CRFB on President Obama's Deficit Reduction Plan
With the release of President Obama's deficit reduction plan this morning, CRFB has put out a press release commenting on the proposal.
We note that while the plan, excluding war savings, would exceed the Super Committee's mandate of $1.5 trillion, it would not be big enough to bring down the debt to sustainable levels. Also, the plan does not make the kind of changes to entitlement programs that are needed to stabilize the debt over the long-term, and completely avoids offering solutions for Social Security reform.
The Administration claims that the plan would save about $4.4 trillion in total (including interest savings, war savings, and the costs of the jobs proposals). However, as we noted in the release, counting the war savings is counting a policy that is already in place and is thus a gimmick to be avoided. Taking out the war savings and savings from the discretionary cuts in the Budget Control Act leads to total savings of less than $2 trillion. Granted, it's more than the Super Committee's mandate, but "Go Medium" seems to be a more accurate description.
|Savings by Category of President Obama's Plan|
|Category||2012-2021 Savings (billions)
|Budget Control Act||$1,200|
|Federal Health Programs||$320|
|American Jobs Act||-$447|
Note: Many numbers are rounded
As CRFB president Maya MacGuineas said in our release:
There is a growing chorus of lawmakers, business leaders, former government officials, and experts urging the Super Committee to ‘go big’ and exceed its mandate. If we want to fully address our debt problems, the Super Committee will have to exceed its mandate and go well-beyond the proposals the President has called for.