The Moment of Truth

For the past nine months, the Presidentially-created bipartisan “National Commission on Fiscal Responsibility and Reform” has been working to develop specific recommendations to address the national deficit.  Released on December 1, 2010, “The Moment of Truth” is a simply written document outlining specific recommendations to address the country’s deficit financial condition.
Highlights within the report that may impact infrastructure-related funding include the following:

  • Cap Discretionary Spending through 2020.  Spending in 2012 would be held equal to or lower than spending in 2011, and return spending would be held to pre-crisis 2008 levels in real terms in 2013.  Future spending growth would be limited to half the projected inflation rate through 2020.  Over the next 18 months, agencies would undertake a thorough review of their budgets.  Congress will also need to critically review all funded programs and make tough decisions to set priorities and reform or eliminate a number of them.
  • Establish a Disaster Fund to Budget Honestly for Catastrophes.  Rather than relying on emergency supplemental funding requests to fund disaster recovery, a rolling average of the most recent 10 years (excluding the highest and lowest year) would be utilized to create a disaster fund budget authority.  To increase transparency, an online searchable database of all disaster spending would be created.
  • Stop the Abuse of Emergency Spending.  Often, the emergency designation is seen as a loophole to escape fiscal restraints.  The Commission proposes Congress should designate each emergency provision individually and discontinue the practice of global designations.
  • Unleash Agencies to Begin Identifying Savings.  All agency heads would be required to identify a share of their budget recommended for cancellation and identify ways to shift from inefficient, unproductive spending to productive, results-based investment.
  • Establish a Cut-and-Invest Committee to Cut Low-Priority Spending, Increase High-Priority Investment, and Consolidate Duplicative Federal Programs.  A new, bipartisan “Cut-and-Invest Committee” would be created to identify two percent of the discretionary budget that should be cut and identify how to redirect half of that savings into high-value investments.  Over the next decade, the Cut-and-Invest Committee will be expected to recommend more than $200 billion in discretionary cuts, freeing up $100 billion for high-priority investments.  Leveraging private capital through an infrastructure bank could be a possible outcome of this Committee.
  • Reduce Congressional and White House budgets by 15 percent. 
  • Freeze Pay for Three Years on Federal Workers and Defense Department Civilians.
  • Sell Excess Federal Real Property.
  • Eliminate All Congressional Earmarks.

The Commission is still seeking adequate votes (14 of the 18 Commission Members) to actually bring the report to the floor of Congress for consideration.