"We hope that President Obama's alternative to the sequester… will spark serious discussions about a major, long-term debt stabilization package"
WASHINGTON, Feb. 5, 2013 /PRNewswire-USNewswire/ -- The following is a statement by Steve Bell, Senior Director of the Economic Policy Project at the Bipartisan Policy Center:
"Despite the fiscal dramas of the past year, today's Congressional Budget Office (CBO) Budget and Economic Outlook shows that policymakers in Washington have made little fundamental progress toward spurring economic growth or controlling the nation's unsustainable debt trajectory.'We hope that President Obama's alternative to the sequester, released this afternoon, will spark serious discussions about a major, long-term debt stabilization package that can be enacted this year. Other plans have been proposed in the House and Senate, indicating that avoiding the sequester remains a dominant concern among policymakers and budget analysts. "The CBO's Alternative Fiscal Scenario (AFS) from its 2012 report has thus far been extremely accurate. Virtually all of the tax cuts that were set to end under current law were extended by 2012 congressional action. The sequester savings of approximately $1.2 trillion during the next decade remain problematic. Cuts to Medicare providers were postponed. The Alternative Minimum Tax (AMT) was permanently patched. CBO's political prognostication was vindicated, unfortunately, by policymakers' unwillingness to seriously face up to our fiscal problems. "In addition, virtually no changes in entitlement program spending or tax reform occurred. The additional revenue raised is a drop in the bucket on our long-term debt path. Finally, while extremely beneficial at the moment, the abnormally low interest rates experienced by the United States continue to hide the enormous interest payments that will eventually occur when interest rates revert to historical post-World War II levels. "Not only have policymakers failed to confront the debt trajectory, but fiscal policy has also been a drag on economic growth, most prominently through the expiration of the 2-percent payroll tax cut that had been in place since 2011.