In 1994, less than two years after the founding of The Concord Coalition, President Bill Clinton appointed then-senators Bob Kerrey (D-NE) and Jack Danforth (R-MO) to lead the Bipartisan Commission on Entitlement and Tax Reform. The two senators — now Concord co-chairs — and their commission produced a report in which 30 of the 32 members agreed that “current trends are not sustainable.”
While much has changed in the past 25 years, this fundamental reality has not: Federal budget policy remains on an unsustainable track, driven by structural forces that increase federal spending faster than revenues.
It is true that for a while, things were headed in the right direction. Deficits steadily declined in the mid-1990s and budget surpluses emerged in 1998. However, this favorable trend ended in 2002 when a combination of tax cuts, military spending and a mild recession plunged the budget into deficits again.
Policy decisions and a much deeper recession that began in 2008 led to even worse deficits. At the height of that recession in 2009, the federal government ran its first annual deficit greater than a trillion dollars.