The fiscal cliff deal did much less to reduce the deficit than either political party had promised: It included $750 billion in deficit reduction, a far cry from the $1.8 trillion to $2.5 trillion deficit proposals that the White House and House Speaker John Boehner had put forward earlier in the debate. That's prompted deficit hawks to insist that much more still needs to be done in the next phase of budget negotiations.
But the Jan. 1 fiscal cliff deal represented just one portion of the deficit reduction that's been going on since 2011. The Center for American Progress calculates that President Obama and Congress have successfully enacted $2.4 trillion in deficit reduction since the beginning of fiscal year 2011, which began in September 2010.
About one-quarter of that comes from revenues (primarily the fiscal cliff deal) and almost two-thirds from spending cuts: In it's research, CAP totals up $585 billion in discretionary cuts from the fiscal 2011 budgets passed under a GOP-controlled House and a lame-duck Democratic Congress and a GOP-controlled House. The debt-ceiling debate brought $860 billion in discretionary spending cuts through the Budget Control Act, which CAP calculates is a "10.6 percent reduction from inflation-adjusted 2010 spending levels." Combined with the fiscal cliff deal and accounting for interest savings, that totals $2.4 trillion in deficit reduction over the past two years, CAP concludes:
And here's how the 2011-2012 deficit reduction lowered the debt-to-GDP ratio (though it still would approach 90 percent beyond the 10-year budget window, which economists like Carmen Reinhart and Kenneth Rogoff believe is a dangerous threshold to cross):
That doesn't count the 10 months of the sequester that are scheduled to take effect on March 1, as the fiscal cliff deal replaced only two months of automatic spending cuts. If the rest of the sequester cuts are allowed to take effect, or are replaced with deficit reduction of equal magnitude, that will add $1.2 trillion more in further deficit reduction, or $3.6 trillion plus interest savings. It also doesn't include savings from not spending more on the wars in Iraq and Afghanistan, since, as critics havepointed out, no one is proposing to spend more on those wars. (Though all of these figures include a relatively tiny, $12 billion revenue gimmick in the fiscal cliff deal)