With the federal budget season opening, President Obama will step up to the plate on Wednesday, when he plans to officially reveal his proposed budget for Fiscal Year 2014. While his proposals will stir vigorous debate, there is reason to be optimistic that they could also move budget discussions in the right direction.
Preliminary reports indicated the budget would include a mix of spending cuts and revenue increases that would bring the deficit down to 1.7 percent of GDP by 2023.
“That’s higher, but more realistic, than the House Republicans’ balanced budget goal, and more ambitious than the Senate Democrats’ goal of bringing the deficit down to 2.2 percent of GDP,” Concord Coalition Executive Director Robert L. Bixby says. “In other words, it aims for a compromise, albeit one closer to the Senate Democrats’ goal, which is hardly surprising.”
Among the critical questions about the President’s plan: Will it keep the deficit on a downward track? Will it pay for new initiatives in a credible and sustainable way? Does it provide savings over time to meet the growing pressures from an aging population? Are its economic assumptions realistic?
“To make those assessments, we’ll have to see the details,” Bixby wrote in a blog Monday. “From what has been officially leaked, however, the President’s budget will at a minimum have the building blocks of a substantial deal on deficit reduction, if not the ‘grand bargain’ many have advocated.”
Elements of the plan, Bixby adds, will “test the seriousness of those in Congress who say they want a bipartisan compromise.” Such a compromise will require both higher revenues and cuts in projected entitlement spending, and the President’s plan will apparently have both.
“If so, it will break with the tradition of fantasy budgets recently embraced by the two congressional plans adopted in March,” Bixby says in the blog. An accompanying infographic explains some of the problems in these congressional plans.