Staff Rick May. Now a lobbyist with Davidson and Co. in Washington, May says members of Congress are very uncertain how to proceed, and that makes the outcome of the budget debate much harder to predict. Spend more on just one program or area. Pay down the national debt. A sixth option do nothing with the surplus until we figure out what is needed to fix Social Security is also discussed from time to time. The main economic issue is whether a bigger surplus is always better.
Economists have wildly divergent views on the subject.
Many believe the best policy in the current economic environment in Washington is to pay off publicly held debt faster, especially if that leads to lower interest rates. Considerable debate also has emerged over whether changes in fiscal policy, such as higher or lower surpluses, should be used to fine-tune the economy when the Federal Reserve can alter interest rates more easily and with a faster impact. The bottom line is no one is quite sure where the debate should end up. Everyone always knew that the final budget deal had to show the deficit being lower, May says. That eliminated a number of options and gave us the ability to tell some people and groups that they could not have what they wanted.