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When economic conditions permit, states should accumulate budget reserves adequate to maintain services during recessions.

Deficit-reduction efforts should avoid cuts in programs that serve low- and moderate-income populations.

The federal government must strive for long-term fiscal balance.

At the federal level, there are two categories of budgetary expenditures: entitlement and discretionary spending.

Efforts to reform entitlement spending should recognize the following factors:

AARP supports exempting Social Security’s administrative costs from limitations on discretionary appropriations in the federal budget.

Two government budget practices that can have significant implications for lower levels of government are block grants and unfunded mandates.

Higher levels of government should provide adequate resources when mandating functions to lower levels of government.

Efforts to balance the budget or address shortfalls should remain the purview of the legislative branch.

Policymakers should provide for transparency and honesty in the budget process.