"Understanding Fiscal Responsibility" is a collaboration of
Two Plans to Address the Federal Budget Deficit
November 26, 2010
Over the past several weeks, two rival plans aiming to reduce the federal budget deficit have garnered a great deal of media attention. The first plan was the result of President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform. Chaired by former Clinton chief of staff Erskine Bowles (D) and former Wyoming senator Alan Simpson (R), the commission’s proposal seeks to save $3.8 trillion by the year 2020. As McKinnon, Boles, and Vaughn wrote in The Wall Street Journal, this savings would come about through cuts to “sacrosanct areas of U.S. tax and spending policy, such as Social Security benefits, middle-class tax breaks and defense spending.”
The second deficit reduction plan came in a report titled, “Restoring America’s Future,” from the Bipartisan Policy Center. Chaired by former senator Pete Domenici (R) of New Mexico and former White House and congressional budget director Alice Rivlin (D), this commission is even more aggressive as it seeks to save $5.9 trillion by the year 2020. Writing for USA Today, Richard Wolf noted, “The near-unanimous opposition [to the Domenici-Rivlin plan] from right and left was a further sign of how difficult it will be — economically and politically — to get the nation’s fiscal house in order amid $1.4 trillion annual deficits and a debt that will top $14 trillion early next year.”
Teachers should help students understand the similarities and differences between these two plans. While it is unlikely that either plan will be adopted in its entirety, these competing approaches to reducing the deficit will certainly shape the national debate concerning fiscal policy.
Students could create charts similar to image above, outlining the differences between the Bowles-Simpson plan and the Domenici-Rivlin plan. Going forward, students could keep track of news reports about each plan and discuss which plan gains the most traction in the national discussion. This will help students understand the process through which fiscal policy is made and help them participate in the discussion with informed opinions.
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