Fiscal Policy Program: Latest Articles

President Bush's tax reform panel has ventured into political no man's land. It wants to limit the tax deductions for home mortgages, employer-provided health insurance and state and local taxes.

Individuals and businesses love these tax breaks. Democrats and Republicans embrace them for their own ideological reasons. The constituencies backing them are powerful. But these sacred cows are in desperate need of reform. The Treasury needs the money to close the growing budget deficit, and these tax breaks… more

With President George W. Bush's Tax Commission about to issue its recommendations--opening up a rare opportunity for fundamental tax reform--we would do well to remember one of the iron rules of economics: whatever we tax, we will get less of and whatever we do not tax, we will get more of. In other words, we should tax what is bad, not what is good.

By this logic, America's current tax system is as wrong-headed as it is backward: it discourages… more

Congress and the president have made responding to Hurricane Katrina the highest priority of the federal government. The tremendous costs involved call for a grand rethinking of the nation's priorities. Given that we are only in the fourth week of the new fiscal year, and the current budget is already basically dead, the first step should be to pass a brand new budget.

The budget that the Congress passed this past spring, which covers the five years beginning in fiscal… more

While it's impossible to measure the human suffering caused by Hurricanes Katrina and Rita, it is possible to measure their effect on the nation's budget. Given our precarious fiscal situation -- large budget deficits and huge imbalances for long-term entitlement programs -- Congress cannot afford to blindly add billions to the already swollen deficit.  In the comming years (or better yet, months) there will have to be a bi-partisan effort to balance the budget for both the short and long… more

With structural budget deficits stretching indefinitely into the future, the mounting national debt and few meaningful budget rules left in place, the chances of the deficit disappearing on its own are about as likely as finding a quick fix for health care. It is no wonder fiscal conservatives are in such a state of despair. Despite numerous warnings from the Congressional Budget Office, the Government Accountability Office, the Federal Reserve and the International Monetary Fund, the past four… more