US Budget Group Says Tax Votes Must Be Followed By Defict Plan

–Concord Coalition: Tax Votes Must Be ‘Followed’ By ‘Credible’ Cuts
–Tax Bill ‘Can Only Be Justified’ If Deficit Plan Follows

By John Shaw

WASHINGTON (MNI) – The Concord Coalition says that congressional
passage of the large tax and spending plan now before Congress must be
“promptly followed by enactment of a substantial deficit-reduction plan
that would take effect as the economy recovers.”

In a policy statement, the budget watchdog group said that
policymakers now face “two distinct challenges”: helping revive a
sluggish economy and putting in place long-term fiscal policies that
address the nation’s large and growing budget deficits.

The Concord Coalition said that congressional passage this week of
a $858 billion tax and spending package “can only be justified” if it’s
followed by a “credible” deficit reduction plan.

However, it noted that as Congress’s Lame Duck session comes to an
end “there is no immediate prospect of a vote on a comprehensive
deficit-reduction package.”

Budget experts agree that as the Obama administration scrambles to
line up support for the tax and spending agreement that will be
considered by the House and Senate, it has clearly decided that it must
focus its primary energy on boosting economic growth in the near term.

However, Bob Bixby, executive director of the Concord Coalition,
said that passage of the tax and spending package increases the urgency
for President Obama and congressional leaders to offer “very serious”
fiscal plans next year.

Both the Concord Coalition and the Center for A Responsible Federal
Budget, another budget watchdog group, have said that ideally a credible
deficit reduction plan would be tightly linked to the $858 billion tax
and spending package.

But lawmakers are eager to end the Lame Duck session at the end of
this week.

Fiscal experts contend that critical fiscal events will occur next
winter and spring when the White House and congressional leaders release
their new budgets.

These budgets, experts say, must show that a credible path to
fixing the nation’s fiscal mess is at least being envisioned.

Obama will release his new budget in February. Sen. Kent Conrad,
the Democratic chairman of the Senate Budget Committee, and Rep. Paul
Ryan, the incoming Republican chairman of the House Budget Committee,
will offer their fiscal alternatives by March.

Conrad repeatedly says that Congress and the administration must
begin to at least plan for a critically important “pivot” from a fiscal
policy focused on boosting the economy to a long-term plan that moves
the federal budget toward balance.

** Market News International Washington Bureau: (202) 371-2121 **

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