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Wednesday, October 31, 2007
Responsible Fiscal Action: AARP's Perspective
We commend for your consideration the testimony presented at today's Senate Budget Committee hearing on S. 2063, the Bipartisan Task Force for Responsible Fiscal Action Act of 2007, by William Novelli, CEO of AARP.
The testimony is a succinct yet comprehensive look at long-term fiscal responsibility and entitlement programs, focusing not only at demographics, health care costs, and retirement assets, but at revenue issues well beyond the scope of standard senior issues, including the fiscal problems posed by tax expenditures, which cost about a $1 trillion a year but are often overlooked in fiscal policy debates.
Here's a teaser:
The federal revenue base has eroded over the past seven years. Federal revenues dropped by nearly 5 percent of GDP in only four years (between 2000 and 2004) and spending increased by 1.5 percent of GDP 4 sending the budget from a surplus of 2.4 percent of GDP in 2000 to a deficit of 3.6 percent of GDP in 2004. Although revenues recovered somewhat in 2005 and in 2006, they are still well below their peak of 2000, and below levels needed to finance our increasing domestic and global commitments. The tax code contains a multitude of tax provisions that automatically convey benefits, similar to spending entitlements, but they have very different distributional effects...
Posted by Dana Chasin
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