CRFB Outlines Dos and Don'ts for Budget Negotiations

This afternoon, CRFB released a paper that lays out the dos and don'ts for the Biden group negotiations. We provide a list of goals to accomplish and a number of steps to avoid.

The things we need to see are:

  • An increase in the debt ceiling as soon as possible
  • A debt deal that calls for $4 to $5 trillion of deficit reduction
  • A deal that has a down payment that includes steps to reforming entitlement programs
  • A deal that includes a process for making the necessary further changes to entitlements and taxes

The things we need to avoid:

  • Breaching the debt limit
  • Failing to address the debt before raising the debt limit
  • Using budget gimmicks to inflate the amount of savings
  • Deferring decisions until after the 2012 elections

In addition, we included a few helpful appendices that outline some of the common-ground policies, options to reduce health care costs, and options to make Social Security solvent.

The major point to take from this paper is that while not raising the debt ceiling would be catastrophic, not using this opportunity to address our debt would also be a poor outcome. We need to get a large fiscal plan that addresses the drivers of our long-term debt and doesn't use any phony accounting.

Click here to read the full paper.