–Think Tank Launches ‘Getting Specific’ Initative To Sharpen Debate
–Center For Responsible Federal Budget Says Generalities Don’t Help
By John Shaw
WASHINGTON (MNI) – The U.S. fiscal debate, when viewed from the
proverbial 30,000 feet, has some encouraging signs.
After all, almost everyone agrees that spending controls are
central to fixing the nation’s fiscal mess and that entitlement reform
is necessary for long-term budget health.
Likewise on the revenue side of the ledger, almost everyone
participating in the budget debate says that fundamental tax reform is
critical to the long-term health of the American economy. And most, save
the far right of the Republican party, agree that some additional
revenues will be needed to pay for the government that most Americans
appear to want.
But when the budget debate moves closer to the ground much of this
consensus seems to dissipate.
While everyone seeks entitlement reform in the abstract, few agree
on the particulars. Should Social Security be revamped? If so, how? Is
the Medicare program fiscally viable over the longer-term? If not, how
should you scale-it back?
Almost everyone agrees our current tax code is a mess. But there is
no agreement on what alternative should replace it. And every proposal
to boost revenues is derided by its opponents as being confiscatory and
The Center for a Responsible Federal Budget, a fiscal watchdog
group, has recently launched a policy debate called, “Getting Specific:
How To Fix the Budget.”
The budget group argues that policymakers need to rise above
platitudes, cliches and soundbites to tackle the U.S.’s ominous fiscal
“Policymakers and voters recognize that the growing debt is a major
issue that must be addressed,” the budget group says in its Web site.
“Now our leaders must move beyond paying lip service and toward
producing results. Only by offering and discussing explicit proposals
can we move forward,” it adds.
The Center has released two policy papers to highlight the type of
options that have to be considered
For example, its paper on Social Security reform notes that the
program is running a cash flow deficit this year and starting in 2015,
is projected to run deficits “for every year in the future.”
It says that the program’s outlays will grow by more than 1.2% of
GDP by 2030 while revenues will fail to keep up pace and will actually
decline after 2030.
“We need to act quickly to put the program on a sustainable path,
and the longer we wait the more painful the changes will be,” it says.
It then walks through several suggested reforms such as raising the
early and normal retirement ages to 63 and 68 and index them to
longevity, use a more accurate measure of inflation to calculate cost of
living adjustments, slow the growth of benefits for middle and high
income earners and reform the payroll tax to make it more progressive.
Another paper deals with the continued growth of federal health
care programs which it calls “the single largest threat to the nation’s
The paper notes that the Congressional Budget Office has estimated
that direct federal health care costs will reach almost 10% of GDP by
2030 and almost 14% by 2050.
It outlines a number of options to tackle this problem including
medical malpractice liability reform, increase the Medicare eligibility
age to 67, and limiting the tax exclusion on employer provided health
“Health care cost growth continues to present the single largest
threat to the country’s fiscal future,” the report says.
** Market News International Washington Bureau: 202-371-2121 **