WASHINGTON -- The Concord Coalition today applauded the call by President Obama to begin high-level, bipartisan negotiations on a comprehensive plan to tackle federal deficits and the country’s long-term fiscal challenges. While there is still a big gap in specificity on the policies necessary to achieve a stable fiscal path, hopefully the negotiators can build on the Senate’s current good faith effort to devise a balanced legislative package.
“The President’s call for a concrete plan to stabilize the debt-to-GDP ratio, and for such a plan to be agreed upon by the end of June, is an important addition to the current debate over fiscal issues in Washington. It returns the policy discussion to the hard-fought, bipartisan agreement on principles laid out by the President’s own fiscal commission in December,” said Robert L. Bixby, Concord’s executive director.
The administration’s framework calls for both spending cuts and tax increases to achieve $4 trillion in deficit reduction over 12 years, as well as a “debt fail-safe trigger” that would require across-the-board spending cuts and tax expenditure reductions.
“While triggers for across-the-board cuts can be important for enforcing budget agreements, policymakers need to be careful to not exempt large portions of the budget from cuts. They also need to be mindful that simply setting spending targets, without specifying how to get there, is a recipe for deficit reductions on paper without the political consensus on the policies necessary to achieve them. The new austere targets for the Independent Payment Advisory Board in Medicare are a noteworthy example -- the problem with the cost controls in the health care reform law is not the level of assumed savings, but the political risk that those targets will be ignored or difficult to sustain,” Bixby said.