Saving Entitlements without Increasing Taxation

August 21 - R. Glenn Hubbard, former Chairman of the Council of Economic Advisors under President Bush, wrote an op-ed in the Wall Street Journal arguing that, if Senator Obama's fiscal plans are implemented, the U.S. budget will closely resemble European budgets which are lack budgetary flexibility due to their large entitlement and welfare programs. Hubbard claims that, because Obama has ruled out cutting benefits, payroll or income tax hikes will be necessary to pay for entitlement programs. Hubbard contends that:

"Balancing the federal budget without a tax increase is possible, but will require strong fiscal restraint... Three actions are essential: (1) reduce entitlement spending growth through some form of means testing; (2) eliminate all nonessential spending in the rest of the budget; and (3) adopt policies that promote economic growth."