The Congressional Budget Office released their analysis of President Obama's 2014 budget proposal today. The bottom line? It more than solves our deficit problem for the next decade, and for some time beyond that. And unlike the status quo — which also reduces the deficit, though not by as much — it brings the deficit down gradually over 10 years, rather than reducing it sharply over the next two years and then watching it rise slowly over the next decade.
The Senate Democrats' budget and the House Republicans' budget also bring deficits down to more-than-manageable levels through the mid-2020s. But the best part of the CBO's analysis isn't in their report. It's a chart CBO Director Doug Elmendorf put on his blog that offers an unusually clear look into how the three budgets differ — and how they don't:
The first thing you'll notice: All these budgets look pretty similar. In fact, the Senate Democratic budget looks almost identical to the White House's budget. If you showed a Martian this graph, they would not think Washington is a particularly divided place.
But pay close attention to where the White House and the House Republicans actually diverge. It puts the lie to a lot of what the two parties want you to think they're arguing about.
For reasons related to both coalition politics and polls, Democrats and Republicans tend to fight over taxes, Social Security and Medicare. But that's not where their budgets really disagree. Over the next 10 years, spending on Medicare and Social Security is almost identical across the plans. Taxes offer more of a contrast: President Obama's budget envisions them sixth-tenths of a percentage point of GDP higher than the Republicans do. Defense spending also differs, and cuts against the narrative that Democrats always want to spend more and grow government while Republicans want to spend less and shrink it: Republicans want to spend more on defense than Democrats.
But the real difference comes in government spending on everything that's not Social Security, Medicare or defense. The difference there is 1.5 percent of GDP — which is almost three times the size of the difference on taxes. It's 15 times — yes, 15 times — the difference on Medicare and Social Security.
That spending includes everything from Medicaid and Obamacare to food safety, education, infrastructure, housing subsidies, the court system and the FBI. The GOP's deep cuts there are required if they're going to fulfill their disparate goals of balancing the budget while holding taxes low and letting defense spending rise.
The question, of course, is why those are their goals. There's no pressing need to balance the budget in the next decade. Ryan's 2013 budget, which his fellow Republicans supported enthusiastically, didn't balance until 2038. And if you believe, as Republicans claim to, that the growth of government is really a story of out-of-control entitlement programs, it doesn't make sense to spend the next 10 years cutting the non-Medicare and Social Security programs part of the budget. As for taxes, if you believe, as Republicans again claim to, that tax expenditures are equivalent to spending, then it's unclear why they can't be cut to reduce the deficit — a decision that would unlock a bipartisan budget deal.
The White House's budget raises some similar questions, though since its choices are less extreme, the questions are less stark. But a core truth of their budget is they're bringing non-Medicare, Social Security and Medicaid spending to historically low levels. It's not a budget that's consistent with the "Sputnik moment" rhetoric that the administration often favors. Their budget is a lot rougher on the categories of spending that aid social mobility and "winning the future" than it is on, say, Social Security.
All that said, this graph puts the lie to much of Washington's budget debate. In terms of actual dollars over the next 10 years, the two parties are not arguing over Medicare and Social Security. And they're not even arguing over taxes or defense, for the most part. Their biggest argument is over everything else.