budget deficit
My column from today's Roll Call is the first in a series I will be writing over the next year about what it's really going to take to reduce the federal deficit: It's going to hurt and anyone why says otherwise is misinformed (possible), misleading (probable), or just plain lying (very likely).
Just to be clear: No matter what anyone says or what you want to think, there are and will be no silver bullets or magic elixirs.
Spending cuts will reduce services and what the government buys from someone. Revenue increases mean that someone will pay more to the government. There will be some winners, but mostly there will be losers
Unless you still believe in the tooth fairly and Santa Claus, stop believing anyone who says this isn't the case.
Pain Has to Be Added to the Budget Debate
Dec. 13, 2011
Annie Lowery's provocative piece about budget policy is making the rounds this morning. There is a lot to enjoy and a lot of familiar ground to disagree with, but the essential point is worth repeating:
So how does doing nothing actually return the budget to health? The answer is that doing nothing allows all kinds of fiscal changes that politicians generally abhor to take effect automatically. First, doing nothing means the Bush tax cuts would expire, as scheduled, at the end of next year. That would cause a moderately progressive tax hike, and one that hits most families, including the middle class. The top marginal rate would rise from 35 percent to 39.6 percent, and some tax benefits for investment income would disappear. Additionally, a patch to keep the alternative minimum tax from hitting 20 million or so families would end. Second, the Patient Protection and Affordable Care Act, Obama's health care law, would proceed without getting repealed or defunded. The CBO believes that the plan would bend health care's cost curve downward, wrestling the rate of health care inflation back toward the general rate of inflation. Third, doing nothing would mean that Medicare starts paying doctors low, low rates. Congress would not pass anymore of the regular "doc fixes" that keep reimbursements high. Nothing else happens. Almost magically, everything evens out.
This morning, the Congressional Budget Office released its August Update estimating the FY11 deficit would rise $71 billion to $1.066 trillion as compared to its March estimate. The increase comprised $92 billion of legislated deficit increases, $45 billion of deficit reduction from better than expected economic performance, and $23 billion of increased deficit from worse technical estimating assumptions. The FY10 deficit estimate improved $27 billion. See Appendix Table A-1 for the details.
My column from today's Roll Call says something seldom said in mixed company about reducing the deficit: whether it's tax breaks or spending programs, the federal government is going to have to stop doing something...or things.
The Not-So-Secret Truth About Deficit Cutting
June 1, 2010
Forget everything you’ve heard about how hard it is to cut the federal deficit. Once you disregard the partisan rhetoric and put aside the election-year demagoguery, you rapidly come to a conclusion that is seldom stated as directly as this: The federal government is going to have to stop doing some of the things it’s currently doing.
I used my first column for The Fiscal Times to take on all those who insist that the only way to deal with the federal deficit is by cutting spending. Contrary to those who repeat the "it's a spending problem" mantra, spending definitely is not the only issue and spending cuts are not the only possible response.
