Friday, January 23, 2009

A disparate group of deficit hawks banded together Thursday to demand that Congress and the Obama administration take action to ensure the nation’s financial health.

They fear the evolving stimulus package will increase the nation’s unfunded liabilities. And they were unsettled by a recent Congressional Budget Office analysis showing that most of the infrastructure spending in the stimulus bill will not take place until after 2010.

Speaking at a policy forum at the Rayburn House Office Building, policy analysts from the conservative Heritage Foundation, the liberal Progressive Policy Institute, the bipartisan Committee for a Responsible Federal Budget and the nonpartisan Concord Coalition all agreed that Congress should include serious budget-process changes as part of the stimulus bill and the federal budget.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the united front for budget reform demonstrated the dire straits of the long-term budget situation.

The stimulus provides “an immediate opportunity” to combine government action to address the deepening recession with budget-process changes to tackle the long-term problems, said Stuart Butler of the Heritage Foundation.

President Obama‘s Fiscal Responsibility Summit,” which he plans to hold in February, “is a very good idea,” said Robert Bixby, president of the Concord Coalition, a grass-roots organization that advocates a generationally responsible fiscal policy. “Will it be for show? Or the start of something big?”

Mr. Obama could demonstrate his fiscal bona fides by showing some “fiscal discipline on the back end” as he prepares to borrow trillions of dollars up front, Mr. Bixby said.

Mr. Bixby, like the others, favors establishment of a bipartisan budget commission without preconditions. Democrats could not take benefit reductions off the table, and Republicans could not remove tax increases from the agenda.

Most important, Mr. Bixby and the others said, any commission proposal would require an up-or-down vote by the House and Senate.

Will Marshall, president of the Progressive Policy Institute, described the “central drama of the Obama administration” as the unfolding of “diametrically opposed policies.” The administration must pursue its “fiscal surge” now, while executing an “exit strategy” of “fiscal retrenchment” as the economy begins to recover.

“The Obama administration is saying all the right things,” said Ms. MacGuineas. “It might be moving faster than the commission model, which would be even better.”

For Rep. Jim Cooper, the Tennessee Democrat who has co-sponsored a commission proposal, there isn’t much time.

“The diagnosis, folks, is cancer,” he said.

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