October 2, 2014

CONCORD COALITION URGES REALISTIC SURPLUS PROJECTIONS IN FY2001 BUDGET NEGOTIATIONS

WASHINGTON -- The Concord Coalition today urged Congress and the Administration to maintain their laudable goal of balancing the budget without tapping into the Social Security surplus, but warned against making policy decisions based on unrealistic surplus projections that assume strict adherence to the discretionary spending caps enacted in 1997. 

 

         With the fiscal year 2001 budget negotiations about to get underway, The Concord Coalition encouraged Congress and the Administration to observe the following guidelines in an issue brief entitled Fiscal Year 2000– One Good Goal and Too Many Gimmicks that was released today:

 

·         Maintain the good goal adopted last year of balancing the budget without using the Social Security surplus.  But do not scare people by suggesting that current benefits will be jeopardized if the goal isn't met. At the same time, do not lull people into believing that locking up the Social Security surplus is an adequate substitute for reform.

 

·         Acknowledge that the discretionary spending caps enacted in 1997 have been breached and should not be relied upon to estimate the size of future surpluses.  Unrealistic assumptions about discretionary spending produce unrealistic surplus projections, which in turn, produce fiscally irresponsible proposals to spend, or “give back” an illusory pot of gold.  In the end, this may be the most dangerous gimmick of all.

 

·         Agree on a new set of realistic spending caps and extend them out for another five years.  A realistic set of discretionary spending caps would minimize the need for accounting gimmicks, thus making the budget process more honest and transparent.  If Congress and the Administration want to spend more than they agreed upon in 1997, or if they believe that the much improved fiscal outlook since then has rendered the 1997 agreement obsolete, they should say so openly and negotiate a new agreement rather than spend a third year trying to get around their old agreement with gimmicks.

 

·         Resist the temptation to “pay for” tax cuts or entitlement expansions with projected non-Social Security surpluses.  The existence and size of any such surpluses is far too speculative to serve as a reliable source of financing for new permanent commitments.  For that reason, The Concord Coalition continues to believe that the highest priority for projected non-Social Security surpluses should be debt reduction.

 

·         Re-engage the issue of long-term entitlement reform, and build consensus around a plan that will put Social Security, Medicare, and other senior benefit programs on a sustainable path.  When all is said and done, this remains our nation's greatest fiscal challenge.  The sooner we get to it the better.

 

         The Concord Coalition was founded in 1992 by former Senator Warren Rudman (R-N.H.), the late Paul Tsongas, former Democratic Senator from Massachusetts, and former Secretary of Commerce Peter Peterson.  Former Senator Sam Nunn (D-Ga.) joined Rudman as co-chair of the organization in 1997.  The Concord Coalition is a nonpartisan, grass roots organization dedicated to balanced federal budgets and generationally responsible fiscal policy.