News Release

What Should Be Done With the Budget Surplus?


WASHINGTON — For the first time in decades, government officials and policy wonks in the nation’s capital are talking about what to do with a federal budget surplus. The Congressional Budget Office predicts a surplus of between $43 billion and $63 billion this year.

While many in Washington are pushing for tax cuts, some policy analysts far from the centers of power are urging different approaches. Among those available for interviews are:

A member of the editorial board of Dollars and Sense magazine, Frank said: “The surplus should be returned to the public in the form of services which we badly need. We could start by investing in education for our children, something that would go a long way to making sure the elderly are provided for in the future. For the past 15 years or so, Americans have been told that there’s no money to provide basic government services. Now we have the money, so let’s provide them.”

An associate professor of economics at the University of Notre Dame, Ghilarducci commented: “If the federal budget were divided between capital and consumption accounts like businesses do, we would have shown an ongoing surplus during much of the 1990s. Nevertheless, whether to spend it or give it back to individuals in the form of tax reductions is a real issue. We as a nation have urgent needs to provide income security and to improve education.”

Research director at the Midwest Center for Labor Research, Ginsburg said: “One of the consequences of the current economic growth is the increasing income inequality. This is most starkly seen in urban areas where years of disinvestment have created extremes of poverty which may be separated from affluence by only a street. The budget surplus offers an opportunity to begin rebuilding our urban centers. Investing in mass transit and trains, in schools and housing, will provide a foundation for other development. We also need to invest in living wage jobs in industries that are still in the cities or that can benefit from the city’s advantages of skilled labor, transportation and markets. These kinds of investments will produce long-term benefits.”

McIntyre, director of Citizens for Tax Justice, said: “We might finally start paying down the huge national debt built up in the Reagan and Bush administrations. The heck with that, say Gingrich and his compatriots. Instead, they insist we need more big tax cuts for the wealthy.”

For more information, contact Theresa Caldwell or Sam Husseini at the Institute for Public Accuracy, (202) 347-0020.