Highest Ranking Economic Officials From Both Parties Foresee Another U.S. Economic Crisis Within 10 Years Unless U.S. Takes Immediate Action On Structural Deficit

May 14, 2010


Panelists gather at the 2010 Fiscal Summit, hosted by the Peter G. Peterson Foundation.

Peter G. Peterson Foundation Survey of Economic Leaders from Past Eight Administrations and Congress Shows Bipartisan Agreement that U.S. Needs to Cut Spending and Raise Taxes to Avoid an Economic Crisis

NEW YORK, NY - An unprecedented survey of the most senior economic officials from the last eight administrations and Congressional leaders from the past 30 years shows broad agreement that failure to address the country's long-term structural deficit challenges would lead to another economic crisis within the next ten years. There is also consensus around the solution to the deficit problem: it must include both spending cuts and tax increases, according to a group of more than fifty former top economic officials.

The survey respondents polled were former senior officials from the past eight administrations under Presidents George W. Bush, Bill Clinton, George H.W. Bush, Ronald Reagan, Jimmy Carter, Gerald Ford, Richard Nixon, and Lyndon Johnson, as well as members of Congress, with significant experience on fiscal issues, including:

  • Secretaries of the Treasury
  • Federal Reserve Presidents and members of the Board of Governors
  • Directors of the Office of Management & Budget
  • Council of Economic Advisors Chairs
  • Directors of the Congressional Budget Office
  • Senate Budget Committee Chairmen/Ranking Members
  • House Budget Committee Chairmen/Ranking Members
  • House Ways and Means Committee Chairmen/Ranking Members

The survey was commissioned by the Peter G. Peterson Foundation (PGPF) as part of its mission to increase public awareness of the nature and urgency of the country's key fiscal challenges and was released in the days leading up to the first meeting of President Obama's National Commission on Fiscal Responsibility and Reform as well as the Foundation's "2010 Fiscal Summit: America's Crisis and A Way Forward." The survey was conducted by Global Strategy Group, a public opinion research firm.

"It is significant to see such an overwhelming proportion of these former senior officials, Republicans and Democrats alike, agree that we must address our long-term structural deficits to avoid another economic crisis, and that we must do so now," said Peter G. Peterson, founder and Chairman of PGPF. "Addressing our fiscal challenges will require being open-minded about solutions and taking a comprehensive approach in which all options are seriously considered. By acting now, we can meet these challenges in a way that secures the vital programs on which so many Americans rely, and ensures that resources will still be available for investments for future growth in areas like education, research and critical infrastructure."

"The opinions of these federal government experts clearly demonstrate that there is a bipartisan consensus that spending cuts and tax increases are both necessary to address our unsustainable structural deficits," said David Walker, President & CEO of PGPF. "Given increasing concerns among Americans, and with this bipartisan consensus of experts in mind, it is time to set aside partisan battles and bridge ideological divides to focus on sensible solutions."

The survey found that top former economic officials believe:

  • We need to change course. Democrats and Republicans unanimously feel that the federal government is currently on an unsustainable long term fiscal path. (100% Dems and Reps strongly agree)
  • Systemic issues must be addressed. Democrats and Republicans unanimously consider long term structural deficits more threatening to the country's economic future than short term deficits.(100% of Dems and 93% Reps say long term structural deficits are much more threatening; 7% of Reps say they are somewhat more threatening)
  • Inaction will lead to crisis. More than 9 in 10 Republicans (98%) and Democrats (94%) believe if we do not act soon to address the nation's long term fiscal situation we are heading for another major economic crisis.
    • Most Republicans (88%) and Democrats (75%) expect an economic crisis within the next ten years if we do not act.
    • And practically nine in ten Republicans (92%) and Democrats (82%) believe the government should begin to take action within the next 1-2 years to address the long term fiscal situation.
  • Elements of a crisis. Majorities of Democrats and Republicans believe that without measures to address the longer term structural deficit challenges it is very likely we will encounter:
    • Rapid growth in federal mandatory spending crowding out other important public investments (80% Reps very likely/71% Dems)
    • Significant rise in interest rates (71% Reps very likely/65% Dems)
    • An eventual decline in Americans' standard of living (65% Reps very likely/53% Dems)
  • Tax increases and spending cuts must be part of the solution. Two-thirds of Republicans (68%) and more than eight in ten (88%) Democrats believe that solving the country's long terms structural deficits will include both spending cuts and tax increases.
  • Democrats and Republicans share an open-minded approach.
    • Practically all Democrats believe entitlement reform (100%), overall spending cuts (100%) and significant decreases in discretionary spending (94%) should be seriously considered.
    • 72% of Republicans believe tax increases should be seriously considered in addition to 56% who believe significant decreases in defense spending should be seriously considered.

Methodological Note: Global Strategy Group conducted a survey among top economic leaders from the last eight administrations and Congress between April 5 and April 26, 2010. Individuals who are currently serving in public office were not solicited for participation in accordance with the research design. For the purposes of analysis, respondents are assigned a party identification based on their personal affiliation (if an elected official) or by the administration that appointed them.

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