Since the release of the President’s FY 2013 budget on Monday, CRFB has provided coverage of the President’s proposal through our FY 2013 blog series. Specifically, these blogs have covered CRFB’s initial reaction, key fiscal metrics in the President’s budget, proposed budget reforms, how the budget would adhere to the discretionary spending caps specified in the Budget Control Act (BCA), and how CBO might score the budget.
Today, we continue our coverage with the release of our latest paper, which takes a look at the President’s budget as a whole in more detail.
Our analysis looks at the President’s budget's jobs proposals, discretionary and mandatory spending, tax policy and economic assumptions. Under the President’s budget, debt held by the public would rise from 68 percent of GDP in 2011 to 74 percent in 2012 and 77 percent in 2013, before declining to over 76 percent in 2018 and stabilizing at that level through 2022. Deficits would fall from 8.5 percent of GDP in 2012 to 5.5 percent in 2013, 3.0 percent in 2017, and roughly 2.8 percent annually between 2018 and 2022.
The president’s budget proposes:
- $2.1 trillion in new revenues through 2022 relative to current policy, $360 billion in health care reductions, and $160 billion in other mandatory reductions.
- A $350 billion jobs package, nearly $370 billion in tax cuts, and nearly $270 billion in increased spending – mostly for education and infrastructure.
These proposals, along with the discretionary caps in the BCA, the drawdown in war spending, and the economic recovery, would increase revenue from 15.8 percent of GDP in 2012 to 20.1 percent in 2022 and reduce spending from 24.3 percent of GDP in 2012 to 22.8 percent by 2022.
As we state in our report:
The President’s budget takes an important step by laying out a number of policies to stabilize the debt. Given how serious the nation’s fiscal challenges are, however, the President should have laid out a specific comprehensive plan to return the nation to a sustainable fiscal path, rather than just a first step.