Attention All Budget Summiteers: Whatever You Do, Don’t Make It Worse

The Center for Security Policy today called upon the participants in tomorrow’s initial meeting of the budget summit to avoid taking steps that would exacerbate the prospects for an economic recession and compound the hasty and potentially dangerous contraction of the Nation’s defense industrial base already underway.

In an analysis just released entitled The Only Sensible Outcome for the Budget Summit: Slip the Gramm-Rudman Targets, the Center argues against two of the most likely results of such a summit — agreements to increase taxes significantly and to make massive reductions in the "top line" for the defense budget.

Frank J. Gaffney, Jr, the Center’s director, said, "We believe that raising taxes or indulging in a defense budget-slashing binge, to say nothing of doing both, would have grave economic and strategic consequences. At a moment when the U.S. economy is clearly stagnating — if not moving toward recession — and the international environment is becoming ever more turbulent, these measures would be certain to make matters considerably worse for the national interest."

The Center’s analysis concludes that the only sensible approach for the summit participants to adopt would be to stretch out the targets established by law under the Gramm-Rudman-Hollings amendment. These targets mandate that the budget deficit be reduced to specific levels by certain dates. The Center strongly believes that such a shift can and should be designed so as to encourage continued progress toward a managed reduction in the federal deficit and not simply to relieve the pressure to balance the budget.

Gaffney added, "Continued economic growth is essential to redressing the current deficit problem; should it be forestalled by the imposition of new taxes or a further acceleration in the recession already affecting the U.S. defense industry, the net result is sure to be a still worse performance in the future against Gramm-Rudman’s arbitrary if symbolic targets."

Copies of The Only Sensible Outcome may be obtained by contacting the Center.