MY VIEW: Maya MacGuineas & Thomas Rippon
Today in an op-ed in The Patriot News, CRFB president Maya MacGuineas and Pennsylvania Fix the Debt Co-chair Thomas Rippon call for bipartisan compromise from our national leaders in putting our debt on a sustainable path. They argue that though the nation successfully averted the fiscal cliff through the passage of the American Taxpayer Relief Act, nothing significant was achieved in terms of a fiscal plan that puts our debt on a downward trajectory.
Of particular concern to MacGuineas and Rippon is the failure of the agreement in tackling the issues of rising entitlement costs and inadequate revenues. Unless major reforms are undertaken, there will remain a "yawning gap" between revenues and outlays. They write:
Nothing much was achieved by the “successful” juke to avoid the fiscal cliff.
Poor leadership is taking a toll on the businesses and individuals who participate in our economy. Inaction is not an option. And the recent legislation averting the fiscal cliff, while not inaction, was wholly inadequate to address the immediate challenge and associated tasks we face. We long for the bipartisan days of House Speaker Tip O’Neil and President Reagan.
For months leading up to the Jan. 1 deadline, the private sector, particularly small businesses, voiced concerns over economic and political uncertainty; they sidelined investment and delayed plans to hire. Gridlock in Washington prevented any real progress. And the ultimate last-minute deal punted on the tough decisions to rein in the federal debt.
Though Congress and the Obama administration managed to eke out a deal to avert the fiscal cliff, the agreement does little to boost confidence in the short-term. And it does nothing to seriously slow down the unsustainable trajectory of our national debt.
Simply put, the future cost of our entitlement programs far outstrips our tax code’s ability to fund them. And we’ll need major reforms on both sides of the ledger in order to close the yawning gap between revenues and outlays.
But all hope is not lost. MacGuineas and Rippon believe that there is still a chance for our elected officials to do away with political games and come to a compromise on entitlement and tax reforms. In their words:
If Congressional Democrats and Republicans really want to help economic growth and job generation, they need to stop focusing on outmaneuvering each other and start focusing on bipartisan solutions to our long-term fiscal problems.
Businesses rely on policy and economic certainty, and a comprehensive plan to that bends down the trajectory of our long-term debt and ends the status quo of lurching from one crisis-induced mini-deal to another would help immeasurably.
Such a plan must address the problem from all sides. This includes smarter spending as well as entitlement and tax reform. Additionally, these changes need to be implemented gradually to avoid creating shocks in the economy.
The parties need to return to the negotiating table now and show the courage to work together on a deal that does not simply represent the lowest common denominator, but is big enough to stabilize the debt and put it on a downward path.
They have a chance to demonstrate Washington can still compromise to help restore confidence. Most importantly, it would reassure the country’s businesses, large and small, and help stimulate growth and investment.
Click here to read the full op-ed.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.