Spending and Revenues in the Mid-Session Review

Under the Administration's Mid-Session Review, the gap between spending and revenues is set to persist throughout the decade with barely any change in that gap, even if potentially $1.5 trillion in savings from the Super Committee materializes. Also noteworthy is that both spending and revenues will exceed their historical averages over the past few decades of about 21 percent of GDP for spending and about 18 percent of GDP for revenues.

Even if the Super Committee were to achieve its $1.5 trillion target (a target which we've shown is not up to the challenge of stabilizing and reducing our debt as a share of the economy) and the savings were allocated roughly 2/3 and 1/3 between spending and revenues, respectively, spending would still exceed 22 percent of GDP by 2021 and would be on an upward path.