‘Line’ Items: Columbus Day Edition
Day of “Discovery” – Today we celebrate the man who quasi-discovered the Americas with a quasi-holiday that not everyone gets off (including the Line). In that fine tradition, we “discover” some fiscal facts.
The Deficit is High – The Congressional Budget Office on Thursday in its Monthly Budget Review estimated that the fiscal year 2010 federal budget deficit will be just under $1.3 trillion. At 8.9 percent of GDP, that is the second highest (behind last year) as a share of the economy since 1945. The Treasury Department will release the official deficit figure later this month.
Washington is Too Dysfunctional – A bipartisan group of former members of Congress recently sent a letter to congressional candidates saying that there is currently too much focus on partisan politics and not enough attention to problem solving. Saying that the “political system has not shown itself to be up to the task” in confronting the major challenges facing the country, the group calls for more cooperation, compromise and civil debate. Rediscovering pragmatism and bipartisanship could help solve our fiscal problems.
In a politically diverse but ultimately centrist nation, it is axiomatic that the country's major problems are going to have to be solved through compromises worked out between the parties. That's especially the case for the problems that require tough solutions - like convincing taxpayers to endure some short-term pain for the promise of long-term fiscal stability. That will require partisans on both sides to give ground on some of their cherished beliefs, to lose some traction on a 'wedge issue' that can be used in campaigns against the other side, in order to find the broad coalition necessary to make a policy work.
Earmarks Need Reform – A group of lobbyists and government reform organizations have come together to promote earmark reform. The group has offered five principles for earmark reform that would make the process more transparent and reduce the link between earmarks and campaign contributions. Members of the coalition met with congressional offices last week to discuss their ideas.
Unemployment Still High – The official unemployment rate remained at 9.6 percent in September. Unemployment remains high as policymakers continue to debate how to spur the sluggish economy in the short run while not exacerbating the longer run fiscal problems marked by high public debt. CRFB President Maya MacGuineas offered some ideas for fiscally responsible stimulus last week.
Government Could Be More Efficient – A group of high-tech executives said in a report last week that the federal government could save over $1 trillion by 2020 by following the lead of corporations and streamlining operations through innovative technologies and processes.
U.S. Needs Better Fiscal Policy – Federal Reserve Chairman Ben Bernanke gave a hard-hitting speech last week on the need for fiscal sustainability and fiscal rules. The Fed usually concentrates on monetary policy, so the speech was a clear sign of the importance of fiscal issues to the economy. CRFB applauded the remarks on the need for fiscal rules that are strong and transparent.