Synopses & Reviews
After enjoying a brief period of a budget surplus, the federal government is now expected to run deficits of nearly $4 trillion over the next decade. A group of Brookings scholars with high-level government experience propose three alternative plans that are more responsible than the current path. Sawhill, vice president of the Economic Studies program at Brookings, was formerly the associate director of the Office of Management and Budget. Rivlin, a senior fellow at Brookings, served as the founding director of the Congressional Budget Office, director of the Office of Management and Budget, and vice chair of the Board of Governors of the Federal Reserve System.
Synopsis
The United States is standing at a critical juncture in its fiscal outlook. After experiencing a brief period of budget surpluses at the turn of the century, the federal government will run deficits that add about $4 trillion to the national debt over the next decade. Substantial deficits will likely continue long into the future because the looming retirement of the baby boom generation will raise spending in Social Security, Medicare, and Medicaid. At the same time, the federal government appears to be neglecting spending in key areas of social and economic policy. The nation thus faces a vital choice: continue down a path toward future fiscal crisis while under investing in critical areas, or increase resources in high-priority areas while also reducing the overall budget deficit. This choice will materially affect Americans economic status and security in the immediate future as well as over long horizons. In "Restoring Fiscal Sanity," a group of Brookings scholars with high-level government experience provide an overview of the countrys likely medium- and long-term spending needs and the resources available to pay for them. They propose three alternative fiscal paths that are more responsible than the current path. One plan emphasizes spending cuts, the second emphasizes revenue increases, and a third is a balanced mix between the two. The contributors address the policy choices in such areas as defense, homeland security, international assistance, and programs targeted to the less advantaged, the elderly, and other domestic priorities. In the process, they provide an understanding of the short- and long-run trade offs and illustrate how the budget can be reshaped to achieve highpriority objectives in a fiscally responsible way.