In search of a debt deal

The nation faces default Aug. 2 unless Congress acts to raise the legal limit on government borrowing, and Republicans and Democrats alike are demanding that any increase in the $14.3 trillion debt limit be accompanied by a significant debt-reduction plan. The ultimate deal will draw in part on blueprints put forward by President Obama and the GOP House earlier this year, as well as proposals that came out of the president's bipartisan fiscal commission.

Jump to analysis of:   Debt  |  Breakdown by category  

Now showing:

Deficit

All of the plans would require the United States to borrow trillions of dollars more during the next decade, albeit less than what would be needed to fund current policies.

Deficits, in billions (hover on the lines for details)

deficit

Obama's "framework for deficit reduction," issued in April, would reduce the deficit against the current baseline, but still require another $7 trillion in borrowing during the next decade.

The deficit would shrink the most under the House GOP plan and the recommendations offered in December by the fiscal commission.



Now showing:

Debt

The debt is the accumulation of annual deficits. As a percentage of the economy, it is larger than at any time in U.S. history except for the period shortly after World War II.

Debt projections as a percentage of GDP (hover on the lines for details)

Under both of Obama's plans, the national debt would continue rising as a percent of gross domestic product.

While the total debt would keep growing under the House and fiscal commission plans, the rate of borrowing would slow and the debt would slowly begin to diminish as a percent of GDP.


Breakdown by category

Select a category to see how the different plans would affect spending and revenue over the next 10 years:

  • Security (discretionary)
  • Non-security discretionary
  • Social Security
  • Health care
  • Other mandatory
  • Net interest
  • Revenues

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Holds growth below the level of inflation.

96%

Obama's budget

Holds growth to near inflation.

96%

House budget

Holds growth to near inflation.

96%

Fiscal commission

Freezes spending in 2012 and returns to real 2008 levels in 2013.

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Holds spending to real 2008 levels.

96%

Obama's budget

Freezes spending through 2015.

96%

House budget

Reduces spending to nominal 2006 levels in 2012.

96%

Fiscal commission

Freezes spending in 2012 and returns to real 2008 levels in 2013.

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Makes no changes but calls for restoring solvency without privatization, slashing benefits or reducing base benefit of current reitirees.

96%

Obama's budget

Same as Obama's framework.

96%

House budget

Makes no changes but requires the president and Congress to put forward plans to restore solvency if program is projected to be insolvent.

96%

Fiscal commission

Raises amount of income subject to Social Security tax from $106,800 to $190,000 in 2020; raises retirement age to 69 in 2075 and reduces benefits for wealthiest retirees.

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Rejects fundamental changes to Medicare. Proposes savings by standardizing the Medicaid matching rate and enacting prescription drug reforms and anti-fraud measures.

96%

President's budget

Cuts Medicaid payments to states, reduces Medicaid gaming and enacts some prescription drug reforms.

96%

House budget

Ends Medicare as an open-ended entitlement and replaces Medicaid financing partnership between the federal government and states with block grants. Repeals health-care law.

96%

Fiscal commission

Strengthens cost-cutting mechanisms in health-care law to squeeze Medicare savings; permanently protects doctors from scheduled cut in payments; limits growth in health-care spending; limits state Medicaid gaming.

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Cuts farm subsidies, unemployment insurance, student loans and other programs.

96%

Obama's budget

Cuts farm subsidies, unemployment insurance, student loans and other programs.

96%

House budget

Cuts food stamps, farm subsidies, student loans and benefits for government retirees.

96%

Fiscal commission

Cuts farm subsidies, reduces benefits for government retirees and docks student-loan subsidies. Uses new measure of inflation to calculate increases for government programs.

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

96%

Obama's budget

96%

House budget

96%

Fiscal commission

96%

Budget proposal

Cuts/increases
over next 10 years

Baseline 

Spending over
next 10 years

Percent
change

Obama's framework

Calls for new tax increases on top of what would be raised by allowing upper-income tax cuts to expire.

96%

Obama's budget

Trims deductions the wealthiest Americans can claim for charitable contributions and reduces various corporate tax breaks.

96%

House budget

Lowers the top rate for individuals and corporations from 35 percent to 25 percent and eliminates revenues that would have been raised by the health-care law.

96%

Fiscal commission

Eliminates or reduces mortgage interest deduction; tax-free treatment of employer-paid health insurance; and preferred rates for capital gains and dividends. Increases gas tax and lowers top income tax rate to 29 percent or less.

96%

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Select a group to view budget:

  • President's framework
  • President's budget
  • House budget
  • Fiscal commission
  • Gang of six

Category

Amount budgeted
in 2011

  shows baseline

Spending over
next 10 years, vs. adjusted baseline

Security discretionary

Freezes non-security spending through 2015 and holds the growth of defense spending to near inflation as recommended by Secretary Gates.

$130

Non-security discretionary

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

$450

Social Security

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

Health care reform

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

Other health

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

$340

Other mandatory

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

$290

Net interest

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

$760

Revenue

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

$510

Total deficit reduction

$2,480

Category

Amount budgeted
in 2011

  shows baseline

Change
from 2010

Percent
change

Security discretionary

Freezes non-security spending through 2015 and holds the growth of defense spending to near inflation as recommended by Secretary Gates.

96%

Non-security discretionary

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Social Security

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Health care reform

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other health

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other mandatory

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Net interest

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Revenue

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Category

Amount budgeted
in 2011

  shows baseline

Change
from 2010

Percent
change

Security discretionary

Freezes non-security spending through 2015 and holds the growth of defense spending to near inflation as recommended by Secretary Gates.

96%

Non-security discretionary

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Social Security

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Health care reform

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other health

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other mandatory

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Net interest

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Revenue

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Category

Amount budgeted
in 2011

  shows baseline

Change
from 2010

Percent
change

Security discretionary

Freezes non-security spending through 2015 and holds the growth of defense spending to near inflation as recommended by Secretary Gates.

96%

Non-security discretionary

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Social Security

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Health care reform

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other health

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other mandatory

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Net interest

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Revenue

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Category

Amount budgeted
in 2011

  shows baseline

Change
from 2010

Percent
change

Security discretionary

Freezes non-security spending through 2015 and holds the growth of defense spending to near inflation as recommended by Secretary Gates.

96%

Non-security discretionary

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Social Security

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Health care reform

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other health

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Other mandatory

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Net interest

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

Revenue

Holds non-security spending to levels consistent with Fiscal Commission (real 2008 security savings in order to hold defense growth below inflation.

96%

*Baseline assumes George W. Bush-era tax cuts are made permanent on income under $250,000 but allowed to expire in 2012 on income above that amount.
SOURCE: Committee for a Responsible Federal Budget.
GRAPHIC: Kat Downs, Laura Stanton and Karen Yourish - The Washington Post. Published May 20, 2011.

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