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Fiscal Policy

The Gang of Six Is Our Best Chance for a Debt Deal in this Congress

  • By
  • Marc Goldwein,
  • New America Foundation
July 21, 2011 |

The debt ceiling deadline is days away, but something unusual is happening in Congress. Rather than playing the short game, and following the old tradition of kicking important budget decisions down the road, dozens of senators are building the case to think long. Even as they plan a vote to avoid default, they have a rare opportunity to accompany a debt ceiling increase with a plan to bring our fiscal situation under control. They should take that opportunity.

Understanding the Debt Limit

July 14, 2011

On August 2nd, 2011, the Treasury Department estimates that it will run out of extraordinary measures to avoid hitting the statutory debt limit. At that point, absent Congressional action, the United States will have no choice but to default on its debt or on its other legal obligations. Such an outcome would be unacceptable and, quite likely, disastrous for the economy.

The GOP Has Double Amnesia

  • By
  • Peter Beinart,
  • New America Foundation
July 18, 2011 |

If the debt-ceiling negotiations reveal anything about America in 2011, it is this: we live in an age of political amnesia. From the day the Twin Towers fell until the day Barack Obama was elected president, Washington Republicans did virtually everything in their power to increase the deficit.

Don't Give Up on Grand Bargain on Debt

  • By
  • Maya MacGuineas,
  • New America Foundation
July 18, 2011 |

Maybe the cynics are right. Maybe it will prove too heavy a lift to use the occasion of the debt ceiling increase to put in place a large, specific budget fix to reduce our massive deficits.

Enough policymakers now seem to buy the importance of lifting the debt ceiling, and it appears we will find a way to do so in time, thereby avoiding an (inexcusable) default.

The GOP’s False Fiscal Narrative

  • By
  • Peter Beinart,
  • New America Foundation
July 11, 2011 |

Reading about the debt-reduction talks is painful. It's painful because in analyzing them, the media frequently fall back on storylines that just aren't true.

Go Big on the Debt Ceiling

  • By
  • Maya MacGuineas,
  • New America Foundation
July 11, 2011 |

So President Obama has reportedly given congressional leaders a menu of options in the debt ceiling talks: a small, temporary debt deal; a medium-sized "down payment"; or the big "grand bargain."

No question -- and it sounds like most of lawmakers agreed -- the motto on the debt ceiling deal must be: Go big or go home.

Well, don't go home; keep working. But by all means, go big.

If Washington Worked, Here's How We'd Fix the Budget

  • By
  • Marc Goldwein,
  • New America Foundation
July 8, 2011 |
This might have been the front-page story of a national newspaper today. But that's in a parallel universe. Instead of announcing a plan which would begin to reduce our medium-term debt and bring entitlement growth under control, much of Washington is participating in a dangerous game of chicken with the debt ceiling -- a game where failure would destroy our credit rating, rather than preserve it.

There's plenty of blame to go around. Most Democrats came late to the deficit reduction game and have been playing from behind ever since. Rather than using the Fiscal Commission's recommendations as a starting point for negotiations, President Obama mostly ignored it, omitting the lion's share of its recommendations from both his budget and State of the Union address. Only in April, after the administration had already conceded substantial domestic spending cuts, did the President come around and endorse a framework similar to the commission's. Even then, he excluded the commission's proposed changes to Social Security and Medicare benefits, and many Democrats appear to remain unwilling to make the hard choices on entitlement programs necessary to put our long-term trajectory back on track, even if those concessions might spare important programs today or bring Republicans closer to accepting tax increases.

Republicans, meanwhile, have let the perfect be the enemy of the good. The party continues to allow tax orthodoxies to blind them from an opportunity to cut spending. Some have come to the understanding that tax expenditures -- such as the ethanol credit or the employer health exclusion -- are really just spending in the tax code, and that giving them up in exchange for holding traditional spending down to controllable levels is a good deal. But most of the party has called for a spending cut-only solution and has made it clear that they would rather solve only part of the problem and have no revenue (even if entirely from tax expenditures) than solve the entire problem while accepting some revenue.

The Army's Next Big Fight

  • By
  • Fred Kaplan,
  • New America Foundation
July 6, 2011 |

It's a fair bet that when Leon Panetta took the helm of the Pentagon last week, one of his marching orders was to find more ways to cut the defense budget, and not just around the edges.

One result of this is that the Army will very likely take a whacking.

Budget Path: How Feds Can Avert the Fiscal Crisis

  • By
  • Marc Goldwein,
  • New America Foundation
June 24, 2011 |

In the wake of the recent financial meltdown from which we are still recovering, the United States faces the prospect of yet another crisis—a federal debt crisis. Averting crisis will require tough choices and painful sacrifice, including those from federal workers. This crisis can be averted, however. And the sooner we act, the better. The National Commission on Fiscal Responsibility and Reform (“Fiscal Commission”), on which I served as associate director, has shown a way forward.

CRFB's Long-Term Realistic Baseline

June 30, 2011

The Committee for a Responsible Federal Budget has updated its “Realistic Baseline” using projections from the Congressional Budget Office’s most recent Long-Term Budget Outlook.

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