Isabel V. Sawhill is a senior fellow in Economic Studies at the Brookings Institution. She serves as director of the Budgeting for National Priorities project and co-director of the Center on Children and Families. She holds the Cabot Family Chair. She served as Vice President and Director of the Economic Studies program from 2003 to 2006. Prior to joining Brookings, Sawhill was a senior fellow at The Urban Institute. She also served as an associate director at the Office of Management and Budget from 1993 to 1995, where her responsibilities included all of the human resource programs of the federal government, accounting for one third of the federal budget.
In addition, she has authored or edited numerous books and articles including Restoring Fiscal Sanity 2005: Meeting the Long-Run Challenge and Restoring Fiscal Sanity: How to Balance the Budget, both with Alice Rivlin; One Percent for the Kids: New Policies, Brighter Futures for America's Children; Welfare Reform and Beyond: The Future of the Safety Net; Updating America's Social Contract: Economic Growth and Opportunity in the New Century; Getting Ahead: Economic and Social Mobility in America; and Challenge to Leadership: Economic and Social Issues for the Next Decade. Her research has spanned a wide array of economic and social issues, including fiscal policy, economic growth, poverty and inequality, welfare reform, the well-being of children, and changes in the family.
Sawhill helped to found, and now serves as President of the board of, The National Campaign to Prevent Teen Pregnancy, a nonprofit organization devoted to reducing teen pregnancy in the United States. She has been a Visiting Professor at Georgetown Law School, Director of the National Commission for Employment Policy, and President of the Association for Public Policy Analysis and Management. She also serves on a number of boards. She attended Wellesley College and received her Ph.D. from New York University in 1968.
Target the Health Exclusion I think the spirit of Len Burman’s argument in his Washington Post oped on tax expenditures is exactly right. Tax expenditures are just a form of back door spending. Although they may be used to favor certain types of spending, they also distort decision-making and lose a ton of revenue – over $1 trillion a year. They also tend to provide the biggest benefits to those in the highest brackets, tilting the tax structure in favor of the most affluent. Yet the public is only dimly aware of these key facts. Given the current political impasse… Read more
The Administration will likely propose to reduce the deficit to 3% of GDP by 2016 in its next budget. This goal is a far cry from the older norm of trying to balance the budget and shows how serioulsly out of balance the budget is and how much we have had to compromise our fiscal goals as a result. Can the Administration achieve even this limited goal? I think not. They may find a way to achieve it on paper but if the economy remains as depressed as most economists believe it will over the next 5 years, the big changes in spending or revenues that would be… Read more
I applaud the 10 Senators who are calling for a bipartisan commission on the budget. Too bad there are no Republicans in the group so far but perhaps that will change. And too bad some other Democrats, such as Pelosi, are also opposed. In both cases, they are ducking their responsibilities unless they come up with specific proposals to reduce long-term projected deficits – which is not happening and is not likely to happen any time soon. In the meantime, we are courting all kinds of trouble from slower growth, to an economic crisis, along with reduced flexibility to… Read more
Krugman is right that economics is now more about the elegance or beauty of ideas and their mathematical exposition than about shedding light on real world problems. As he notes, even the pragmatists among us (“the saltwater economists”) have not found a way to reconcile Keynesian theories with our continuing belief in the ability of individual markets to equilibrate supply and demand. Behavioral economics has helped to wean a new generation of economists from the earlier fixation on perfect rationality along with full and unbiased information, equally available to both buyer and seller in a market, but the microeconomic foundations… Read more
I doubt that the deficit will be a serious drag on the recovery. The Treasury hasn’t had much difficulty selling its debt so far and interest rates remain at reasonable levels. In addition, even if the economy starts moving in the right direction, it will likely remain depressed for several years, limiting the demand for credit from the private sector. And if the recovery is short-lived or falters, then another stimulus could be needed and should not be held hostage to concerns about short-term deficits. That said, it’s important to get a handle on the long-term fiscal situation since it… Read more
Americans need to save more so that we can finance investments in the economy instead of borrowing the money from other countries (thereby necessitating that we earmark some of our incomes to pay them back with interest later). Granted this increase in saving will slow the recovery but it does not necessarily undermine the effectiveness of the stimulus bill. Without the stimulus bill things would simply be worse. It’s true that there’s a theory that says that consumers save more when the government stimulates the economy because they believe their taxes will go up as a result of the stimulus… Read more
Given the growing inequality of incomes, especially at the very top of the distribution, asking this group to pay higher taxes seems like the right thing to do. And I have never been persuaded that people at the top of the distribution are going to work or save less just because their taxes have gone up from present levels. Back in the 1950s and 1960s, income tax rates were far higher and this doesn’t seem to have adversely affected the rate of economic growth. Similarly, the increase in top tax rates during Clinton’s first term was accompanied by vigorous economic… Read more
There is no way to ever definitively establish how many jobs will be (or have been) created or saved by the stimulus plan. The reason is because we will never know what might have happened without the stimulus. As Greg Mankiw notes in his blog, recent unemployment rates have been more in line with what the Administration predicted in their baseline economic projection in January without the stimulus, leading to the impression that the stimulus has done virtually no good at all. But in my view, this would be the wrong conclusion. The Administration has correctly focused instead on the… Read more
The most precious asset any President has is trust. So far, he has said all the right things about the need to balance short-run stimulus with long-term restraint. But this approach hasn’t been embedded in the stimulus package and Alan Auerbach’s argument calling for an elimination of any permanent measures from the package is exactly right, in my view. Since that doesn’t seem to be in the cards, all eyes are on the next shoe to drop – the President’s first budget. A group of a dozen experts, including three former heads of CBO, recently called for the President to… Read more
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