The Concord Coalition is heartened by the vast improvement in the federal government's short-term fiscal position over the last several years. In such good times it is tempting to conclude that there is no further need for fiscal responsibility. This temptation must be strongly resisted. Recent experience has demonstrated how volatile budget projections can be. Congress and the President must be careful not to over-commit surplus dollars that may or may not materialize.
Debt reduction is a perfectly sound use of the surplus.
Debt reduction will enhance net national savings, thereby freeing up resources for investments in productivity that will lead to stronger economic growth in the future. A larger economy will, in turn, help ease the burden on today's preschoolers who will find it a struggle, when they become working age taxpayers, to finance the retirement and health care costs of a dramatically older population. The Social Security surplus constitutes 74 percent of the total surplus over the next 5 years. Concord fully supports the bipartisan consensus that has developed around the commitment to reserve 100 percent of the Social Security surplus for either debt reduction or Social Security reform. Dedicating all, or nearly all, of the projected non-Social Security surplus to tax cuts or new spending puts this commitment at risk.