While the President's press conference Wednesday night got a lot of attention and focused substantially on health care, he also did an interview with Washington Post editorial page editor Fred Hiatt earlier in the day. The wide-ranging interview touched on health care reform, but also on a lot of the other subjects Concord Coalition members are interested in -- like deficits, debt, Social Security reform and a BRAC-like fiscal commission. It is worth a read.
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Tuesday, May 26, 2009 - 3:29 PM
In Nobel-prize winning economist and New York Times columnist Paul Krugman's column Monday, he makes an interesting point about California's budget woes that supports much of what The Concord Coalition's message has been for the last three years traveling the country on the Fiscal Wake-Up Tour. The irony is that he often protests much of what we stand for.
In writing about the political barriers to sound fiscal policy and governance in California, he expresses concern that it "foreshadows the future of the nation as a whole." He continues:
"Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it’s spending to rescue the economy and the banks. Is that a real possibility?
Well, in a rational world Mr. Gross’s warning would make no sense. America’s projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments — and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the...
Thursday, May 21, 2009 - 2:28 PM
Steven Pearlstein has a column in Wednesday, May 20's Washington Post called “Budget Scolds Shouldn’t Drown Out the Chorus Calling for Health Reform.” We assume that The Concord Coalition is among his targets given his definition:
"In the political menagerie that is Washington, there exists a species known as the budget scold — analysts, advocates, editorial writers and politicians who possess a fierce determination to bring the federal budget into better balance.
Budget scolds have a wonkish demeanor and a skeptical outlook. They possess an undue fascination with rules and processes, and speak in the arcane language of baselines, sunsets and pay-fors."
Although we don't define ourselves by the fact that we occasionally "scold," the rest of his characterization isn't that far off -- just ask those who run into us at parties. But the point of his article is that Pearlstein is concerned that worries about the budget deficit are going to scuttle health care reform. He writes:
"There have been times when the budget scolds have saved the country from short-...
Wednesday, March 18, 2009 - 2:40 PM
As you recover from what was hopefully a fun-filled St. Patrick's Day, it might be helpful if I were able to convert our latest issue brief into a fun, bite-sized and easily digestible, bullet list of the most interesting things we found in President Obama's first budget submission to Congress.
First some background: in general, every presidential budget is significant because it establishes the priorities and issues which the administration perceives to be most important and how they plan to address and resolve them. The first budget of a new administration is even more important in that it sets expectations for the coming years and how these policies reconcile with the promises made during the campaign. The submission the Obama Administration made at the end of February was just an outline of the larger budget they will present later in the year, but with enough information that Congress can turn towards creating the Congressional budget resolution in the next month or two.
Unlike the iconic shamrock used on St. Patrick's Day, our issue brief contains more than "three leafs" of knowledge [and you should still read the issue brief!]:
- The...
Wednesday, January 28, 2009 - 9:30 PM
The House of Representatives voted today to pass an $819 billion stimulus package. Attention now turns to the Senate debate and vote, and then to reconciling the two chambers' versions.
To illuminate the competing interests in the bill: between short-term stimulus and long-term investment; and to provide 10 policy principles to guide the debate, The Concord Coalition today released an issue brief entitled "Designing a Framework for Economic Recovery and Fiscal Sustainability."
There is little question that the economy is in dire shape and that deficit spending is an appropriate policy response. The tricky part is making sure that the deficit spending is for effective short-term stimulus. Long-term investments, which are also funded in the "recovery" bill, are important for long-run economic growth, however it is unclear that the current rushed effort at a short-term economic jolt is the appropriate place for initiating those investments. The more discerning annual budget process provides a better opportunity to plan for those investments and judge the...
Friday, January 16, 2009 - 12:57 PM
Today’s Washington Post contains a very welcome front-page headline, “Obama Pledges Entitlement Reform.” The article explains that President-elect Obama plans to convene a fiscal responsibility summit in February. According to the Post story:
President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.
That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.
"What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further," he said. "We have to signal seriousness in this by making sure...
Tuesday, January 13, 2009 - 5:34 PM
There’s news from the Treasury Department today (monthly Treasury statement) on the federal budget deficit for the first quarter of fiscal year 2009 (i.e., 4th quarter of calendar year 2008). I guess this is what a year headed for a (way?-)more-than-a-trillion-dollars deficit looks like; AP reports:
The federal government already has run up a record deficit of $485.2 billion in just the first three months of the current budget year, the Treasury Department said Tuesday.
The deficit is on track to surpass $1 trillion for all of fiscal 2009 and some economists believe it could go much higher.
The deficit for December totaled $83.6 billion, a sharp deterioration from a year ago when the government managed a surplus of $48.3 billion…
All the red ink is occurring because of the massive spending on the $700 billion financial rescue program and a prolonged recession which has depressed tax revenues.
The imbalance from October through December is the highest on record for a first quarter and surpasses the...
Thursday, January 8, 2009 - 9:54 PM
This week we've heard more about what's likely to be in the mix in the next economic stimulus/recovery package. We've learned that there are more tax cuts in the picture—this despite the skepticism expressed over the past few months about how effective another round of tax cuts would be in boosting consumption, given the already-mediocre marks many economists gave them the last time around, and the current state of American consumers, who are now less than enthusiastic about even being labeled ”consumers.”
A Wall Street Journal story breaking the news about $300 billion of new tax proposals found surprise among some experts:
William Gale, a tax-policy analyst at the Brookings Institution think tank in Washington, said the scale of the whole package is larger than expected. He called the business offerings a true surprise, since most attention has been focused on the spending side of the equation, especially the hundreds of billions of dollars being discussed for infrastructure and aid to state and...
Wednesday, January 7, 2009 - 3:17 PM
The big story today is that the non-partisan Congressional Budget Office updated their baseline estimate for the federal budget's ten-year outlook. Our analysis, based on their most recent data, shows that current policy trends could add $10.295 trillion to the national debt from 2010-2019. Note that the current national debt is $10.6 trillion, so this would double that in just 10 years!
The other big news from the CBO baseline release today is that they project this year's budget deficit (Fiscal Year 2009) will be $1.186 trillion (more than double the prior single year dollar record) or 8.3% of GDP--a post World War II high.
For over a decade, the Concord Coalition has taken CBO's estimates and made changes in order to produce a more "plausible" estimate based on current policy trends. These baselines are important tools on which to evaluate how proposed legislation effects the budget. Our press release today about the new CBO report and our analysis can be found here. For more information on Concord's plausible baseline...
Tuesday, January 6, 2009 - 3:12 PM
To start out the new year, I want to call attention to a recent Washington Post Op-Ed by Neil Howe and Richard Jackson, the editors of the Concord Coalition's Facing Facts Quarterly.
The editorial highlights one of the fundamental problems the Concord Coalition was formed to call attention to--the aging of the population. Population aging is a function of longer life expectancy and lower birthrates. It is a phenomenon that tends to occur in countries throughout history as the economy in that country gets wealthier and more developed. The problem is that it is also correlated with declining economic growth as workforce participation eventually declines. There is even a suggestion in some research that this phenomenon is the number one explanatory factor when looking at the success of economic systems throughout history.
The Concord Coalition's primary concern with the aging of the population is that its resulting lower economic growth in the future will occur at the same time that the nation's entitlement programs, which are designed to provide benefits to retirees, will swell in size--increasing the burden on working age citizens. Furthermore, irresponsible...