September 3, 2014

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Friday, December 28, 2012 - 4:08 PM

For the third week in a row, I will be discussing the nation’s fiscal challenges on C-SPAN’s Washington Journal, this Sunday at 7:45 a.m. (Here is the first week, and here is the second.) Stan Collender, who among other things writes the Fiscal Fitness column in Roll Call and the Capital Gains and Games blog, will again be my co-panelist.

One thing that might help you get ready for another fun hour of viewing would be to play The Concord Coalition’s budget exercises to see how you would replace the fiscal cliff.

Our online exercise, The Federal Budget Challenge, is a great single-player experience. If you want fun for the whole family gathered for the holidays, you can print out our pen-and-paper exercise Principles and Priorities. In either case...

Tuesday, November 27, 2012 - 11:50 AM

The long-standing impasse on tax policy has basically boiled down to this: Democrats want more revenue, raised entirely from households with incomes over $250,000. Republicans don’t want any new revenue, and especially not from higher tax rates on the rich. It seems like an irreconcilable difference.

But if you get beyond the predicable partisan rhetoric there is room for optimism that a deal can be reached.

Republicans have begun to shed their single-minded devotion to anti-tax advocate Grover Norquist’s “no new taxes pledge”. Notable examples are Senators Bob Corker (R-TN), Saxby Chambliss (R-GA) and Lindsey Graham (R-SC) along with Representative Peter King (R-NY).

Many Republicans aren’t so enamored with Grover’s “no new taxes” pledge these days, because they don’t agree with the “no new revenue” interpretation. These Republicans recognize the economic difference between raising revenue by raising marginal tax rates, and raising revenue by broadening the tax base and reducing “tax expenditures”– the subsidies in the tax code. The former increases the size and influence of government; the latter reduces it.

For any Republican who feels the same way that Corker, Chambliss, Graham and King do, the common ground they share with the Obama administration on tax policy and...

Monday, November 19, 2012 - 11:50 AM

Signals from the first post-election budget meeting between the President and congressional leaders, which took place at the White House on Friday, were very good.

Congressional leaders of both parties appeared together after the meeting. There were no lines in the sand, no threats, and no impugning each other’s motives.

Beyond the low bar of politeness, President Obama and his guests appeared to be focused on the right priority -- achieving a long-term fiscal plan and not just a quick fix to the immediate pressure of the “fiscal cliff.”  

They spoke of a two-step process with a down payment on deficit reduction this year while putting together a framework for a long-term deal to be enacted next year along with a credible back-up mechanism -- more credible than a new cliff -- in case Congress fails to act. That basic approach has been recommended by many outside observers, including The Concord Coalition.  

Topping off the pre-Thanksgiving cheer was that a consensus seems to have been reached on the fundamental point that everything must be on the table, including revenues and entitlement spending.

We're still far from a long-term “grand bargain,” let alone a way around the fiscal cliff, but this is an essential starting point for fruitful negotiations.

Whether the...

Monday, November 12, 2012 - 1:00 AM

Example isn’t the main thing in influencing others – it is the only thing. – Albert Schweitzer

Increasingly alarmed by the nation’s deteriorating fiscal outlook and the failure of our political system to produce timely, common sense solutions, some state officials have begun to show leadership. They can do much more.

This year, the United States Conference of Mayors and the two leading associations of state legislators issued compelling resolutions that urge action by their federal counterparts. 

In September the mayors called for “a bipartisan and balanced approach to deficit reduction by incorporating spending cuts with additional revenue from sources such as tax code reform and closing unfair corporate tax loopholes.” In October the mayors reiterated their call for “a balanced plan for recovery that has the potential to restore the confidence of our people, and the world, in the leadership of our national government.”

The bipartisan Council of State Governments-West unanimously passed a resolution at its annual meeting in July urging Congress “...

Wednesday, November 7, 2012 - 11:01 AM

Congratulations to the Election Day winners. So what do Tuesday's results mean for the fiscal outlook?

Think of it this way.

If the country is on an unsustainable fiscal path, which it is, and if continued partisan bickering will not solve this problem, which it won’t, and if divided government has been re-elected, which it has, then the only choices are calamity or compromise.

The Concord Coalition urges compromise.

That must begin immediately as the two parties negotiate a responsible alternative to the “fiscal cliff” – a combination of tax increases and spending cuts that will hit with such suddenness that it could throw the still-fragile economy back into recession.

But they can’t just kick the can down the road -- again. The year-end fiscal cliff is bad, but eventually we will need the longer-term deficit reduction produced by the policies comprising the fiscal cliff. It just needs to be phased-in in a more rational way, as proposed by the bipartisan Simpson-Bowles and Domenici-Rivlin recommendations.

The key is to agree on a process for dealing with the serious and structural imbalance between spending and taxes that, if left on autopilot, will damage the economy, stress the social safety net, diminish our world leadership and leave future generations saddled with a debt burden...

Monday, October 1, 2012 - 10:04 PM

The latest version of our budget game, the Federal Budget Challenge, has been online for only two weeks, yet has been played by over 5,000 people from almost half of the states in the nation. The Challenge lets players examine over 50 different policy choices, along with their budgetary impacts over 10 years, and decide for themselves whether and how they would reduce the nation’s budget deficits.

The new version, built with our partners from the California-based non-profit Next 10, is now touch-screen playable and has built-in integration with Twitter and Facebook. Like the previous version, as well as the group exercises it was based on -- Principles and Priorities and Debt Busters -- the Challenge offers the opportunity to learn about many of the public policy options being debated in Washington, along with arguments for and against each choice.

The choices already being made by players are quite interesting in that the least and most popular selections are deeply intertwined with the political brinksmanship threatening to push the nation into economic turmoil with the looming “fiscal cliff” at the end of December. 

The most unpopular choice is the policy...

Friday, August 10, 2012 - 2:05 PM

Congressional procrastination could lead to chaotic decision-making on the federal budget after the November elections, but many economists believe this procrastination is already harming the economy.

The damage stems from widespread uncertainty over what elected officials will do, if anything, about the “fiscal cliff” – a combination of sharp “automatic” spending cuts and the scheduled expiration of tax cuts at year’s end.

The Wall Street Journal reported today on its survey of 47 economists, noting their widespread concern about the growing economic cost of congressional inaction. This “adds insult to injury to an economy already flirting with a stall rate,” said Diane Swonk of Mesirow Financial. Another analyst, Julia Coronado of BNP Paribas, said: “We are already feeling the effects in hiring and investment.”

The general expectation in Washington is that elected officials will not take action on the fiscal cliff until after the elections, despite encouragement throughout much of this year from The Concord Coalition and many other analysts and groups to work out a bipartisan action plan as soon as possible.

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Thursday, August 9, 2012 - 9:10 AM

Beginning in January, approximately $109 billion in across-the-board spending cuts are scheduled to automatically take effect. Known in budget policy circles as a “sequester,” these cuts are unusual in that the executive branch directs how the spending cuts occur, as opposed to the traditional locus for such cuts -- the congressional Appropriations Committees.

Because this sequester could have such a dramatic impact on many federal programs and the economy in general, Congress is eagerly awaiting specifics about how the administration plans to implement the cuts. On Tuesday President Obama signed the Sequestration Transparency Act, which requires him and the Office of Management and Budget to put forth a report in 30 days on how a sequester would be implemented. An overwhelming House majority passed the legislation last month, and the Senate approved it unanimously.

Sequesters have been part of the budget process for decades. Were this sequester to go into effect, however, it would be among the few that have ever actually taken place in this country’s history, and would certainly have the greatest budgetary effect.

The sequester was initially intended as a “Sword of Damocles” over the “super committee” created by the August 2011 deal to raise the debt limit. It was not actually designed to take effect;...

Wednesday, August 1, 2012 - 6:04 PM

Rep. Steven LaTourette’s announcement this week that he will not seek re-election underscores the difficulties that face elected officials who try to take a constructive, bipartisan approach to dealing with the nation’s most important challenges – notably the need for fundamental fiscal reforms.

“For a long time now, words like compromise have been considered to be dirty words,” the Republican said in a press conference in his Ohio district Tuesday. “And there are people on the right and the left who think that if you compromise you’re a coward . . . . you’re an appeaser.”

LaTourette, who has served in the House since 1995, has built a reputation as a moderate who seeks bipartisan compromise and is willing to challenge members of his own party when he feels they are taking less constructive positions. His frustration, echoed by many other moderates in Washington, should serve as a warning to American voters that partisanship and political intransigence are clouding the country’s future.

That’s particularly true in fiscal policy, as LaTourette indicated in his press conference. He understands the need for sweeping changes to put the federal budget on a more responsible and sustainable course, as recommended by an array of bipartisan groups, including...

Tuesday, July 17, 2012 - 12:52 PM

Today Concord Coalition Co-Chair Sam Nunn, a former U.S. senator from Georgia, helped launch the Campaign to Fix the Debt.  This project is a non-partisan initiative to put America on a better fiscal and economic path.  Nunn is a member of the campaign's steering committee.  

In advance of the campaign's launch, Nunn said:

"On fiscal matters, neither political party can impose its will on the other, and that it is not likely to change after the election.  Successfully tackling our fiscal challenges requires Members of Congress to come together across party lines with a balanced plan that will strengthen the economy, reassure markets, and save future generations from an unbearable debt burden.  There are good people across the political spectrum who recognize this in putting together the Simpson  – Bowles and the Domenici  – Rivlin plans.  There are many Members of Congress who are willing to work together, but they get hit hard from both sides and need a foundation of citizen support.  The Campaign to Fix the Debt hopes to give these folks in Washington, DC and across the country the support they need to work together to put our nation's interest above political parties and to strengthen America to protect our children's...