off the charts
POLICY INSIGHT
BEYOND THE NUMBERS

Tackle the Deficit…But Carefully

| By CBPP
Today, the Center’s Executive Director, Robert Greenstein, and Director of Federal Fiscal Policy, Jim Horney, testified before the President’s Commission on Fiscal Responsibility and Reform.  Here’s some of what they said:
We have long argued that the federal budget is on an unsustainable path under current policies — we are among the few policy institutes that regularly develop and issue long-term budget projections — and have for some time urged lawmakers to begin taking the steps necessary to deal with the problem. ...We would like to make a few suggestions about important matters for you to keep in mind as you move forward in this process. First, we think that the President’s emphasis on the goal of stabilizing the ratio of debt held by the public to Gross Domestic Product around the middle of this decade is the right goal. Achieving that goal — which under current projections could be achieved if deficits are reduced to about three percent of GDP — would be a major accomplishment… In addition, we would urge the Commission to keep in mind the President’s recent admonition against too much fiscal restraint while the recovery is still fragile and unemployment remains so high. It would not be wise to have significant fiscal retrenchment take effect in the next couple of years. To the contrary, the economy now badly needs the federal government to extend measures such as extended unemployment benefits and state fiscal relief; failure to do so will further weaken the economy and delay the point at which serious fiscal consideration measures can safely be instituted.
Here’s the full testimony.  You can listen to the testimony by clicking on the player below: