Laying the Path to Fiscal Responsibility
Posted byon April 27, 2010 at 10:30 AM EST
The President formed the National Commission on Fiscal Responsibility and Reform because he believes that the path to fiscal stability begins with bi-partisan cooperation. Today, the Commission met with the President and held its first meeting, where I joined them to discuss the Nation’s unsustainable fiscal trajectory and the importance of the task before them.
Recognizing the fiscal future that we face, the Administration has taken major steps to restore fiscal responsibility. The President’s Budget includes more deficit reduction than proposed by a President in any budget in over a decade; by 2015, it would cut the deficit from 5 percent of GDP to 4 percent of GDP. Furthermore, the comprehensive health insurance reform we have just enacted represents an unprecedented effort to address the forces underlying rising health care costs, and is projected to lower future deficits by more than $100 billion in the first decade and by more than $1 trillion in the next.
More must be done, however. The Commission is charged with recommending measures to reduce the deficit to about 3 percent of GDP by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers — a key measure of fiscal sustainability. The Commission is also tasked with proposing policies to meaningfully improve the long-run fiscal outlook.
The options to further reduce the deficit may not be popular, but they are necessary. Success will require a commitment from both parties to engage in constructive and honest dialogue, and I look forward to working with the Commission in the weeks and months ahead.
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