Tags: Budget | Fiscal | Crisis

Budget Expert MacGuineas: 'Fiscal Crisis Breathing Down Our Neck'

Tuesday, 14 Feb 2012 07:40 AM

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President Barack Obama's $3.8 trillion budget for 2013 fails to tackle debt burdens crushing the U.S. economy and needs to go back to the drawing board to address entitlement reform, says Maya MacGuineas, president of the Committee for a Responsible Budget.

The budget calls for tax hikes on wealthier Americans but further entitlement reforms will be needed in order to narrow gaping deficits that have punished the economy.

"In order to fix our debt and deficit problems, we are going to have to deal with every part of the budget," MacGuineas tells The Daily Ticker, a Yahoo blog.
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"This budget doesn't do enough to reform our healthcare and our social security programs. We have a fiscal crisis breathing down our neck."

Adding to the problem is the fact that 2012 is an election year, when politicians tend to punt when facing politically tough issues.

"The real action when it comes to budgeting is what goes on in Congress," MacGuineas says.

"Congress needs to hammer out some compromises." Doing nothing would "dig this deficit hole even deeper."

White House officials have recognized the need to narrow the country's deficits, which prompted the Standard & Poor's credit ratings agency to downgrade the U.S. in 2011.

However, spending cuts are not deficit-reducing tool of choice.

"The time for austerity is not today," White House Chief of Staff Jack Lew tells NBC News.

"If we were to put in austerity measures right now, it would take the economy in the wrong way."

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