For Immediate Release: Wednesday, December 1. 2010
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

Proposal misdiagnoses the problem, fails to address current economic crisis

By John Irons, Research and Policy Director, Economic Policy Institute

Today, the co-chairs of the National Commission on Fiscal Responsibility and Reform presented a revised version of their plan, but also announced that a final vote would be delayed until later this week.

With the delay, it is becoming increasingly clear that the Bowles-Simpson plan will not receive the required 14 votes to send the report to the President and Congress.  The rejection of the proposal should not be seen as a failure to take deficit reduction seriously, but rather that the policy approach adopted by the co-chairs is flawed.

Most fundamentally, the report fails to fully acknowledge the current economic crisis. The report states that the reductions in annual appropriations would require “serious belt-tightening” beginning in just 10 months, despite the fact that the unemployment rate is expected to remain between 9% and 10% at that point. Despite paying lip-service to a payroll tax holiday, the plan includes no concrete, immediate action to create jobs or to spur economic growth in the near term. CLICK FOR FULL STATEMENT

John Irons will be available today from 1:00 – 3:00 PM at a press conference to respond to the Fiscal Commission. The press conference will be at the National Press Club, Holeman Lounge, 529 14th St. NW, Washington, DC and will also include Joseph Stiglitz, Dean Baker and others.