Improving the Fiscal Outlook Should Come Sooner Than the Second Decade

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The Concord Coalition today expressed disappointment that President Biden’s first budget, covering Fiscal Years 2022 through 2031, will produce annual deficits in excess of $1 trillion for each of those years and increase the debt as a share of the economy from 110 percent this year to 117 percent in 2031. It is the first presidential budget since Fiscal Year 2009 that does not seek to reduce total deficits or lower the debt-to-GDP ratio from 10-year baseline projections.

Concord Coalition Executive Director Robert L. Bixby issued the following statement:

The Concord Coalition supports the administration’s stated aim to reduce deficits over the long-term, and we acknowledge that the administration’s projections show an improving outlook in the second decade. The budget, however, would produce a deep trough of additional debt over many years before we get to that point, even if things work out as planned. 

“With the economy showing encouraging signs of rebounding from last year’s devastation, it is time to begin the difficult process of stabilizing, and then reducing, the unsustainable path the debt was on long before the COVID-19 pandemic hit. This budget leaves that task for another day while digging the hole even deeper over this presidential term and the next.

“To be clear, current circumstances do not call for austerity, and a good case can be made for increased spending to support long-term growth, such as infrastructure, child care, and research. A good case can also be made for revisiting the tax cuts enacted in 2017. The central problem with this budget is that the new spending exceeds the new revenue for nearly a decade, which only adds to the burden of debt and dampens long-term economic growth potential. 

We are just at the beginning of what will be a highly significant debate over the size and scope of the federal government. To his credit, the president has made it clear that new proposals should be paid for. That is a good starting point for negotiations. As the process moves forward, The Concord Coalition encourages the administration, its allies, and its congressional opponents to engage in good faith bipartisan negotiations with no preconditions and with due regard for fiscal sustainability.

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