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WASHINGTON — The Concord
Coalition today released a new Report on Fiscal Responsibility entitled “Lack
of Action On Deficit Signals Undue Complacency

WASHINGTON — The Concord
Coalition today released a new Report on Fiscal Responsibility entitled “
of Action On Deficit Signals Undue Complacency
.” (Requires

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This report grades Congress and the Administration on the choices that they make
– or fail to make – in promoting fiscal responsibility and paving a long-term
sustainable path for entitlement spending.

“The budget deficit continues to ratchet upward and there is no consensus on
what, if anything, to do about it. At best, Washington policymakers seem content
to tread water in the rising tide of red ink. At worst, they are cynically
professing concern about the deficit while pursuing tax and spending policies
they know will only dig the fiscal hole deeper. One thing is clear: specific
plans to actually reduce the deficit are not on the agenda. Such complacency is
not warranted,” said The Concord Coalition.

“Earlier this year, the Congressional Budget Office (CBO) projected a fiscal
year 2004 deficit of $477 billion. Since then, however, revenue growth has been
stronger than expected and the actual deficit for 2004 will likely be closer to
the $445 billion deficit that the Bush administration (OMB) now projects. Does
that mean that current policies are bringing the deficit down? No. For one
thing, the deficit is going up, not down. It is true that when CBO issues its
next forecast, the projected deficit will be lower than it was–just as the OMB’s
projected deficit has declined since February. What matters, however, is the
bottom line and there can be no denying that a deficit of $445 billion, or close
to it, is considerably larger than last year’s deficit of $375 billion.

“The President’s budget claims to cut the deficit in half over five years but
omits the likely cost of ongoing military operations in Iraq and Afghanistan,
assumes a freeze on non-security appropriations and pretends that relief from
the growing alternative minimum tax will be temporary. Moreover, its 5-year
window ignores the 10-year revenue loss of making the President’s tax cuts
permanent. In Congress, deficit reduction talk has produced actions that only
make it more difficult to close the gap.

“Washington has been consumed this year with reports of intelligence failures
leading up to the September 11 attacks and the war in Iraq. Many have concluded
that the official agencies entrusted with giving policymakers timely warnings
about developing problems failed in that mission. No such charge can be leveled
against those who are entrusted to provide warnings about our fiscal future.
Here, the warnings have been timely, loud, and clear. Any ‘intelligence failure’
rests squarely with policymakers who hear the warnings and choose to ignore

“The deficit cannot be dismissed as a self-correcting problem. Even assuming
strong economic growth, plausible projections for the 10-year outlook show
deficits of about $5 trillion. The longer-term outlook is worse. If policymakers
want to get out of this hole, they’re going to have to stop digging and start
climbing. Deficits matter.”

The following is a summary of Concord’s Report on Fiscal Responsibility:






Fiscal policy this year has featured
wishful thinking and creative accounting rather than actions to control
the deficit.


Enacting measures that maintain fiscal responsibility over the next 1-2


In the
short-term, the most promising fiscal policy development may be that some
politicians in both parties are beginning to recognize the danger of
rising deficits and demanding offsets for the costs of new initiatives. It
remains to be seen, however, whether this good intention will translate
into actions that actually get the deficit under control.  Not a single
piece of legislation has been enacted this year that makes any hard
choices designed to cut the deficit.


Enacting measures that are fiscally responsible over the next 10 years


The ten-year
outlook remains as worrisome as ever.  Absent a change of course, deficits
totaling $5 trillion are likely under plausible assumptions.  Most
problematic in this bleak picture are expiration dates, or “sunsets,”
embedded in the tax cuts passed over the last three years.  Circumstances
have changed dramatically.  The tax cuts can no longer be justified as
“refunding a surplus.”  The country now faces endless deficit spending
that if left unchecked, will reduce national savings and private sector
investment, potentially suppressing future economic growth.


Enacting measures that deal with the entitlement financing gap and ensure
fiscal sustainability


With the
baby boom generation poised to retire in a few short years, Washington has
rallied around the “Do Nothing Plan” for Social Security, added to the
long-term liabilities of Medicare, and set off on a fiscal path that is
likely to add trillions to our National Debt over the next ten years. 
This is a “hat trick” of thoroughly irresponsible fiscal policy, and earns
an F.


The full text of The Concord Coalition’s Report on Fiscal
Responsibility is available online:



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The Concord
Coalition is a nonpartisan, grassroots organization dedicated to balanced
federal budgets and generationally responsible fiscal policy.  Concord’s
co-chairs are former Senators Warren B. Rudman (R-N.H.) and Bob Kerrey (D- Ne.). 
Former Commerce Secretary Peter G. Peterson serves as President of The Concord


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