Pay-go is right way to go, but needs to go farther
Chief economist, Concord Coalition, a nonpartisan deficit watchdog group; former chief economist, House Budget Committee under Chairman John Spratt, D-S.C.
What the president got right: I like the administration's endorsement of pay-go budget rules , its call for a bipartisan fiscal commission to get deficits down to a more sustainable level, and I believe the administration is serious about supporting the economy now and reducing the deficit later.
What the president got wrong: I don't like that the administration and congressional versions of pay-go exempt most of the Bush tax cuts, AMT relief, and the Medicare "doc fix." I don't understand how the administration can simultaneously blame the Bush tax cuts for the deficits they inherited and propose continuing them as the single most costly deficit-financed item in their own budget.
I worry about how easy it will be to form a truly bipartisan commission that can come to some agreement over the necessarily tough policy choices, when Congress can't even agree in a bipartisan manner on the commission itself.
I worry that there is too much pressure for more stimulus spending (including tax cuts) that even if not very effective as economic policy will be politically difficult to resist now or turn off later -- that we will end up with some permanent, deficit-financed policies that will turn out to be ineffective for the short-term economy while downright harmful to the longer-term economy.
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