There is an important legislative reason why the projected budget will return to surplus in the future. The Republicans have only a very small majority in the Senate, where the filibuster rule requires a three-fifths majority to pass most legislation, giving the Democrats the ability to block the Republican tax agenda. But an exception allows tax and spending bills to be passed with a simple majority if the resulting budget returns to surplus after ten years. By designing the tax and spending rules accordingly and phasing in future revenue increases, the Republicans can achieve the needed long-term surpluses.
As a result, I am optimistic that a tax reform serving to increase capital formation and growth will be enacted, and that any resulting increase in the budget deficit will be only temporary.
Martin Feldstein, professor of economics at Harvard University and president emeritus of the National Bureau of Economic Research, chaired President Ronald Reagan’s Council of Economic Advisers from 1982 to 1984. In 2006, he was appointed to President Bush's Foreign Intelligence Advisory Board, and, in 2009, was appointed to President Obama's Economic Recovery Advisory Board. Currently, he is on the board of directors of the Council on Foreign Relations, the Trilateral Commission, and the Group of 30, a non-profit, international body that seeks greater understanding of global economic issues.