The most important issue facing working families today is a jobs crisis of historic proportions and a demand deficit.  Long-term budget deficits are a problem that needs to be solved, but we do not have a short-term budget deficit problem.  And we should avoid taking hasty actions now that will end up actually worsening our long-term deficit.

According to data from the Congressional Budget Office, most of the deficit over the next ten years results from Bush's tax cuts for the rich, the wars in Afghanistan and Iraq, spiraling health care costs and the worst recession since the Great Depression.  The main driver of the recent increases in deficit projections is worsening economic conditions -- in short, the present deficit "crisis" is largely a symptom of the jobs crisis.

The best way to fix the deficit is to create 10 million jobs now -- the number of jobs needed to close our jobs deficit.  This will require large amounts of public investment in the short term, which should be paid for in future years by taxing Wall Street.  In addition to creating jobs for Main Street this tax will also curb short-term speculation and other Wall Street abuses that caused this recession. 

The problem with perennial proposals for entitlement commissions and deficit commissions is that they are too often premised on the mistaken assumption that short-term stimulus and entitlement spending are the root causes of burgeoning budget deficits. Social Security is fundamentally sound and does not contribute meaningfully to our long-term deficit.  If Social Security were a private pension plan, it would be considered healthy by any measure.  

Social Security can be brought into long-term actuarial balance with relatively modest adjustments and without cutting benefits.  With the decline of defined benefit pensions, the sudden loss of retirement savings for millions and the dramatic increase in economic uncertainty, strengthening Social Security's core guarantee of retiring with dignity is now more important than ever.

Problems with Medicare financing in the long term are a symptom of the larger problem of rising health care costs in the private and public sectors.  The solution to Medicare's financing problems is comprehensive health care reform, not benefit cuts.

In December, when the deficit commission completes its deliberations, Congress should not merely rubberstamp its recommendations.  Legislation of the magnitude likely to be proposed should be considered under the regular congressional process.  We are under no illusion that Congress always works perfectly, but lawmakers from both parties need to step up responsibly and make thoughtful and deliberate decisions on these issues.

Under no circumstances should deficit alarmists be allowed to circumvent the regular democratic process to advance their long- standing agenda of gutting Medicare and Social Security.

Commissions have been, and can be, serious and useful mechanisms to grapple with difficult problems.  But the true test of this commission's success will be whether it helps fix our budget deficits by attacking the jobs deficit, or whether it makes our budget problems worse by sacrificing jobs and urgently needed long-term public investment.

Contact:  Eddie Vale (202) 637-5018