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Simpson and Bowles Praise President's Budget

April 10th, 2013
in econ_news, syndication

Econintersect:  The co-chairmen of the 2009 Fiscal Policy Review commission have issued a statement that gives limited praise to the budget proposal for fiscal year 2014.  The statement indicates that the budget is a "step in the right direction" but "does not go as far as we believe is necessary to put our nation's fiscal house in order".  The statement continues top maintain the commission conclusion that the correct economic path for the U.S. is to "keep the debt declining as a percentage of the economy over the long term".

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Follow up:

The full text of the statement from the Moment of Truth Project:

WASHINGTON, DC -- Erskine Bowles and Alan Simpson, co-chairs of the Moment of Truth Project, released the following statement on President Obama's Fiscal Year 2014 budget proposal. The budget incorporated many aspects of the last deficit reduction offer the President put forward during fiscal negotiations last December. Bowles and Simpson announced a framework and principles for deficit reduction in February which sought to identify potential basis for compromise between the parties, and they plan to release a detailed version of their proposal later this month.

"We are encouraged to see that the President's latest budget continues to focus on deficit reduction and reflects many of the tough choices and compromises contained in the last offer he made in budget negotiations with Speaker Boehner in December. In addition to calling for substantial savings by indexing the budget and tax code to the chained CPI, which is a more accurate gauge of inflation, the budget includes a number of changes to reduce spending, slow health care cost growth, and eliminate backdoor spending in the tax code.

During last fall's budget negotiations, President Obama and Speaker Boehner made substantial progress in negotiating a plan to put the debt on a sustainable path while incorporating many of the same goals and principles we put forward in the Fiscal Commission. The President deserves credit for putting forward a formal budget proposal that reflects the progress made in those negotiations.

While the President's proposal is a step in the right direction, it does not go as far as we believe is necessary to put our nation's fiscal house in order.  It achieves far less deficit reduction than the Fiscal Commission and only briefly stabilizes the debt as a percentage of GDP at a level that is already too high.  Further savings will be necessary to put the budget on a fiscally sustainable course and keep the debt declining as a percentage of the economy over the long term - particularly in our health and retirement programs.

However, the President's budget does provide a solid basis for the bipartisan discussions necessary to move the process forward in a constructive way. Going forward, the President must continue to work to establish an open dialogue with Republicans and Democrats in Congress and to educate the public about the tough choices that will be necessary to bring our debt under control. Building that trust is essential to allowing leaders in both parties to work toward a principled compromise that not only brings our debt under control but helps foster vibrant economic growth as well."

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