How Does President Obama's Plan Stack Up?
With President Obama's deficit reduction plan now officially out, it's worth comparing the debt path under this plan to other debt paths. For the comparison graph below, we have thrown in CBO's August baseline (excluding the trigger included in the Budget Control Act), the Fiscal Commission, and CRFB's Realistic baseline. Also, note that the numbers for the Obama plan are using CBO savings numbers (presented in Table S-3 of the report).
As we suggested in our release earlier today, the President seems to accept the idea of going big and of pushing the Super Committee to exceed its mandate, but, as you can see in the graph below, his plan certainly does not go big enough.
Obviously, the plan is an improvement over the CRFB Realistic baseline, and it comes close to stabilizing the debt in the medium term. But it still leaves debt at a high level and would fail to stabilize it in the long-term -- meaning it essentially attempts to do the absolute minimum necessary to 'stabilize' the debt, and doesn't do nearly enough to set it on a declining path as a share of the economy.
The President has shown what "going medium" would look like; going big would be better.