New Congress, Familiar Fiscal Challenges

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The 114th Congress convenes today with Republicans controlling both the House and Senate for the first time in President Obama’s presidency, underscoring the importance of bipartisanship in dealing with the nation’s key fiscal challenges.

These challenges remain significant, despite the dropping annual deficit in recent years. As Concord Coalition Executive Director Robert L. Bixby recently noted: “A shrinking deficit still means a rising debt.” And even the deficit is projected to start rising again next year.

With an aging population, the government must spend more just to provide the same level of services for more retirees. Other factors: high health care costs, many ill-advised tax breaks, and rising interest payments on the debt.

The situation calls for comprehensive reforms throughout the federal budget, but a “grand bargain” is unlikely over the next two years.

As fiscal experts have noted at recent Concord Coalition programs in Washington, however, there are opportunities for Obama and lawmakers to pursue limited but helpful agreements in areas such as health care and entitlement reform.

Last month former U.S. Senators Robert Kerrey and John Danforth, working with Concord, released an update of their 1994 commission’s report on entitlement and tax reform. That update could serve as a good guide for the new Congress as it considers potential reforms in those areas.

On Social Security in particular, lawmakers must take some action in the coming session of Congress because its Disability Insurance Trust Fund is about to run dry. Ideally, elected officials will do more than merely slap a short-term patch on the problem.

External links:
Bipartisan Commission on Entitlement and Tax Reform: 20th Anniversary Perspectives
No Time for Complacency on Fiscal Challenges (Concord Coalition)
Experts Outline Possibilities for Bipartisan Reform (Concord Coalition)
Concord Program on Fiscal Policy in 114th Congress (C-SPAN)

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