This morning, the President signed an executive order establishing a new, bipartisan National Commission on Fiscal Responsibility and Reform. The Commission’s co-chairs – former Clinton White House Chief of Staff Erskine Bowles and former Republican Senate Whip Alan Simpson – will bring Republicans and Democrats together to help tackle one of our looming fiscal challenges.
With members appointed by the leaders from both political parties in both houses of Congress as well as the President, the Commission’s objective is to put forward proposals to balance the budget excluding interest payments on the debt (the so-called primary budget) by 2015 and to meaningfully improve the long-term fiscal outlook. Meeting the medium-term target means that by the middle of this decade, we would be paying for the operations and programs of the federal government and not increasing our debt relative to the size of the economy; under current projections, the result would be stable overall deficits (including interest payments) hovering around 3 percent of GDP. The Commission will also examine changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal government over the long term.
To report out a recommendation, the Commission would need 14 out of 18 votes, ensuring that any report will have bipartisan support. The Commission will issue its recommendations by December 1, 2010, and the leaders of both the Senate and the House have assured us that they will bring these recommendations to a vote before the end of the current Congress.
In the past, our nation’s leaders used extraordinary processes – much like this fiscal commission – to construct solutions that, for example, helped address Social Security’s looming imbalance in the early 1980s. We believe that the National Commission on Fiscal Responsibility and Reform can be just as successful.
Erskine Bowles was a key architect of the 1997 bipartisan budget agreement which helped put it into surplus, and Alan Simpson – throughout his almost two decades in the Senate – was a consistent voice for fiscal discipline and commonsense solutions. I am glad that they have decided to serve their country once more, and look forward to the leadership of both parties on Capitol Hill making their appointments so that this Commission can begin its important work for the American people.
Peter Orszag is the Director of the Office of Management and Budget