Budget Conference Stalling, Must Pick Up Pace

The budget conference committee – composed of all 22 members of the Senate budget committee and 4 members of the House Budget committee – met yesterday for the second time as lawmakers continued negotiations to reconcile the differences between the House and Senate budget resolutions for fiscal year 2014. Conferees discussed ways to improve the country’s fiscal outlook and stabilize the long-term trajectory of the debt relative to the economy.

Unfortunately, little progress was made as elected officials seemed unwilling and unable to compromise on the deep differences that exist over fiscal policy – namely tax loopholes, overall spending levels, whether or not to replace sequester (and how), and to what extent entitlement reform should be on the table.

While the leaders of the committee, Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) are still saying the right things, voicing optimism that they will be able to strike a deal and acknowledging that the public is not privy to the bevy of meetings occurring behind the scenes, Americans are right to worry.

This is especially true if you are in the camp that believes we have a serious spending problem, and by extension, a debt problem. Because while it is true that short term deficits have indeed improved, the reality is that Relative to the economy, the national debt is the largest it has been since the immediate aftermath of World War II. And it is only getting worse.

The Congressional Budget Office (CBO) projects that the debt will rise from 73 percent of GDP today to 100 percent of GDP by 2035 and twice the size of the economy by 2065. And as a result, already high interest payments on the debt will get that much worse, ballooning to $1.8 trillion in 20 years, crowding out important investments in education, transportation infrastructure, and research and development.

Douglas Elmendorf, Director of the aforementioned CBO, a completely nonpartisan research resource for Congress, testified before the conference committee in Wednesday’s meeting and echoed the long-term fiscal challenges facing the country. “Under CBO’s extended current-law baseline, federal debt held by the public, which is already quite high by historical standards, is projected to reach 100 percent of GDP 25 years from now, even without accounting for the harmful economic effects of rising debt,” Elmendorf said, later remarking that “Of course, a clear resolution of the long-term budgetary concerns would be beneficial.”

Maya MacGuineas, the head of the group I am a part of – the Campaign to Fix the Debt – said in a statement yesterday, “It is critical that conferees use this opportunity to not only agree upon a budget for FY2014 but also to take steps to place the country on a more sustainable fiscal course over the long-term.”

So like her, I urge conferees to end the madness and agree on a budget conference report that addresses the long-term challenges by putting the debt on a downward path as a share of the economy. I also hope that a plan will be reached to fully offset sequester reduction with other savings, and includes an expedited process for tax and spending reforms once outside of the conference. Because as I have said many times before, reducing the nearly $1.3 trillion in annual tax expenditures would be one of the smartest and easiest ways to gain the revenue Democrats demand and the savings Republicans crave. It is a win-win.

There are many other ideas that The Campaign to Fix the Debt has outlined in a paper, listing the priorities for the budget conference committee’s report, which the conferees are scheduled to deliver on December 13. I encourage you to read them and do what you can to get involved and urge Members to act soon. We need it.