Hearing Focuses on Need for Debt Reduction

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Lawmakers and expert witnesses displayed bipartisan concern over the nation’s debt and some agreement on its causes, including aging demographics, at a hearing of the Congressional Joint Economic Committee last week.

“The temporary decline in deficits has ended,” said former Senator Judd Gregg (R-N.H.), a Concord Coalition board member. Unsustainable debt “falls on the heads of a government that has created it,” Gregg added.

Ranking Member Rep. Carolyn Maloney (D-N.Y.) faulted a combination of demographic trends and poor fiscal decisions in the early part of the 2000s for the growth of the debt.

The debt “weighs heavily on economic growth, crowding out private investment,” said Purdue University President Mitch Daniels, a former Indiana governor and former White House budget director.

Daniels, along with Gregg and Alice Rivlin, a former vice chair of the Federal Reserve and former White House budget director, suggested that Washington’s fiscal inaction is a byproduct in part of unrealistic assumptions about future growth and interest rates.

While an immediate crisis would make it politically easier to rein in the growing federal debt, Rivlin noted, Washington should not wait for such a crisis.

External links:
JEC Hearing Information (Includes Video)

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