WASHINGTON - In response to today's release of new projections from the Office of Management and Budget (OMB) showing a substantial decrease in the expected federal budget surplus, The Concord Coalition urged Congress and the Bush Administration to maintain fiscal discipline by strictly adhering to the spending and tax levels set in the Fiscal Year 2002 Budget Resolution, and by refraining from making long-term commitments with projected surpluses that may never materialize.
“The shrinking surplus is a key test of fiscal discipline. In recent years, the booming economy allowed politicians to spend more than they budgeted and still end up with a big surplus. That fiscal nirvana has come to an end. Projected surpluses over the next few years have declined to the point where there is essentially nothing left for new initiatives - including more tax cuts - if Congress and the Administration want to make good on their fiscally responsible pledge to wall-off the Social Security surplus,” said Robert Bixby, Executive Director of the Concord Coalition.
“These numbers are also a sobering illustration of how quickly budget projections can change, and the risks of counting on large projected surpluses to ‘pay for' permanent new commitments, including tax cuts. At the beginning of the year, Congress and the President thought they were dealing with a much bigger surplus than it now turns out they have. Commitments were made than that may breach the line in the sand both parties drew at the Social Security surplus. The best way to avoid repeating that pattern in the future ¾ particularly in the last five years of the 10-year outlook when the projection is most uncertain ¾ is to exercise great caution in committing projected surpluses” 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.