November 21, 2014

CONCORD COALITION SAYS HOUSE AND SENATE BUDGET PLANS SET THE RIGHT GOAL BUT CHART AN IMPLAUSIBLE COURSE

WASHINGTON -- As the House and Senate begin debating their respective versions of the fiscal year 2004 budget resolution, The Concord Coalition today praised Budget Committee Chairmen Jim Nussle (R-IA) and Don Nickles (R-OK) for reaffirming the balanced budget goal, but said the respective courses they have charted for achieving that goal are not plausible.

“The fact that Congressional leaders have rallied to the balanced budget goal is a very positive development. It demonstrates their understanding that over the long-term, deficits threaten our future standard of living, and that without balance as a clear fiscal policy goal deficits can quickly spiral out of control. Yet, reaffirming the balanced budget goal is only the first step in actually making it happen. To be effective, a balanced budget plan must also be credible. Unfortunately, the House and Senate plans don't measure up. They simultaneously cut taxes, promise a Medicare prescription drug benefit, ignore the impending cost of war, and assume a level of discretionary spending that is unrealistically tight, particularly over a 10-year time frame. Neither plan charts a plausible course back to balance, and in that sense they are more rhetorical exercises than realistic budgeting,” said Concord Coalition executive director Robert Bixby.

“Given the deficit we already have, the deficits that we can reasonably expect in the near future, and the potentially huge cost of war and its aftermath in Iraq, it is far from credible to begin a ‘balanced budget' plan with another substantial and permanent tax cut. It is even less credible to do so when combined with a very costly new entitlement for prescription drug coverage,” Bixby said.

“Chairman Nussle deserves great credit for insisting that cuts in so-called ‘mandatory' spending should be on the table. No category of the budget should be exempt from scrutiny. However, Chairman Nussle's politically courageous call for tough choices on entitlement programs is inconsistent with the inclusion of a new $1.4 trillion tax cut in the budget resolution. Spending cuts are difficult enough to achieve, and with the tax cut, much deeper spending cuts are needed than would otherwise be required to bring the budget back into balance. It is akin to driving from New York to Boston by way of Pittsburgh,” said Concord's National Field Director Harry Zeeve.

“While some might think of this as a clever way to control government spending by ‘starving the beast,' the far more likely result is that the tax cuts will be enacted and the spending cuts will never happen. Meanwhile, the deficit beast will grow fatter at the expense of future generations. The only credible way to offset large tax cuts with difficult spending reductions is to require that the spending reductions come first, which neither budget plan does,” said Zeeve.

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