The Committee for Economic Development (CED), an influential organization of business leaders and educators, released a report on March 5, 2003, titled "Exploding Deficits, Declining Growth: The Federal Budget and the Aging of America."

One of its specific policy recommendations opposes the President’s economic growth plan:

“CED strongly opposes any short-term stimulus program that is not combined with a plan to restore longer-term budget balance. We are specifically concerned that the Jobs and Growth Package proposed by the Administration would raise the cumulative 2003-2013 deficit by about $920 billion (including interest) and raise the annual deficit ten years from now by about $100 billion, does not meet this test.”

The CED also finds that additional revenue will be necessary, in addition to spending cuts, and urges Congress and the Administration to forego, at this time, any additional tax reductions, including the permanent extension of the 2001 tax cuts which currently will expire after 2010. The CED encourages exploring alternative or additional long-term sources of revenue through taxation to support the country’s growth objectives and energy needs. While it calls for restraining spending, it specifically objects to budget cuts that reduce public investments that are important for economic growth, like “education and training programs that build human capital, research and development activities that advance knowledge, and infrastructure investments that support the private sector.”

While we may disagree with some other policy recommendations, like reducing non-security discretionary spending below its historical level, or restructuring Social Security and Medicare, this report, by business leaders, is important:

• For its opposition to the President’s economic growth plan;
• For its call for increased taxation to insure that we have the revenue necessary to meet important priorities, and; and
• For its recognition that we should not scrimp on domestic investment that is important to economic growth and that reductions in discretionary spending should not be born by low-income and vulnerable Americans. The report specifically finds that “the burden of fiscal restraint should not be placed disproportionately on low-income families with little political voice.”

The report also recognizes the fiscal difficulty of the states, almost all of which much balance their budgets. Those crises will be compounded if the federal government tries to solve its deficit problems by passing increased responsibilities to state governments without providing the long-term federal revenue sources that will be necessary for states to accomplish educational reforms, front-line homeland security, welfare reform, and Medicaid, for example.

The CED report finds that estimates by the Congressional Budget Office (CBO) sharply minimize the actual amount of deficits because they fail to take into account future policy decisions. The CBO estimates are based on current law, and do not include the costs of policies that have not yet been, but are likely to be, enacted. For example, the report cites the likely extension of the 2001 Bush tax cuts, the need to reform the Alternative Minimum Tax, and new national defense and homeland security requirements, all of which represent big costs that will vastly increase deficits.

Finally, it is noteworthy that the CED report also calls for seriously thinking about and examining long-term fiscal priorities and goals, in light of future needs and challenges. The costs of fiscal restraint must be distributed equitably, so the burden does not fall on low-income Americans who lack a strong political voice.

The CED and the Concord Coalition also issued a joint statement which is noteworthy for its recognition that “the Administration’s new [economic growth] plan is problematic” because it will result in larger long-term deficits.

The CED report is evidence that opposition to the President’s economic growth plan and extension of the 2001 tax cuts, including permanent repeal of the estate tax, is not limited to progressives, but is becoming widespread.