October 24, 2014

Americans Must Continue Pressing for Solutions to Long-Term Debt

In an op-ed for the San Jose Mercury News Joshua Gordon, policy director of The Concord Coalition, and Jason Peuquet, a research fellow with the Committee for a Responsible Federal Budget, discuss rising federal budget deficits in the coming years and urge the country to address the issue through meaningful bipartisan reform. The op-ed can also be found here.

This Friday, The Concord Coalition and the Fix The Debt Campaign will co-host a budget exercise with Rep. Anna Eshoo (D-Calif.) where participants will work in small groups to find ways to reduce the national debt. You can find more information on the event or reserve a seat here, or call Eshoo's office at (650) 323-2984.

Despite what you may hear from many members of Congress and the White House about falling deficits and the desire to focus on other issues, make no mistake -- our rising national debt remains a pressing concern.

In just a few years, the debt -- already quite high by historical standards -- is projected to rise as a share of our economy again and to continue doing so indefinitely after that. Having rising deficits and debt even after the economy recovers from the recession is very worrisome.

Such high federal debt will threaten the nation's economic future and reduce its ability to respond to national emergencies. For the people of San Jose, a rising debt would mean lower standards of living and financial instability while saddling their children and grandchildren with excessive government debt.

This is not a fringe concern; the consensus among economists and budget experts is that rising federal debt comes with serious risks.

The recovering economy, along with several steps taken by lawmakers, have reduced deficits over the past few years and will do so through next year. However, elected officials have promised heavy cuts to the part of the budget that invests in future economic growth and productivity.

And even these savings are dwarfed by the long-term budget shortfalls, which are driven by an aging population and retirement programs, health care costs and an outdated tax code. Unfortunately, few of the steps taken so far have addressed these larger problems.

Luckily, there are some encouraging opportunities both in Washington and California to put the conversation about unsustainable debt back on the agenda, along with some specific ideas on how to solve the problem.

Recently, Rep. Dave Camp, who leads the House committee that oversees the tax code, put forward a bold plan to reform individual and corporate taxes by reducing many "tax expenditures," or special provisions, deductions, etc., in the tax code that make it more complex and reduce revenue.

The president's budget also proposed policies to limit these tax expenditures. While neither plan is perfect, they are big steps forward.

On the spending side of the budget, Congress has been close to agreement on a bipartisan proposal to fix the broken formula that determines how Medicare pays doctors. This change would attempt to reward doctors for their patients' outcomes instead of the number of visits and procedures.

But lawmakers disagree on how to pay for the change. There are many ways to do so that could reduce health care costs over the long term. But there is a risk that Congress will again either resort to gimmicks or kick the problem down the road.

Many other pieces of the budget and tax code need to be examined to help put federal borrowing on a sustainable path. Many San Jose residents plan to join Rep. Anna Eshoo, The Concord Coalition and the Fix the Debt Campaign on Friday to do just that: examine all parts of the federal budget and decide on ways to reduce future borrowing.

Working in small groups, participants will consider possible changes in health care programs, Social Security, the tax code and many other federal programs.

The budget exercise will be held from 10:30 a.m. to noon Friday at the Campbell Community Center. For information and to reserve a seat, see eshoo.house.gov/federal-budget-workshop or call Eshoo's office at (650) 323-2984.

There is no perfect plan to reform the federal budget. But everyone will need to make some sacrifices. If the San Jose exercise succeeds, it could help point the way toward meaningful bipartisan compromises in Washington.