Roll Call

Party Polarization Menaces Efforts To Control Debt | Roll Call (subscription)

Cecille Isidro — Wed, 21 Oct 2009 23:05:00 -0400

... and experts at the Heritage Foundation, the Brookings Institution, the Concord Coalition and the Committee for a Responsible Federal Budget. ...

Reducing the Budget Deficit Requires More Than Just Health Care Reform | Roll Call

Cecille Isidro — Tue, 15 Sep 2009 17:35:00 -0400

Maya MacGuineas is the president of the bipartisan Committee for a Responsible Federal Budget at the New America Foundation. and more »

Judicial Confirmation Process Needs 21st-Century Updating

Erin Drankoski — Wed, 05 Aug 2009 02:46:00 -0400

Committee for a Responsible Federal Budget in Roll Call | 'McCain, Obama Again Dodged Priority Questions'

Cecille Isidro — Thu, 09 Oct 2008 08:18:00 -0400

Prior to the crisis, McCain was promising to balance the federal budget by 2013, but the nonpartisan Committee for a Responsible Federal Budget estimated that, at best, he'd rack up a deficit of $147 billion.

The committee estimated McCain's proposed tax cuts to cost $417 billion to $485 billion that year - based on his campaign's own estimates - but another group, the Brookings Institution-Urban Institute Tax Policy Center, said they could cost $700 billion, based on McCain's statements in stump speeches...

...At a post-debate panel sponsored by the New America Foundation on Wednesday, former Rep. Bill Frenzel (R-Minn.), a budget expert now with Brookings, said that all pre-crisis estimates have become "obsolete" - meaning, the new reality is much worse.

"Last night," he said, the candidates "were specifically asked about how their priorities might change and what sacrifices they were asking for. It's in the nature of political candidates to be cunningly evasive and they offered no clues to the answers to these questions."

He noted that Congress undoubtedly would add a new economic stimulus package to this fiscal year's spending agenda and "after last night, I have a sinking feeling in the pit of my stomach" about the nation's fiscal situation.

Another panelist, former Comptroller… more

Reihan Salam's book in Roll Call | 'Obama Makes Gains Among Workers Hurt By Bush Economics'

Communications — Thu, 24 Jul 2008 08:33:00 -0400

...Much-discussed and deservedly praised, Grand New Party by Ross Douthat and Reihan Salam paints a grim picture of working-class prospects, both economically and socially, under prevailing circumstances.

Instead of being a society where anybody can "make it," Douthat and Salam describe the United States as increasingly becoming an "inherited meritocracy" where the wealthy and well-educated get more so and those without education and skills get left behind and face a life of stress and insecurity... LINK

Maya MacGuineas in Roll Call | 'Ryan Campaigns for Fiscal Fitness'

Communications — Wed, 25 Jun 2008 05:48:00 -0400

Regarding Rep. Ryan's proposed fiscal policy strategy:

...Maya MacGuineas, president of Committee for a Responsible Federal Budget, had high praise. "Comparing it to the current path we are on, it is a vast improvement, and comparing it to the other Congressional plans out there, well, there are none..." LINK (subscription required)

Deficit Bubble Boiling, Trouble is Close Behind

Ron Tang — Thu, 28 Feb 2008 00:00:00 -0500

In recent years, America has lurched from one economic bubble to the next. Early this decade, the dot-com bubble burst, sending financial markets into a tailspin. As lower interest rates helped to ease the bursting of that bubble, we shifted to over-investing in housing -- again culminating in a tremendous misallocation of resources and economic losses, as we currently are seeing. Now, as we try to contend with the bursting of the housing bubble, we face what may be the most dangerous type of bubble yet: the deficit bubble.

As the economy softens, and Congress is trying to ease the blow with a costly "fiscal stimulus" package, the deficit is again starting to balloon. For the first four months of this fiscal year, the deficit has been twice what it was last year.

Sure, the president's recently released budget projects that we will turn a predicted $400 billion deficit into a surplus by 2012. But these predictions paint a rosy picture of the government's finances by leaving a number of important parts of the budget out. When the Committee for a Responsible Federal Budget made its projections, we, unlike the president, included the costs of continuing to patch the alternative minimum tax and funding the war on terror, among other things. These are not unlikely events -- in fact, they are almost certain to occur -- and everyone in Washington knows it. Under these assumptions, we found cumulative deficits up to $6 trillion over the next decade and the debt quickly growing to unsustainable rates.

Large deficits are a problem for several reasons. First, they crowd out private investment and force us to borrow capital from abroad. Second, they add to the debt, weakening the United States' future borrowing position and increasing the amount of the budget we must dedicate to interest payments to holders of U.S. Treasury bonds. And, they impose large taxes on future generations that have no say in the matter of the debt that is being racked up for them to pay. Try looking your kids in the eye and explaining how that is fair.

Just like all bubbles, we know how this story ends. We overestimated the value of our tech stocks until that bubble burst. We overestimated the value of our homes until that bubble burst. And now we are overestimating the amount that we can borrow and remain financially secure into the future. When that bubble pops, either in the form of skyrocketing interest rates or a currency crisis, the disruption through the economy will be profound.

This bubble is more pernicious than the previous two because when it pops we will be left with almost nothing to show for it. The tech bubble and housing bubble were both caused primarily by overinvestment. When they burst, many people lost a lot of money, and many more were unable to borrow, but at least we were left with fiber-optic cables in the ground and houses around growing cities. Our deficit, on the other hand, primarily finances a consumption-heavy budget that continues to underinvest in education, infrastructure and R&D. Our overspending leaves little in its wake to help us rebuild after a crash.

China and Japan already have begun scaling back the amount of U.S. debt they are willing to take on. Great Britain has picked up most of the slack but cannot be expected to do so forever. As the purchase of our debt slows, we will become less able to pay off old investors with funds from new ones. When our debt comes due, we will have to start dipping into American wallets with higher taxes and lower government spending, forcing Americans to cut back on consumption in drastic fashion.

We have an opportunity to avert disaster by recognizing this bubble before it implodes. The solutions are relatively straightforward. First, budget constraints including credible spending caps and pay-as-you-go rules that require new tax cuts or entitlement programs be fully paid for have to be stuck to without relying on gimmicks. Borrow and spend is not an option.

Second, the budget has to be gradually brought back into balance. None of the presidential candidates running for office has come forth with a realistic plan to balance the budget, but they should -- and we should insist that they do.

Finally, achieving budget balance in the short run will not be enough; legislators have to turn their attention to the spiraling costs of the nation's largest entitlement programs -- Medicare, Medicaid and Social Security. Perhaps it will take a commission; perhaps we should have another summit as we did in 1990; but most importantly, we should stop delaying.

Change comes either through leadership or crisis. There is still a chance of leadership. A crisis triggered by the bursting of the newest deficit bubble would undermine any promise for constructive change in our democracy.

New America in Roll Call | 'Moderate Graybeards Need Top 10 Agenda'

Communications — Thu, 03 Jan 2008 12:14:00 -0500

Moderate Graybeards Need a Top 10 Agenda (Roll Call) One possible model is the New America Foundation's proposed "progressive consumption tax," which would base taxes on the difference between income and savings, with rates rising with income. ...

Sherle Schwenninger in Roll Call on Public Infrastructure Problems

Communications — Mon, 06 Aug 2007 17:00:00 -0400

The collapse of the Minnesota interstate bridge, coupled with the explosion of a steam tunnel in Manhattan, should arouse the country to the need for massive infrastructure investment -- and reform of the way it’s financed.

It’s a miracle that more people weren’t killed and injured in the two instances...

Urgent attention will be paid for a few weeks to America’s highway bridges -- 15 percent to 25 percent of which are believed to be structurally deficient -- because of the collapse in Minneapolis.

But attention ought to be paid in a bigger way to the deficiencies in America’s highways, its electric grid, railways, airports, waterways and urban utilities. They all are clogged, inefficient, a sap on the nation’s productivity and competitiveness -- and, in some cases, dangerous.

What’s needed is bipartisan action...

As part of the New America Foundation’s compelling report “Ten Big Ideas for a New America”... Sherle Schwenninger noted that from 1950 to 1970, the U.S. devoted 3 percent of its gross domestic product to infrastructure but since 1980 has spent less than 2 percent. A percent of GDP amounts to $140 billion a year in current dollars that the U.S. is not spending to keep its economy growing. The American Society… more