Robert Greenstein, an analyst and founder of the Center on Budget and Policy Priorities, spoke Wednesday evening in an Economics 1 Lecture. Greenstein’s presentation, ‘The Dramatic Fiscal Policy Challenges Facing the New Congress and the Nation: Tough Decisions Lie Ahead That May Affect Who We Are as a Society for Years to Come,’ looked at the current budgetary situation in the United States and the future effects that situation might cause.
Greenstein opened the presentation by providing some statistical facts, such as: if the fiscal situation remains as it is currently, Americans can expect the deficit to be 25% of the GDP by 2050. The audience was able to find humor in the graphs and charts that all painted a grim picture of the economic future for the United States if nothing is done.
The second part of Greenstein’s presentation discussed the particular challenges that the incoming Democratic Congress are going to face. Democrats will have to decide how to fulfill their campaign promise to re-institute ‘pay as you go’, which will force them to cut spending or not pass the rest of President BushÃƒâ€¢s tax cuts. Politics will figure prominently into these problems, with Greenstein saying that President Bush will submit a budget with impossible cuts in domestic spending that are impossible to make, which will make any budget Congress passes under the Democrats look fiscally promiscuous.
The main problem compounding the already poor fiscal situation, Greenstein stressed, is that health care costs are rising steadily. This means that the government will be forced to determine how to continue to provide healthcare for the poor and elderly while at the same time attempting to manage the fiscal situation responsibly.
Greenstein concluded by offering two different ways the government could respond to these fiscal problems. The Ãƒ’unbalancedÃƒ“ approach, as he characterized it, would be to cut programs on the poor, while the Ãƒ’balancedÃƒ“ approach would be to put all parts of the budgetÃƒ‘ cutting programs and raising taxesÃƒ‘on the table for debate. Ãƒ’We will pay an economic price for waiting too long to take action,Ãƒ“ Greenstein said at the end. We will be forced to confront our fiscal problems, whether we want to or not, and they will raise fundamental social justice questions for the next generation.