Fiscal Policy

WASHINGTON, DC -- The Committee for a Responsible Federal Budget recommends that Congress pass a new budget resolution reflecting the changes in the budget outlook and national priorities as a result of Hurricane Katrina. Before Katrina, there were overruns in the budget in the areas of defense, transportation, energy, agriculture, and veterans’ healthcare. Along with Katrina disaster relief efforts, costs could easily grow to $250 billion beyond what is assumed in the current budget resolution.

For the full press release, please see the attached PDF file.

Samuel Huntington has called it the Lippmann Gap, echoing the American journalist Walter Lippmann in 1943: "Foreign policy consists in bringing into balance, with a comfortable surplus of power in reserve, the nation's commitments and the nation's power." The historian Paul Kennedy has another name for it: "Imperial overextension." Whatever you call this dangerous disease, the symptoms are clear in the US.

The Congressional budget resolution increased the deficit relative to the CBO baseline by $200 billion from FY 2005 through FY 2010. Since passing the budget resolution, Congress has approved several bills that would increase spending above the limits in the resolution. Making matters worse, Congress is poised to take actions this fall that would result in further increases to the deficit beyond those already assumed in the budget resolution.

WASHINGTON, DC -- The Committee for a Responsible Federal Budget released a statement expressing concern about several pieces of legislation Congress is expected to consider before the August recess which will further increase the deficit.

WASHINGTON, DC -- Today the Committee for a Responsible Federal Budget applauded statements by White House staff reiterating the President’s commitment to comprehensive Social Security reforms that addresses the financial challenges facing the system.

"President Bush deserves credit for calling attention to the financial challenges facing Social Security and acknowledging that there is no free lunch in Social Security reform"said Maya MacGuineas, President of the Committee for a Responsible Federal Budget.

WASHINGTON, DC -- The Committee for a Responsible Federal Budget expressed concern over the shift the appropriations process appears to be taking.

The Committee applauded the House for passing all eleven appropriations bills prior to the Fourth of July recess and managing to keep within the tight spending limits contained in the budget resolution, with relatively few gimmicks.

For the full press release, please see the attached PDF file.

WASHINGTON, DC -- Today the Committee for a Responsible Federal Budget warned that the lower-than-anticipated budget deficit for fiscal year 2005 should not be taken as a sign that the country is on a fiscally sustainable course.

The Office of Management and Budget will issue its mid-session review of the budget today. The report will lower OMB's deficit projection significantly as a result of higher-than-anticipated revenue growth.

For the full press release, please see the attached PDF file.

Being a budget watchdog generally involves a healthy degree of pessimism and the last few weeks have provided plenty of reminders why. It was encouraging to see the appropriations process moving forward within the tight spending limits set by the budget resolution. That is, until a political firestorm over veterans benefits erupted, leading to pressure for increased spending.

Jodie Allen Introduced the panel by highlighting the growing mainstream awareness of class-based issues, as evidenced by the recent New York Times and Wall Street Journal series on the topic.

Maya MacGuineas, director of the New America Foundation's Fiscal Policy Program and president of the Center for Responsible Federal Budget, testified before the House Ways and Means Committee's Social Security panel on June 14.

A full text of her prepared testimony is available below in PDF format.