Long-Term Budget Should Be Used to Strengthen Fiscal Responsibility, Not Avoid It
For Immediate Release
A number of policymakers are advocating the use of a 20-year budget window, rather than the more traditional ten-year window, for the upcoming fiscal year 2018 Congressional budget resolution.
As Medicare, Medicaid, Social Security, and many tax expenditures are pushing our national debt to unsustainable levels over the long term, we support long-term budgeting. However, it appears the purpose of the proposed extended window is to add to the long-term debt. A longer window could allow budget reconciliation instructions that add to the debt over the next two decades without violating the Byrd Rule, which prohibits higher long-term deficits beyond the years covered by the budget resolution.
Thus, we strongly oppose any effort to use a long-term budget to skirt existing budget rules and worsen the overall fiscal situation.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the following:
The national debt is already at its largest share of the economy since just after World War II and projected to exceed record levels by 2035. I cannot imagine any responsible lawmaker arguing to grow the debt further.
Tax reform should be fully paid for, regardless of the budget window. If the only purpose of moving to a 20-year budget window is to add to the debt, then it is a gimmick.
Given how myopic today’s budget process is, more long-term budgeting is surely needed. Long-term budgeting potentially has many benefits, including making transparent the fiscal effects over the long run and providing guidance to lawmakers when designing policies to put our fiscal situation on a sustainable glide path as the population ages.
Unfortunately, many seem more interested in abusing long-term budgeting than using it properly. If the goal is to enact a massive tax cut that expires after two decades instead of one, the longer window will merely magnify the fiscal irresponsibility that would come from a shorter-term tax cut and will bring us no closer to fixing our costly and underfunded entitlement programs.
We need tax policies that help grow the economy and as a result improve the long-term fiscal picture. The best way to achieve this goal is through thoughtful and fiscally responsible tax reform, not fiscally irresponsible tax cuts that grow the debt.
The budget resolution must facilitate such reform and prevent policies that add to the debt. Using 20-year projections to ensure reform is truly fiscally responsible and pro-growth is a great idea. All the better if the 20-year window encourages much-needed structural entitlement reforms.
Using a 20-year window to provide for a massive debt-busting tax cut makes no sense at all.
For more information contact Patrick Newton, Press Secretary, at Newton@crfb.org.