The pursuit of fiscal responsibility
February 25, 2009| By David Talbot
President Obama hosted a "fiscal responsibility summit" at the White House on Monday. On the campaign trail and as President, he has several times called for reducing the budget deficit and tackling runaway spending on entitlement programs.
These are important goals that The Heritage Foundation shares. Reforming out-of-control spending on entitlement programs will be "one of the greatest challenges of the 21st century," Heritage experts Brian Riedl and Alison Fraser said in a memo to President Obama. Current spending on Social Security, Medicare and Medicaid is unsustainable, they explain:
In the coming decades, the cost of these three programs will leap from 8.4 percent to 18.6 percent of gross domestic product (GDP)--an increase of 10.2 percent. Without reform, this increased cost would require either raising taxes by the current equivalent of $12,072 per household or eliminating every other government program. Funding all of the promised benefits with income taxes would require raising the 35 percent income tax bracket to at least 77 percent and raising the 25 percent tax bracket to at least 55 percent.
Heritage vice president Stuart Butler attended this week's summit along with more than sixty members of Congress and other policy experts. He filed this report on his return:
The President said he wanted the sessions to be the first step in a national conversation about how to deal with the long-term fiscal problem. If he truly intends that, this could be a good first step. Lawmakers from both parties shared their views in a respectful and courteous way, as did everyone else, and that's progress.
He can and should build on this by undertaking what I described as an Obama Fiscal Wake-Up Tour, modeled on the bipartisan Fiscal Tour Heritage, Brookings and the Concord Coalition have conducted over the last two years.
If the President, with Democratic and Republican leaders, commits to doing this, and engages the American people in a real conversation about the options to fix the problem, this summit will have been the critical first step. If he doesn't, it will have been a photo-op that merely adds to political cynicism.
A statement released this week by the Fiscal Wake Up Tour lays out four criteria for a special commission that would effectively deal with the long-term fiscal imbalance of our existing economic policies.