Members and guests of the Charlotte Economics Club in North Carolina gathered for a luncheon on May 18 to hear a trio of fiscal policy experts discuss the massive budgetary challenges facing the nation.
Robert Bixby, executive director of The Concord Coalition, moderated the timely discussion with Diane Lim, principal economist for the Conference Board, and G. William Hoagland, senior vice president of the Bipartisan Policy Center. Lim had experience working in the Clinton administration while Hoagland served on the staff of Senate Republicans.
Bixby began with an overview of the budget outlook showing why the debt is on an unsustainable path. His charts included the projected growth of federal spending and revenues as a percentage of the economy and highlighted the main sources of growth in federal spending.
Hoagland said he thought President Trump’s budget proposals would be unlikely to win congressional approval. He went on to say that earlier hopes for tax reform have been greatly impacted by the difficulties in Congress this year on health care legislation because “tax reform and health care reform are inextricably linked.”
Hoagland said the most worrisome fiscal problem this year will be the debt ceiling issue, which the nation’s leaders must confront in the autumn. “We’ve got to pass legislation to increase the debt limit to pay our bills,” he said, adding that the country has never defaulted on its debts.
Lim recalled that during the 1990s, the overall budget outlook benefited greatly from the rapidly growing economy. But we cannot rely on such high growth now, she said, in part because large numbers of baby boomers are leaving the workforce. Productivity growth has also been lower than in the 1990s.
All of the panelists agreed that controlling health care costs would be key to any long-term fiscal solutions. Lim said the debate over repealing and replacing the Affordable Care Act (ACA) had led many people to become better informed about health care issues: “Never have so many people known so much about the ACA, its coverages, and pre-existing conditions.”
Hoagland also stressed the need for tax reform, specifically in the corporate business tax sector: “Competitive countries have better rates and while tax reform will not pay for itself, it does have some big benefits.”