It is urgent that the president and Congress reach a bipartisan agreement on spending and revenue policies that can reverse and stabilize our growing debt.
Our experience demonstrates that a serious commitment to fiscal restraint and process reform, combined with political will, can produce bipartisan legislation that will serve the country well.
Grossman [a student] worries about the impact of federal red ink on her own generation. "We will be the people that deal with this huge debt. Our parents' generation might not be able to retire, so we're looking at coming into a job market where we thought we'd move up the chain quickly. But then - 'Oh, wait, the baby boomers can't afford to retire, so where does that leave me?' "
"This is something that affects our day-to-day lives, and that's something that needs to be understood. How is this going to affect me? How will it affect me getting a job now, or in five years?" she wonders.
"I am astonished that people don't realize the magnitude of the situation we're in."
In this book, I look at
the nature, scope, causes, and history of America’s national debt. I will explore the consequences of our 14-digit debt on the nation’s economy and for individuals, if we continue on our current path of fiscal recklessness. I will examine the political torpor that has allowed our debt to grow like some alien life form out of a 1950s science-fiction movie. And, finally, I will consider what politicians have done in the past and what could be done to rid our nation of its potentially ruinous debt.
Solutions must be found - and soon. As our debt mounts, the risk grows that our creditors, especially the foreign creditors who own half our debt, will lose confidence in our ability to get our house in order and will demand dramatically higher interest rates to lend us more. Rapidly rising rates would derail the economic recovery and balloon the cost of servicing the federal debt. Escalation of the debt has made near term action to reduce deficits more urgent than it would have been at lower debt levels. We no longer have the luxury of waiting for several years until we are sure the economy is growing strongly before taking action to stabilize the debt.
We have to take action very soon to arrest the debt build-up before it threatens the confidence of our creditors. Moreover, while there are persuasive economic reasons for curbing the increase in our debt, the moral case is even stronger. It is unconscionable for today’s Americans to live persistently beyond our means and pass our bills on to future taxpayers.
One of our problems lies largely with the fact that it is much easier to spend other people's money than one's own. I am afraid that the Congress is not nearly as scrupulous as it ought to be when it comes to spending hardworking taxpayers' dollars. It is absolutely essential that we prioritize and rein in spending. ...
In closing, the use of hard-earned taxpayer dollars on duplicative, inefficient, and failed federal agencies and programs is a serious problem facing our nation today. Over and over, we see congressionally authorized programs become institutionalized, and then--although no longer necessary--they become permanent fixtures receiving more taxpayer dollars year after year.
The Commission on the Accountability and Review of Federal Agencies (CARFA) Act (S. 1668) would change this.
The CARFA Act establishes a commission to review federal discretionary agencies and programs, making recommendations for the elimination of unnecessary programs. The Congress would subsequently take an up-or-down vote on these recommendations. The CARFA Act is the antidote to the Congress's general unwillingness to end politicians' pet projects. It is based on the proven model of the military base closing commission (BRAC), and it will work.
Official: A bill to amend the Internal Revenue Code of 1986 to
allow individuals to designate that up to 10 percent of their income tax liability be used to reduce the national debt, and to require spending reductions equal to the amounts so designated.
as introduced
Official: To require
any amounts remaining in a Member's Representational Allowance at the end of a fiscal year to be deposited in the Treasury and used for deficit reduction or to reduce the Federal debt.
as introduced.
Official: To provide that
no automatic pay adjustment for Members of Congress shall be made in the year following a fiscal year in which there is a Federal budget deficit.
as introduced.
By 2030, the CBO projects that debt will more than double to 146 percent of GDP. The only good news, if it can be called that, is that the U.S. is not alone. Two recent studies by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) highlight the significance of the global debt challenge and stress the
need for governments to aim higher than short-term deficit reductions. For the U.S., one of the most poorly positioned countries, addressing the long-term debt challenge must include prompt reform of Social Security, Medicare, and Medicaid. ...
A short-term focus on deficit reduction, such as G20 nations’ pledges to halve deficits by 2013, will do little to pull nations back from the brink. The U.S. domestic situation is so severe that a fiscal adjustment of 12 percent of GDP would be required to stabilize debt at 60 percent of GDP, which is even higher than Greece’s 9.2 percent adjustment.
Anyone looking for serious fiscal leadership from President Obama in his State of the Union Address could have been nothing but disappointed.
He had the right narrative: jobs, investment, competitiveness and fiscal responsibility. But when it came to leadership on actually fixing the fiscal situation -- the hard part, as opposed to soft and fluffy wordsmithing -- there was none to be found. ...
President Obama is still the only one who can use the bully pulpit to set the stage for these tough policy choices and bring all the parties to the table. Here is what he should do.
Set a fiscal target:
Make the target law:
Get into the details:
Hold a budget retreat:
If the president doesn't use his upcoming budget to get specific, at the very least he needs to find a way to force the discussion with everyone at the table.
Congress needs to know these folks are ready for the real work to begin. Here are some lessons from the day.
Put everything on the table
Pay for what you spend
People want tax reform
House GOP budget
We need budget fail-safes
Voters are ahead of many politicians
The people are willing to make sacrifices as long as they are part of a budget that truly fixes the problem and in which they believe they are treated fairly. If only politicians would follow the lead of the general population instead of the extremes of their parties.
In testimony before the Senate Budget Committee, Alice Rivlin argues that America's urgent
need to reduce future debt is also a major opportunity to make the federal government operate more fairly and effectively. Rivlin focuses on key budget issues including tax reform, entitlement reform (specifically slowing the growth of Medicare), budget process reform and using discretionary spending caps to increase the effectiveness of federal programs.
The way the government does business with the private sector and how it interacts with the public are two of the most fundamental exercises of a republic, and these initiatives represent the
groundwork for a more efficient, open, and transparent government.
Cutting duplicative or unnecessary programs in the FY 2010 and 2011 budgets
Eliminating low performing agency programs
Freezing non-security discretionary spending for three years beginning FY 2011
Reducing no-bid and high-risk federal contracts
Obtaining expedited recession authority
Creating a federal "do not pay" list
Limiting improper payments
Reducing high risk internet technology projects across federal agencies
Creating open government plans for federal agencies
Bringing more transparency to federal spending
