September 15, 2014

A Mixed Bag on Deficit Reduction

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Will Congress be able to approve a plan this year to significantly reduce deficits over the coming decade? Just in time for Halloween last week, Concord Coalition Chief Economist Diane Lim Rogers wrote in a Tax Notes column about the “tricks and treats” that the bipartisan committee on deficit reduction had received.

On the negative side, she pointed out that some tax-writing lawmakers in both parties still want to keep certain tax and entitlement options off the negotiating table. Some lawmakers have continued to offer unrealistic projections about tax cuts, regulatory changes and economic growth.  And the budget committees “can’t seem to bring themselves around to saying they could be a big part of the solution,” Rogers writes.

On the “treats” side, however, the members of many congressional committees with jurisdiction over spending programs have acknowledged the need for significant cuts. Many have also made clear, Rogers says, that deficit reduction “will ultimately involve sacrifices from all of us.”

Finally, she sees reason for hope that “quiet, behind-the-scenes discussion” of bipartisan ideas may be able to take advantage of some common ground in areas like tax reform and improvements that could strengthen Social Security and Medicare.