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PPI SUPPORTS DEBT DEAL, BUT WARNS IT'S NOT ENOUGH TO STABILIZE DEBT
Statement by PPI President Will Marshall on the Debt Limit Agreement
WASHINGTON D.C. -- PPI President Will Marshall issued the following statement on the debt limit agreement before Congress:
“The final compromise reached in the debt ceiling debate marks a disappointing end to a standoff that had already reached new lows in self-destructive political brinksmanship. After holding the U.S. economy hostage for weeks in the name of principled deficit reduction, congressional Republicans have exacted a deal that fails to address the structural drivers of our deficits. We were taken to the brink of economic catastrophe, yet this deal still won't stabilize the debt, reform the tax code, or ensure Social Security's long-term solvency.
“President Obama, for his part, passed on the opportunity to stand behind the balanced deficit-reduction approach endorsed by his own Fiscal Commission. The negotiated proposal passed by the House and before the Senate today includes a significant down payment on deficit reduction, but it is an inauspicious start for any long-term plan to pay down our debt. The cuts included in this package focus too much on discretionary spending alone, while tying Congress’s hands to balance those cuts with additional revenue from comprehensive tax reform.
“For all its flaws, the deal has defused the Tea Party’s time bomb and given us another chance at forging a constructive, bipartisan deficit plan. The key to those hopes lies with the special committee of Congress. Unless the committee is willing to go beyond the target in the legislation and tackle revenues and entitlement, this deal will fall far short of what it is needed.
“We need to watch carefully who is chosen to serve on the special committee—whether they are simply stalking horses for the leadership or in fact willing to make hard choices for the benefit of the country. In addition, it is vital that the Obama Administration be engaged in direct and regular communication with the special committee, otherwise this process cannot succeed.
“We are happy there is a trigger built into the deal, in case the special committee fails to deliver its proposals, but we are concerned the triggers do not go into effect until a year after the special committee is created. Furthermore, the one-sided enforcement mechanism also tips the scales too much toward discretionary spending reductions, Excessive cuts of $850 billion would be slashed from the Pentagon’s budget—an amount larger than recommended by the Simpson-Bowles Commission. We wish the trigger had applied to revenues as well.
“We hope that President Obama will show the resolve Americans need from their president to salvage this situation and recapture the political debate going forward. The surest approach to doing that is to fight for the principles endorsed by his Fiscal Commission, including broad tax reform to lower rates and eliminate tax expenditures to raise significant money for deficit reduction. And parallel to that, the president and Congress must put real entitlement reform on the table. Republicans have succeeded in ensuring spending cuts will be included in any deal—it’s now up to President Obama and congressional Democrats to restore balance to the final package between now and 2013.”
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The Progressive Policy Institute (PPI) is an independent research institution founded in 1989 that seeks to define and promote a new progressive politics in the 21st century. Through research, policy analysis and dialogue, PPI challenges the status quo and advocates for radical policy solutions.