CRFB's Marc Goldwein Discusses the Federal Budget
Earlier today, the New America Foundation held the event "Red Ink: Inside the High-Stakes Politics of the Federal Budget", focusing on Wall Street Journal economics editor David Wessel's book of the same name. The event also included CRFB senior policy director Marc Goldwein and was moderated by New America fellow Noam Scheiber.
The conversation touched on a number of topics in the budget. Of course, some of the discussion focused on the fiscal cliff. Both Goldwein and Wessel felt that going over the cliff would be extremely damaging to the economy, and that the cliff would do harm well before it would hit. As for the propsects of a fiscal plan, neither were overly optimistic that something would get done before the end of the year, but they both spoke about the possibility of agreeing to an overall framework of debt reduction to be filled in early next year. Goldwein also pointed out that many of the policies that would likely be in the discussion have already been written into legislative language; thus, lawmakers could move quickly if they made an agreement.
On health care, both noted how more needs to be done on controlling health care costs. Wessel opined that down the road there could be bipartisan support for a premium support model for Medicare down the road, given that the new health care law will be creating exchanges for the under-65 population, and it's not inconceivable to see how such a proposal could gain ground for the over-65 population.
On taxes, both agreed about the need for tax reform to raise revenue, although both acknowledged that politically the task would be difficult. Goldwein did say, though, that his time on the Fiscal Commission showed that starting with a tax code with no tax expenditures and forcing lawmakers to raise rates to pay for ones that they add back in is a very helpful framework to go about it. See Goldwein and Paul Weinstein's paper "Less is More: The Modified Zero Plan" for a more detailed discussion of that approach.
Overall, the event was a very interesting whirlwind tour of various issues facing the federal budget. A full video of the event has been embedded below.