BOX 1-1

Committee Charge

An ad hoc committee will conduct the following tasks and prepare a report.

  1. Produce several baseline projections of the federal budget, deficit, and debt, based on existing information and on an analysis of the nature and extent of the nation’s fiscal and economic conditions. The projections will be based in part, on data from sources such as the Social Security Actuaries, the Congressional Budget Office, and the U.S. Office of Management and Budget.

  2. Produce a fiscal framework and set of guiding principles for the development of policy scenarios and estimates of the effects of selected budget options. The framework could include the target date by which the federal budget would achieve balance and the desired path to close the fiscal gap, which is the amount of spending reductions or tax increases needed to keep debt as a share of gross domestic product at or below today’s ratio.

  3. Identify values, preferences, and concerns that prior research has shown are shared by segments of the American public and use this information to assist in the development of several budget scenarios that are designed to reduce federal deficits or federal debt. The prior research should also take account of alternative views of the roles of individuals and employers in restoring the country’s long-term fiscal health.

  4. Develop several budget scenarios that will demonstrate various ways to address the fiscal challenge facing the national economy over the next several decades. The scenarios will deal with both the income and expenditure sides of the federal budget. The scenarios will be crafted to take into account information on values, preferences, and concerns of the American public and differing views of the roles of individuals and employers.

  5. Identify and evaluate options to improve fiscal transparency and discipline in the federal budget development process.

  6. Develop a report that will summarize the methodology and evidentiary base for the projections and provide an explanation of how different values and attitudes have been reflected in the policy scenarios. The report will not recommend a single solution to the structural deficit problem. Its conclusions will be limited largely to providing a framework for understanding the deficit issue and a rigorous methodology for analyzing different policy scenarios.

THE BUDGET OUTLOOK

Largely because of the severe downturn in the economy that began in 2008, the federal government borrowed $1.4 trillion in fiscal 2009 to pay for current spending, and it is expected to run an annual deficit in excess of $1 trillion for at least 1 more year. After the unprecedented deficits of 2009 and 2010, the economy’s recovery will reduce the annual deficit, although



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