The 2011 Fiscal Summit: Solutions for America’s Future

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May 28, 2011

Last week, the Peter G. Peterson Foundation hosted a fiscal summit featuring discussions with President Bill Clinton, Democratic and Republican leaders, and fiscal policy experts.  The summit showcased the proposals of six leading policy groups to address long-term national debt and deficits.

From PGPF.org:

These proposals were developed through the Foundation’s Solutions Initiative, an effort to build consensus around ways to improve our nation’s fiscal outlook. With leaders from across the political spectrum discussing concrete budget plans, the Summit marked a turning point in the movement to find bipartisan fiscal solutions that help preserve the American Dream for future generations.

The six proposals represent organizations that span the political and generational spectrum.  The organizations and plans are as follows (from The 2011 Fiscal Summit: The Solutions Initiative):

Our proposals are intended to limit the national debt to 60 percent of annual GDP in 2035.  Ambitious cuts in federal spending are required to achieve that goal while minimizing tax burdens on the American people and the drag that high marginal tax rates impose on long-run economic growth.

This proposal attacks our debt problem from all sides and, by 2021, reduces and stabilizes the federal debt below 60 percent of GDP. Further, this plan will balance the budget in 2023. To succeed, federal spending is reduced from projected levels of 24 percent of GDP to 21.6 percent by 2021, with revenues at 21.5 percent.

The first stage hits an interim budget target of “primary balance” in 2015, with revenues equal to spending except for interest payments on the debt.  Our path to primary balance gets the nation out of the deficit danger zone in a timely way without choking off economic recovery… In 2017 and beyond, our plan puts in place the much more aggressive deficit reduction measures… and by 2030, our plan results in a fully balanced budget.

[Our plan] stabilizes debt as a share of the economy without demanding draconian cuts to national investments or vital economic security programs… Our path achieves primary budget balance by 2017, and improves the course of public debt in the long term.

[Our plan] balances the federal budget in 10 years and keeps it balanced forever at no more than 18.5 percent of GDP… Reduces debt to 30 percent of GDP within 25 years and puts it on track to continue falling thereafter…

When all is said and done, the “Budget for the Millennial America” stabilizes the national debt in 2015. If we adopt this plan, we will build the America our generation envisions, while bringing the national debt down to 64 percent of GDP by 2035.

Teachers could use these plans to inform a classroom debate about how best to approach the federal budget deficit and national debt.  Students could be broken up into six teams of four students each, which each team assigned to a different proposal.  Two students on each team could be assigned the role of “Spending Expert,” with the other two students taking the role of “Revenue Expert.”  Together, each pair of experts will create a short (2-3 minute) presentation about how their plan addresses spending or revenue.  They will then work with their teammates to craft an introduction and conclusion, and present their work to the class (6-8 minutes total, per team).

After the presentations, the teacher could lead the students in a roundtable discussion about the benefits and drawbacks of each plan.  At this point, students could express their own opinions about which plan (or combination of plans) they feel is the best approach to the federal budget deficit and national debt.  In the class periods that follow, students could compare these plans to those released by President Obama, Representative Paul Ryan, and others.  Students could conclude this activity by writing a detailed letter to their congressional representatives, outlining their opinion about how best to tackle the nation’s fiscal issues.

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