CRFB Turns 35 - We Are Old Enough to Remember When...
The Committee for a Responsible Federal Budget was incorporated on June 10, 1981. Our 35th birthday is a good occasion to look back at some of the major fiscal accomplishments of our time and what can be learned from them.
We are old enough to remember when:
Democrats and Republicans came together to save Social Security. With insolvency looming in 1983, a bipartisan commission and negotiations between Republican President Ronald Reagan and Democratic Speaker of the House Tip O’Neill (D-MA) produced a package extending Social Security solvency for half a century through a combination of tax and benefit changes, such as increasing the payroll tax and gradually raising the retirement age.
Congress and the President reformed the tax code. The Tax Reform Act of 1986 eliminated enough loopholes and preferences to reduce the top individual tax rate from 50 to 28 percent and the total number of brackets from 15 to 2 while removing more than 6 million people from the tax rolls. It also reduced the corporate rate from 46 to 34 percent while taxing capital gains at the same rate as ordinary income. A push from the White House and bipartisan cooperation in Congress made the landmark reform possible.
Policymakers agreed to a major budget deal in 1990. Facing rapidly-growing deficits, Republican President George H.W. Bush and a Democratically-controlled Congress agreed to a package that not only reduced deficits but also made it harder for lawmakers to increase them down the road. The 1990 Budget Deal established new pay-as-you-go (PAYGO) rules and discretionary spending caps that reduced defense, domestic, and entitlement spending while increasing a variety of taxes.
We balanced the budget. From 1998 through 2001 the federal government not only balanced the budget but also ran surpluses for the first time since 1969. Balance was achieved in part because of the 1990 budget deal, the 1993 legislation based on President Bill Clinton’s first budget, and the 1997 budget deal between President Clinton and the Republican -controlled Congress, in combination with relatively low interest rates, a slowdown in health care cost growth, and an extended economic boom.
The Fiscal Commission received majority support on a comprehensive, bipartisan plan to get the national debt under control. In December 2010, the presidentially-appointed National Commission on Fiscal Responsibility and Reform received 11 out of 18 votes in favor of their ambitious set of recommendations to cut spending, overhaul the tax code, and reform entitlement programs. Support for the plan was bipartisan, and in addition to co-chairs Erskine Bowles and Alan Simpson included sitting Senators Judd Gregg (R-NH), Tom Coburn (R-OK), Mike Crapo (R-ID), Kent Conrad (D-ND), and Dick Durbin (D-IL), as well as Congressman John Spratt (D-SC) and presidentially-appointed representatives Alice Rivlin, Dave Cote, and Ann Fudge. Unfortunately, the recommendations – which would have put the debt on a sustainable long-term trajectory – were never considered in Congress.
We need history to repeat itself so that we can again strengthen Social Security for future generations, make the tax code more competitive, and get deficits and debt under control. There are some common themes among these accomplishments that can show the way, such as bipartisan cooperation, presidential leadership, and showing the political will to make some tough decisions regarding all parts of the budget.
We are old enough to remember when bipartisanship was cool. We have been a resource for both sides of the political aisle since the very beginning, when former Congressman Robert Giaimo (D-CT) and former Senator Henry Bellmon (R-OK) brought together former congressional and administration budget officials shortly after they left Congress to form the Committee. We’ve seen a lot since then, and we need to see more in order to put this country on the right track.
For our 35th birthday, we treated ourselves to a facelift. Our newly redesigned website makes our wealth of research and analysis on budget and fiscal policy easier than ever to access.