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  • The Domenici/Rivlin Debt Reduction Task Force

    Today in Washington, the Bipartisan Policy Center (BPC) launched its new Debt Reduction Task Force, chaired by former Sen. Pete Domenici (R-NM) and former OMB director and CBO director Dr. Alice Rivlin.

    The task force will aggressively address the abysmal fiscal outlook of the United States economy due to government spending. As Domenici and Rivlin displayed, the amount of debt held by the public is set to reach 100% of Gross Domestic Product (GDP) by 2019. Under the same trajectory, the debt would reach 400% of GDP by 2049. As Rivlin pointed out, however, this outlook is completely unrealistic. Far before the debt reached such gargantuan proportions, lenders would refuse to continue purchasing our debt and the United States would find itself in economic ruin.

    According to Sen. Domenici, “America has the worst economic future that we have ever had.” This sentiment was echoed by former Senator Tom Daschle (D-SD), one of the founders of the BPC, who explained that following the current path, the nation could see basic needs of society pushed aside to make way for out-of-control entitlement spending.

    The Debt Reduction Task Force will address this spending crisis. The task force includes representatives from all parts of the community and from across the political spectrum. What makes the BPC’s task force unique, however, is its commitment to go further than vague suggestions to lower the deficit and control spending—rather, it will create a specific plan for a long-term budget.

    Sen. Domenici and Dr. Rivlin stressed that all measures for reducing the public debt will be on the table when the task force begins its mission. This will include options that may be unfavorable to both Democrats and Republicans. Even Sen. Domenici referenced tax increases, saying they might have to accompany requisite spending reductions to decrease the nation’s debt, which will make it difficult to bring many conservatives on board. But, both he and Ms. Rivlin also emphasized that the task force would not be recommending spending cuts or tax increases that could undermine the economy’s recovery and job creation. Instead, they said, the Task Force will propose long-range policy changes.

    To get spending under control, the Task Force will have to focus heavily on reforming Medicare, Medicaid, and Social Security, the three entitlement programs which devour revenues. And though most conservatives equate “raising revenue” to tax hikes and consequently oppose such measures, this would not necessarily have to be the case. The Task force could create revenue in other ways, as is exemplified by the Cooper-Wolfe SAFE Act (H.R. 1557). This bipartisan commission would consider reforms that make United States tax laws more efficient and more conducive to encouraging economic growth.

    When asked about the political palatability of a proposal that could include provisions unpopular among both Democrats and Republicans, Domenici and Rivlin stressed that Americans will need to be understanding of the severity of the situation, and that its solution might require them to sacrifice. The only other option is to wait to act until crisis is imminent and the power and strength of America has already deteriorated.

    The Task force’s goal is to show that solutions can be forged by working together – before a crisis hits. Regrettably, Congress for many years has proven incapable of addressing the autopilot growth of federal entitlements. As Dr. Rivlin explained, one of the reasons the current Congress is incapable of tackling this problem is the newly-developed viciousness of partisanship in Washington. To Rivlin, the biggest threat to the economy is the federal spending trajectory—and the biggest threat to fixing it is partisanship. It’s unfortunate that everyone but Congress seems to be coming up with solutions.

    Posted in Economics [slideshow_deploy]

    8 Responses to The Domenici/Rivlin Debt Reduction Task Force

    1. Michael says:

      America does not need any tax increases. Instead, the population should elect candidates to Congress who will lower federal spending.

    2. Kevin, Houston, TX says:

      I'm glad to see some veterans of US economic policy deciding the time is now to act on the alarming growth/size of the US debt. There's only so much the public can do ranting to themself about the repeat pattern of failures of our politicians regarding overspending. Policians are supposed to be instruments of the voting citizens, hard to believe the majority of us think nothing of overdrawing our bank account by the trillions. Hopefully they'll also suggest removal of the forces that assisted the US taxpayers into this foolish position; that being the lobbyist and whatever else can be identified to be aiding uncontrolled spending.

    3. Maggie says:

      ThjisG D CROOK never mentions his RIDICULOUS PENSION AND ROLLS NGTROYCE HEALTHCARE P;AID FOR Y US HAPLESSS SLAVES ON THE TABLE OR THE GD MENTAL HEATH THE OLD UJGLY THIEF ADDED FOR HIS F—— RETARDED DAUGHTER.

      READY TO TAKE UP ARMS FOR I REFUSE TO PAY ONE MORE G D DIME IN TAXES FOR THIS UGLY OLD SENILE CROOK! I WISH TO HELL HE WOULD DROP DEAD.

    4. Maggie says:

      YOU ARE ALL G DTHIEVES

    5. Margaret J. Marumoto says:

      I saw your presentation last night on C-Span, and have a suggestion for making one budget item, health insurance, less of a monster:

      All health providers must be required to reduce fees even below what is now standard for Medicare patients. Why should a federal insurance program or private insurance company have to pay more than the average client's annual income for just one essential surgery or other course of treatment? The providers' profits allow them to purchase expensive homes, travel the world, and amass much personal property, and obviously the insurance programs are in effect paying for this affluence!

    6. Bobbie Jay says:

      "TASK FORCE?" All the tasks have been unnecessary and FORCE IS A THREAT! I don't appreciate being threatened by those who work for us….

    7. Howard McCrady Parad says:

      I wish you success. Looking at the 90's when we were able to create a surplus briefly the rapid growth in tax receipts had a tremendous effect. The strong growth in the stock market was a significant factor . In addition to addressing Medicare, Social Security and other expenses, trying to find ways to stimulate economic growth and thereby the stock market deserve serious consideration. I would be happy to volunteer my assistance if I could be of help. Thank you Howard McCrady

    8. Pingback: The Obama Debt and Deficit Commission: Who is Who? | Big Bureaucracy

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