Washington, DC – Congresswoman Carolyn B. Maloney (D-NY), Chair of the U.S. Congress Joint Economic Committee (JEC), released the followed statement today reacting to the National Commission on Fiscal Responsibility and Reform’s recommendations for reducing the federal deficit:
“The plan is thorough and serious, and the Commission deserves credit for laying out a comprehensive assessment of the fiscal challenges ahead. I agree with several of the overarching principles upon which the plan rests. Specifically, there’s no easy way out of the fiscal mess and we can’t keep kicking the can down the road; we must be careful not to jeopardize the fragile economic recovery as we take actions to reduce the deficit in the medium and long-term; and, we need to protect the most vulnerable among us. These are all views and values I share.
“But, unfortunately, as we dig into the details, the recommendations fall short in some areas while overreaching in others.
“First, the plan does not place enough emphasis on the importance of economic growth in bringing down the deficit over time. A recent analysis by economists William Gale and Alan Auerbach concludes that increasing our economic growth over what is forecast by 0.5 percent each year for the next twenty years would reduce the amount of deficit cutting required by up to 50 percent. While exceeding economic forecasts by such an amount is ambitious, it’s clear that generating solid, sustained growth is a key piece of deficit reduction.
“Second, I’m concerned that rather than thinking too small, the Commission has bitten off more than is feasible or desirable. In the name of deficit reduction, the report recommends remaking our tax code, removing the mortgage interest deduction, eliminating the deductibility of health benefits, raising the retirement age and cutting Social Security benefits. Let’s be clear: we can get the deficit under control without harming our senior citizens and without stripping away a key homeownership incentive at a time when the housing market remains weak.
“Third, the thorny issue of health care costs, which really is at the core of our long-term deficit problem, is not adequately addressed. The report assumes significant health care savings but doesn’t adequately specify how those savings are achieved.
“Finally, the recommendations remain too heavily weighted to spending cuts. Yes, we have to balance cuts in programs with increases in revenue. But that ratio must be more in balance. The program cuts required by these recommendations far outweigh the revenue increases and would be felt disproportionately by middle- and low-income Americans.
“We will see how the vote plays out on Friday and whether or not the recommendations garner the 14 votes needed to send the report to Congress for a vote. Regardless of the vote tally, it’s clear that the next Congress must take up this issue when it begins its work in January. The Commission’s recommendations provide a useful starting point. From here, we need to uncover the best path to getting our medium and long-term deficit under control without risking our economic recovery or asking some Americans to shoulder a disproportionately large share of the sacrifice. That is the challenge before us and we must meet it.”
Joint Economic Committee, established under the Employment Act of 1946, was
created by Congress to review economic conditions and to analyze the
effectiveness of economic policy.