One of the biggest problems in getting Americans engaged on the nations fiscal challenges is that the problem is so hard for most people to get their arms around. The numbers are so huge, the issues so arcane and the problems so daunting that people may get angry about it, but have no idea how to grab onto it.

Thats what makes the approach of the Committee on the Fiscal Future of the United States interesting. Their Choosing the Nations Fiscal Future report, issued by the National Research Council and the National Academy of Public Administration (NAPA) today, is about how to control our national debt, already past $12 trillion and threatening to rise to staggering (and dangerous) proportions. Public Agenda is part of the Choosing Our Fiscal Future project with NAPA, working to build a network of citizens wholl get involved in the discussion and work on solutions.

The nonpartisan committee laid out a goal for a sustainable debt level (keeping it to 60 percent of gross domestic product), four alternative paths for reaching the goal, and six basic questions to ask about any federal budget. The committee argues that if the answers to these questions are yes, were at least making progress.

Here are the questions, taken directly from the report. Consider whether the federal budget meets them now – and more importantly, keep them in mind as new budgets are proposed.

1. Does the proposed budget include policy actions that start to reduce the
   deficit in the near future in order to reduce short-term borrowing and long-term interest costs?
2. Does the proposed budget put the government on a path to reduce the federal debt within a decade to a sustainable percentage of GDP? Given the fiscal outlook and the committee’s analysis of the many factors that affect economic outcomes, the committee believes that the lowest ratio that is economically manageable within a decade, as well as practical and politically feasible, is 60 percent.
3. Does the proposed budget align revenues and spending closely over the long term?
4. Does the proposed budget restrain health care cost growth and introduce changes now in the major entitlement programs and in other spending and tax policies that will have cumulative beneficial fiscal effects over time?
5. Does the budget include spending and revenue policies that are cost-effective and promote more efficient use of resources in both the public and private sectors?
6. Does the federal budget reflect a realistic assessment of the fiscal problems facing state and local governments?

This gives the public something they havent had before: a set of standards for a good budget, or at least as good as it can be given the tremendous fiscal challenges we face. If we give the public more tools to measure the problem, and grapple with real solutions, we can get ahead of this challenge – while theres still time.

To find out more, and to become part of the citizen network working on this issue, visit the Choosing Our Fiscal Future web site, become a Facebook fan, or follow us on Twitter @FiscalFuture.

Facing Up to the Nations Finances is back with a new Budget Blog Carnival! If you are unfamiliar, a blog carnival is an online magazine (blogo-zine) of sorts that focuses on a specific theme. This issue is all about the U.S. federal budget and the national debt.

As always, the carnival is comprised of a non-partisan collective of blog entries. While specific pieces may have ideological roots, the overall carnival is a testament to the diverse voices present in the ongoing debate that surrounds the budget, deficit and accumulated national debt.

Today, we are releasing an exciting array of entries from The Heritage Foundation, The Committee for a Responsible Budget, Econbrowser blog, ECONLOG blog and the Economists View blog, to name a few of the participants! Here is your guide to Facing Ups Dec. 2009 Budget Blog Carnival:

First and foremost, Scott Bittle, executive vice president of Public Agenda and co-author ofWhere Does the Money Go?, leads the pack with a piece entitled, The Three Questions for the Public on the Federal Budget. In the piece, Bittle highlights three key questions for the public (and American leaders) to consider: Can we afford it? Can we keep the status quo? and Am I willing to give up something I want because the government can’t afford it?According to Bittle,

Most of the people who’ve looked at this issue, whether they’re liberal or conservative, in or out of government, use the same word to describe the federal budget: “unsustainable.”

Next, economist Dr. Arnold Kling of the EconLog blog ponders various scenarios for resolving U.S. debt. From technological advances to hyperinflation, Kling provides valuable insight.

Conn Carroll of The Heritage Foundation penned a piece entitled, The Definition of Economic Insanity. In the entry, Carroll stands firmly against deficit spending as a means to stimulate the U.S. economy. In opposition to recent jobs summit proposals Carroll states,

These “new” ideas will fail for the same reason the past two government stimulus plans failed: governments do not create jobs.

In a separate piece, Carroll presents a series of government actions from the 1930s through modern times that he considers examples of the failure of government to spend its way to prosperity and makes his case for the government to step out of the way.

And Dan Perry penned an intriguing article about the urgency of the debt. Perry charges both parties with fiscal irresponsibility, as he finds fault in both President Obamas deficit spending and record-increases in spending during George W. Bushs presidency. While he sees the Tea Party movement as impressive, he writes the following:

After eight years of a Republican administration, the nation saw record spending and deficit levels without so much as a peep about the financial difficulties it might someday cause. Meanwhile, their solution to these economic woes are a series of tax cuts accompanied by no tangible reductions in spending.

Next, James Hamilton of the Econbrowser blog responds to Paul Krugman, one of the leading economists to argue that U.S. budget deficits are not that troubling in the current fiscal environment. Hamilton expresses his worries about current and future deficits. Please also read Krugmans writings on this subject here and here.

Also, heres another piece from Hamilton an assessment of federal budget commitments and the danger present in continuing on our current budgetary path.

Another exciting partner in the current Facing Up carnival is the bi-partisan Committee for a Responsible Federal Budget. The Committee submitted two pieces one about theessentials associated with tax reform and another that explores the true costs of health care reform. Both of these entries provide insight into the current debate over the national debt.

And, Mark Thoma from the Economists View blog highlights the three ways in which debt can make future generations worse off, while covering some of the bogus arguments that are given in the budget debate. Thoma concludes by calling some of the Republican opposition weve seen as unduly alarmist.

In a more-lighthearted commentary, Bob McCarty writes about the similarities he sees between the movie Friday the Thirteenth and the economic stimulus package.

Finally, in Musings on America’s Budgetary Challenge, David D. Kent provides a fun-filled look at federal expenditures and ponders the what ifs of potential spending scenarios.

Thats it for this edition of the blog carnival. Stay tuned for more!

Late Wednesday night, the Congressional Budget Office released its report on the proposed piece of legislation: the gross price tag for the coverage provisions is $848 billion. It would cut the deficit by $130 billion if fully enacted, according to CBO estimates. The main financing mechanisms would be cuts to Medicare, a new excise tax on high-valued Cadillac health insurance plans, a 1/2 percentage point increase in the Medicare tax rate for high-income earners, and various tax hikes imposed on the health care sector including fees on manufacturers and insurance companies.

Meanwhile, the CBO has released an update to its estimate of the House health care bill that passed two weeks ago. That House health care reform bills financing differs from the version outlined by Senate leadership. In addition to the House bill having a larger gross price tag (over $1 trillion), the House bill is financed largely via a surtax on high-income taxpayers, which the Senate bill does not include. Furthermore, the House bill has more cuts to Medicare than the Senate bill, although the Senate bill does cut more non-Medicare spending than the House bill.

For a pie chart comparison of how the two bills are financed, click here for the Senate bill and click here for the House bill. The table below also presents the data that is in the pie chart.

Note that all figures are from the most recent CBO scores of the two bills. Totals may not add up due to rounding.

More from the Tax Foundation

You wouldnt think the bottom line on the $1.6 trillion federal budget deficit and $11.9 trillion national debt crisis could be summed up in a single sentence, but when the right words whizzed by, the Wall Street Journals David Wessel was quick to point them out. Words to remember, in a speech by Douglas Elmendorf, director of the Congressional Budget Office: The country faces a fundamental disconnect between the services the people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.

These words underscore the fact that no matter how complicated and increasingly urgent this problem is, it is one which can be understood by most Americans – who can then consider, debate, and decide on options for the best way to reduce the deficit before its sheer weight makes many decisions for us.

Through PublicAgenda.org, FacingUp.org and our Students Face Up to the Nations Finances interactive curriculum for college students, weve been helping people understand the problem, why it matters, and how to get involved in the process of charting a path to fiscal health. This fall, we extended the reach of the Facing Up curriculum to include high school and middle school students, who have been using our learning materials as part of the University of Virginias Youth Leadership Initiative program.

Through that partnership, we also got a chance to hear more about how young people feel about the fiscal crisis which is shaping all of our futures. In a mock election held to give students a chance to speak out on a range of issues, 77 percent favored a balanced budget; an increase in the age for Social Security eligibility was supported by 64 percent; and increasing payroll taxes was favored by 53 percent. Reducing Social Security benefits was opposed by 69 percent.

Well be hearing a lot more about these issues beginning on Monday, when we start accepting entries for the Students Face Up to the Nations Finances contest for students, with $500 prizes for the best essays and best multimedia presentations on the federal budget deficit and national debt and what ought to be done about it. The contest has two divisions one for college students, and another for high school students – and all will have a chance to comment on and discuss each others ideas.

December 11 is the entry deadline; click here to see the full contest rules. Students Face Up to the Nations Finances, a nonpartisan curriculum available at FacingUp.org, is available to users free of charge thanks to a grant from the Peter G. Peterson Foundation.

You know youre in for a bout of grim reading when the international agency charged with worrying about how we power the planet starts off its fact sheet with a question like this: Why is our current energy pathway unsustainable?

Thats the message from the International Energy Agency, which issued its World Energy Outlook report, the organizations annual examination of the big picture. That picture itself hasnt changed all that much. The fundamental challenge is still to meet surging worldwide demand for energy while at the same time coming up with ways to avoid global warming and keep energy relatively affordable.

Basically, the IEA says everything depends on whether or not world leaders get serious about climate change, very soon.

If we do nothing, then worldwide energy demand is projected to soar by 40 percent by 2030. The vast majority of that increase is going to come in the developing world, as people in China, India and throughout Asia see their standard of living rise. Even keeping up with that demand would require investing another $26 trillion. And unless things change, most of that energy is going to come from fossil fuels, which means dire consequences for climate change and air pollution, the IEA said.

On the other hand, if world leaders committed to fighting climate change with cap-and-trade policies, increased energy efficiency, and greater use of renewable energy, that would cost another $10.5 trillion (on top of the $26 trillion). But energy demand growth could be cut in half, and greenhouse gases would decline.

Not that the prospects for this look particularly good right now. Most observers say hopes for a real deal out of next months Copenhagen climate conference are fading, one major reason being that the United States still hasnt figured out what it wants to do. Theres a chance the Obama administration will put something in place on its own even if Congress doesnt act, but in any case, its unlikely a deal with be struck without American leadership.

Chances are youve never heard of the IEA. While the agency has enormous influence among policymakers, and while there are bitter disputes over its estimates, it barely registers with the public. But despite the IEAs wonky tone and elite audience, the report has one great strength when it comes to getting the public involved: it focuses on choices and alternatives.

The world has decisions to make about energy. Everything weve learned about how people get engaged in making policy decisions shows that choices are essential. Nothings perfect, and there are always tradeoffs to everything. Setting those options out fairly to the public is critical to building public support for change.

The IEA actually lays out the cost of those alternatives for policymakers. We can only hope that policymakers will turn around and do the same for the public.

More from Public Agenda

It turns out that neither nuclear weapons nor terrorism may be the greatest threat to American prosperity and security. Instead, it may be something we hear very little about in the mainstream media: our burgeoning national debt. Runaway spending on entitlements, bailouts, and stimulus bills are driving the budget deficit upward. As an article in The Washington Times explains, massive government debt may be the force that ultimately overcomes the nation’s ability to be the “master of its own destiny.” Publicly-held debt now stands at $7 trillion, or about $22,000 per person. And it could double in the next ten years, leaving less and less for spending on defense.

In an interview with Politico, Sen. Jack Reed (D-RI) remarked that the defense budget is getting “sufficiently squeezed,” and he thought the solution may well be cutting back on big-ticket defense items or lengthening their development time. The article also cites a Center for Strategic and Budgetary Assessments analyst who believes there’s no room for the defense budget to grow; in fact, he warns, the interest on the debt may exceed the annual defense budget—for the first time in U.S. history—by fiscal year 2018. The government should focus its spending on those areas which are vital to our national security and slow the pace at which it is increasing the national debt. Let’s hope someone hears and heeds this shot across the bow.

Phillip Reboli currently is a member of the Young Leaders Program at the Heritage Foundation. His views do not necessarily reflect the views of the Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm