Robert Greenstein, Executive Director, Center on Budget Policy and Priorities, delivered testimony before the House Ways and Means Select Revenue Measures Subcommittee. The testimony addressed three points:
- While current budget deficits are not themselves a problem -- large deficits are needed in a deep economic downturn such as this one -- our current fiscal path is simply unsustainable over the longer term. Federal deficits and debt will rise to unprecedented and dangerous levels if current policies remain unchanged.
- Digging ourselves out of this predicament will require action on both sides of the budget -- spending and revenues. We will not be able either to finance the kind of government that Americans want with revenues near their historical level of 18 to 19 percent of gross domestic product (GDP) or to leave current programs unchanged.
- Congress should try to get deficits down to about 3 percent of GDP by mid-decade. Deficits at that level would keep the debt from rising as a share of the economy and thus would go a long way toward reassuring our creditors and putting the budget on a more sustainable path. Congress will face some crucial decisions in the months ahead that will have a large bearing on its ability to attain this goal.
See also CBPP Executive Director Says High-Income Tax Cuts Should Be Allowed to Expire, 2010 TNT 56-49, March 24, 2010.
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