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NEW YORK — Michael A. Peterson, President and CEO of the Peter G. Peterson Foundation, commented today on public reports of the proposed Senate tax reform legislation, which would add $1.5 trillion in deficits over the next ten years, plus interest:
“This bill passes the buck to the next generation. Like the House bill, the Senate proposal includes reforms that are neither permanent nor paid for, both of which impede the objective of growing the economy.
“Budget gimmicks like arbitrary phase-ins and expirations prevent families and businesses from being able to plan and invest, which defeats the purpose of pro-growth reforms. Fiscally irresponsible reforms are counter-productive, because adding more to our national debt hurts the economy.
“Since tax reform in 1986, our national debt has ballooned from $2 trillion to $20 trillion, and has more than doubled as a share of the economy. Our deficit outlook is also much worse, with $10 trillion of projected deficits over the next ten years. On our current path, we will spend $6 trillion on interest alone over the next decade, and interest will become the third largest federal ‘program.’
“Voluntarily adding another $1.5 trillion to our national debt is going in the wrong direction.
“This is a generational opportunity to enact tax reform to both improve our fiscal outlook and enable sustained economic growth. To do so, reforms must foster simplicity, fairness and growth, while also being fiscally responsible. The current proposals contain important elements of tax reform, such as eliminating or reducing the number of tax expenditures, but they need to go further. With $15 trillion of loopholes in the code over ten years, they only need to eliminate another 10% to pay for the cost of this legislation.
“Many lawmakers have long spoken of the need for fiscal responsibility and economic growth, and they now have a rare but very valuable chance to follow through on both counts.”