by the Congressional Budget Office (CBO), which assumes that
discretionary spending will grow no faster than the rate of inflation over the next 10
years ¾ less than 3
percent per year. But that assumption is at
odds with what has actually happened since budget surpluses replaced deficits in fiscal
year 1998. Starting that year and including
the likely level of spending planned for the current fiscal year (2001), discretionary
spending has gone up at an average annual rate of 5.5 percent.
If spending continues to increase at this rate,
rather than the rate assumed in the CBO baseline, it would reduce the non-Social Security
surplus by $1.4 trillion. Instead of
having a surplus of over $2 trillion, we would have a surplus of about $700 billion ¾ a good sum of
money but far less than the cost of the presidential candidates’ promises. For more details, check out Concord’s Current Trend Baseline
2001-2010, now available on-line. (Requires Adobe Acrobat Reader)
“Clearly it’s a lot more
difficult to hold spending to the rate of inflation, or below, when there is a surplus.
Assuming that the next Congress and the next President will be a lot more tight-fisted
with the surplus than the current Congress and the current President is simply not
realistic. Therefore, the surplus
projections which are based on that assumption aren’t realistic either,” Bixby
said.
The
Concord Coalition is a nonpartisan, grass roots organization dedicated to balanced federal
budgets and generationally responsible fiscal policy.
Former U.S. Senators Warren Rudman (R-N.H.) and Sam Nunn (D-Ga.) serve as
Concord’s co-chairs and former Secretary of Commerce Peter Peterson serves as
president. The organization does not endorse,
support or oppose candidates for public office or political parties.
