PRESS RELEASE
-For Immediate Release-
December 1, 2010

Contact: Brian Gumm, (202) 683-4812, bgumm@ombwatch.org

OMB Watch Pans Deficit Commission Plan

WASHINGTON, Dec. 1, 2010—OMB Watch today panned the plan proposed by the co-chairs of the National Commission on Fiscal Responsibility and Reform to reshape the nation’s fiscal priorities. While the plan contains some praiseworthy provisions targeted at the tax code and the federal budget process, overall, it represents an unfortunate step backward in meeting the needs of the nation’s working families.

Craig Jennings, Director of Federal Fiscal Policy at OMB Watch, said, "The commission, in its zeal to balance the budget in what it sees as a politically palatable way, failed to equitably distribute the burden of deficit reduction among all Americans."

Certain elements of the commission’s plan, "The Moment of Truth," deserve to be highlighted for the improvements that they would make in the federal budget process, including ending the abuse of emergency spending and setting aside funds to pay for unforeseen disasters. Also praiseworthy is the commission’s recognition that the $1 trillion in tax breaks found in the tax code, known as tax expenditures, are a form of spending and should be treated as such by Congress.

Unfortunately, as a whole, the proposed plan is a misguided attempt to confront the nation’s short- and long-term fiscal challenges. It ultimately balances the budget on the backs of the middle class, cripples the ability of the federal government to protect Americans, and diverts revenue enhancements to decrease tax rates for the wealthy instead of to reduce the deficit.

The plan also fails to confront the primary driver of the long-term fiscal imbalance – rapidly rising health care costs. While the commission recommends certain changes in Medicare and Medicaid that would curtail some costs through 2020, it has no solutions to stem the doubling of federal spending on health care between 2020 and 2050. Additionally, the commission has seen fit to put forward benefit reductions and tax increases to “fix” Social Security, yet Social Security plays no significant role in the degradation of the nation’s short- and long-term deficits.

The commission’s plan also unwisely places an arbitrary cap on federal revenues. Jennings noted, "By restricting the federal government’s ability to provide sufficient revenue for our national priorities, the plan would make it even harder to responsibly balance the federal budget, especially if unforeseen circumstances arise."

At the same time, setting random caps on discretionary spending, like the ones in the proposal, would seriously hinder the ability of the federal government to provide working families with vital services such as education, employment resources, transportation infrastructure, and access to nutrition.

Jennings added, "Should the commission vote to approve this plan for congressional consideration, OMB Watch would strongly encourage Congress to reject it." He noted that other plans, such as those by Rep. Jan Schakowsky (D-IL) (see http://schakowsky.house.gov/images/stories/1118_Schakowsky_Deficit_Reduction_Plan.pdf), the Citizens’ Commission on Jobs, Deficits and America’s Economic Future (see http://www.ourfuture.org/files/documents/citizens-commission-report-final.pdf), and Our Fiscal Security (see "Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility," http://www.ourfiscalsecurity.org/storage/Blueprint_OFS.pdf), do far more to address the actual budget problems we face today while strengthening that which makes our nation great.

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OMB Watch is a nonprofit research and advocacy organization dedicated to promoting government accountability, citizen participation in public policy decisions, and the use of fiscal and regulatory policy to serve the public interest. Find OMB Watch on Facebook and Twitter.