September 10, 2010

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President Obama's Fiscal Policy

Wednesday, November 12, 2008 - 2:24 PM

Even though my job as Policy Director means I spend a fair amount of time sitting at my desk and staring at my computer, I also get to play "in the field" giving chart talks or running budget exercises. Earlier this month, I conducted a "Principles and Priorities" exercise at American University, and had a a wonderful "teaching moment" where I was able to link the hypothetical budget simulation to perhaps the primary fiscal policy debate that will surround President-Elect Obama as his administration sets their priorities.

In the exercise, students divide into groups and act like special congressional committees designated with making budget choices. They pick choices in four areas: domestic discretionary spending, defense and national security spending, taxes and revenues, and entitlements. Groups can either cut programs or increase taxes to reduce the deficit, or spend more on programs they consider important, or cut taxes to increase the deficit. At the beginning of the exercise they are supposed to develop a target goal for the deficit and by the end they add up their choices to see how they did. Because we are an organization that stresses fiscal responsibility, the students tend to think the more they can do to lower the...

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Congratulations to President-Elect Obama
Wednesday, November 5, 2008 - 1:30 PM

The Concord Coalition congratulates Barack Obama on his victory in the presidential election. As we detailed in a recent issue brief, the challenges he faces are formidable. Let's hope that after a campaign lasting nearly two years, politicians, the public and the media will now turn to the crucial business of governing. On fiscal policy, it will help to suspend partisan preconceptions and focus instead on practical problem solving. Inevitably, there will be differences on the appropriate level of spending, taxes, and debt. However, these differences should be engaged in a spirit of cooperation and mutual respect with a healthy dose of fact-based analysis.

Three issues stand out: the economic downturn, the financial sector crisis and the federal budget's long-term unsustainability. While there are linkages among these issues--most specifically the debt increase all three portend--they represent different ailments and should thus be treated with different remedies. The Obama Administration will need to calibrate fiscal policy to accommodate these differences. Short-term stimulus need not and should not increase the long-term structural deficit, just as reducing the long-term...

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Adding Up the Candidates' Plans
Wednesday, October 29, 2008 - 12:41 PM

There is a good article in the New York Times today, as part of their "If Elected..." series, that tries valiantly to add up the candidates' taxing and spending promises with an emphasis on their deficit implications. As a budget policy analyst, I know how tough such a task is during an election campaign, and empathize with any reporter who attempts to do so.

What I try to keep remembering to tell members of the media as I go through the numbers with them, is that the numbers are certain to change, and the candidates and their advisors know that, but what really matters is the commitment to fiscal responsibility once in office and what flexibility they have left themselves with, after the campaign ends, to alter their plans. 

Sometimes plans change because campaigns are two-year long processes, and the plans a candidate designed at the beginning, might no longer be what can be written into legislation and enacted once the campaign ends. I think that has clearly happened in the last couple months with the crisis in the financial markets.

Unfortunately, more often than...

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Fiscal Challenges for the Next President
Wednesday, October 22, 2008 - 12:45 PM

Today, the Concord Coalition released our second issue brief during the general election. In this one, called “Fiscal Policy Beyond Election Day: Nine Challenges for ’09," we discuss how the reality of the nation’s current economic and fiscal transformation will affect the plans the presidential candidates have developed. Additionally, we propose that recent events, and the unrealsitic nature of the plans even before the financial crisis required massive government intervention, will require whoever becomes president to re-prioritize to fit current circumstances and to improve the well-being of future generations.

Our first issue brief looked more closely at the specifics of the candidate's taxing and spending plans and how by accepting currently policy trends as the baseline by which their plans should be judged, they were setting lower expectations for themselves than they should, and certainly lower expectations than the American public should...

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