The report concludes that policymakers need to find an additional $2.4 trillion in savings to put the debt on “a clear downward path.” A similar report released Monday by the Democratic group Third Way calls for additional savings of roughly $2 trillion.
A third report, by the left-leaning Center on Budget and Policy Priorities, on Monday backed the White House target of $1.5 trillion as “the minimum appropriate budget policy.” Though it would not “permanently solve our fiscal problems, it would still represent an important accomplishment,” the report says.
(The Washington Post/Source: Congressional Budget Office) - Projected U.S. budget deficits.
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However, the center’s analysts concluded that “a somewhat larger amount of deficit reduction would be desirable, if it can be secured through sound, balanced policies that don’t impede the economic recovery . . . don’t increase poverty and inequality (which are already larger in the United States than in most of the Western world), and don’t sacrifice health care quality or access or raise overall U.S. health care costs.”
That is a direct shot at House Republicans, who have set their sites on finding roughly $4 trillion in savings on top of the sequester, which is what the CBO says is needed to wipe out deficits entirely by 2023.
That is a whopping figure, and House Republicans have pledged to do it without raising taxes, cutting military spending or reducing current benefits for the elderly. That does not leave them much to cut. But if they can do it, it would bring the debt ratio down dramatically by 2023, to less than 60 percent of GDP, according to CBO estimates.
Administration officials say that the president is willing to consider more than $1.5 trillion in additional savings and that his most recent offer to House leaders, worth around $1.8 trillion, remains on the table. That proposal includes changes to Social Security and federal health programs that would produce even bigger savings after 2023.
However, Obama is insisting that any new package include new revenue. It does not have to be 50/50, Furman told reporters; he suggested a ratio of $900 billion in spending cuts to $600 billion in tax hikes.
But with Republicans opposed to more tax increases, the parties are facing the same old stalemate for the third year in a row.