Transcript
ALICE RIVLIN: This book is about how to balance the budget. We think its significance in the current fiscal debate is that it actually tries to answer the question: If you wanted to balance the budget in 10 years, how could you do it? What specific spending cuts and/or revenue increases would have to be enacted to eliminate the deficit by 2014?
Now, we don't expect everybody to buy our particular answers. Indeed, we'd be delighted if this book sparked a vigorous debate and lots of counterproposals. Our hope is to move the discussion from should we try to balance the budget to how should we balance the budget.
We actually have three plans for eliminating the deficit over the next decade. Before Bell tells you a little bit about them, I'm going to talk about how we see the budget outlook, why think getting to balance is important and what we mean by it.
First, the deficit outlook. The deficit for the current year is now expected to be, in Secretary Snow's words, in the range of $500 billion. That's about 4.4 percent of GDP. None of us is worried about the consequences for the economy of a large budget deficit this year. The economy is recovering, but labor markets are still very soft, and inflation is nonexistent.
ISABEL V. SAWHILL: Well, I hope Alice has convinced you that this is a very serious problem, and my job now is to talk about how we might deal with it. And as she's told you, we talk in this book about three different plans:
The first one we call the smaller government plan. It relies primarily on spending cuts to get to balance in 2014;
The second we call the larger government plan, and it relies almost exclusively on higher revenues to get to balance in the same year;
And the final we call the better government plan. It keeps government about the same size as it is now as a share of the economy, but it reallocates spending in ways that the authors of this book think would make a government more effective and, thus, a better government.
Read the full event transcript:
· Introduction and Panel 1 (PDF—31KB)
· Panel 2 with Q&A (PDF—101KB)
· Panel 3 with Q&A (PDF—78KB)