December 18, 2014

The (Tab)ulation

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Tuesday, April 28, 2009 - 11:50 AM

Listening to President Obama’s weekly address on Saturday was a rollercoaster experience for me. At times, I was lifted by his message of fiscal discipline. At other times, I was depressed by his unwillingness to connect fiscal discipline with politically difficult choices.

It started out well with the President’s observation that “the cost of confronting our economic crisis is high. But we cannot settle for a future of rising deficits and debt that our children cannot pay.”

Then came the first downward plunge when the President proclaimed, “we have identified two trillion dollars in deficit reductions over the next decade.” 

This statistic is based on savings achieved from a contrived “baseline.” If you assume that war spending remains at the current level adjusted for inflation over the next 10 years, you can get a lot of “deficit reduction” by reducing that commitment -- as even the Bush Administration was planning to do. And, if you assume that all of the Bush tax cuts are permanent, which they are not, you can get more “deficit reduction” by assuming that a portion of them will not be extended, which is what would happen anyway under current law. So there isn’t really a lot of deficit reduction in the $2 trillion figure the President cited, and no hard choices.

...
Monday, April 20, 2009 - 11:45 AM

In line with the trend of civic-engagement and activism among youth, students at The University of Pennsylvania are gearing up for a federal finance awareness week to bring focus to our ever deepening fiscal hole. This isn't the first time we've seen motivated students who understand the stakes, impress their peers and silence the skeptics, but this is the latest example of why I'm proud to work with my generation.  

After being inspired during a class conducted in collaboration with the Concord Coalition, and with some motivating outrage from what they discovered about the country's fiscal affairs, a group of students went above and beyond the call of duty and academics to start a student group and website called Pound-It.org.

Further proving that there is more to their industry and ambition than getting a good grade, these students have kept their momentum and work ethic going, even after receiving their A's, and are planning a week-long celebration of their commitment to educating their peers about fiscal responsibility.

This outreach campaign will include flyering the campus, 550 twenty billion dollar bills (representing our debt) on the college green, as well as speaking events and a public screening of I.O.U.S.A.

The following events are open...

Friday, April 3, 2009 - 9:40 AM

As we previously noted, President Obama released the outline of his first budget at the end of February.  Those details have been scored by the Congressional Budget Office and included in the March update to their Budget and Economic Outlook. Now, the proverbial "budget ball" now rests in Congress as they work towards agreeing on a unified budget resolution.   

Both the Senate and House held votes last evening after marking up their respective resolutions last week. The House approved its resolution by a vote of 233-196 while the Senate's resolution passed by a vote of 55-43.

The two resolutions are not that different on the surface: they both follow the administration's leads on attempting to cut the deficit in half over four years, establishing health care reserve funds, and addressing...

Wednesday, March 18, 2009 - 1:40 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 - 8:30 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...

Thursday, January 22, 2009 - 5:27 PM

Although I.O.U.S.A. was not graced with the honor of an Oscar nomination this morning, the movie's power and message is undeniable. The filmmakers did a great service to the issue of fiscal responsibility and the country's dialogue about generational stewardship. 

This was eloquently brought home to me in a letter I recently received from one of my Midwestern volunteers. Strong in her Christian faith, she was instrumental in bringing a screening of the documentary "I.O.U.S.A." to her church in order to encourage others to see the parallels between Christian values and the stewardship practices needed now to ensure a good quality of life for future generations.

She starts out with a quote from Martin Luther King:

"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."

And continues:

"A diverse group of people at our church gathered expectantly one Sunday afternoon. We shared a potluck meal together and then shared the challenging film, I.O.U.S.A.. I thought I knew what to expect, but there was so much I was unaware of about our economy and how we got to where we are now. I was stunned...

Friday, January 16, 2009 - 11:57 AM

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 - 4:34 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...

Friday, January 9, 2009 - 3:36 PM

Fresh off its appearance as one of five documentaries competing for a Critics Choice Award last night, I.O.U.S.A. will air on CNN two times this weekend.

Accompanying clips of the film will be a panel of experts discussing the movie in greater detail as well as its relevance to the current economic crisis. The event will be moderated by Ali Velshi and Christine Romans, hosts of "Your $$$$$." The panel guests will include Concord Coalition President Peter Peterson, former U.S. Comptroller General David Walker, former Office of Management and Budget Director Alice Rivlin, and former U.S. Senator Bill Bradley. 

The program will be shown Saturday, January 10, 2009 at 2:00 PM EST and Sunday, January 11, 2009 at 3:00 PM EST.

For those of you whose football team missed the NFL playoffs (like my Tampa Bay Bucs) and enjoy winners (like my Florida Gators and this documentary film), this should be worthwhile television.

--Josh Gordon

Thursday, January 8, 2009 - 8:54 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...