Comparing the Major Budgets and Updated Simpson-Bowles
We've already provided topline comparisons of the budget metrics in the FY 2016 Congressional budgets and the President's budget, showing that most of the budgets would put debt on a clear downward path as a share of GDP. But it is also interesting to see how the major budgets presented match up with another plan: the Bipartisan Path Forward (BPF) put forth by Erskine Bowles and Al Simpson in April 2013.
For context, the BPF was presented after the fiscal cliff negotiations yielded only small deficit reduction and no lasting solution to the projected rise in debt. The plan replaced most of the sequester, which had taken effect the prior month, with significant mandatory savings and revenue from tax reform to put debt on a downward path to 69 percent of GDP by 2023.
Our re-estimate of the plan updates the BPF by moving the start dates of most policies to 2016 or 2017, accounts for policies that have already been enacted, and most importantly, accounts for changes in CBO's budget baseline since February 2013. Overall, compared to a "PAYGO baseline," CBO's concept of current law but excluding savings from drawing down war spending, the BPF (including Step 4) would save $2.2 trillion over ten years and leave debt in about the same place as the original estimate.
Compared to CBO's estimate of the President's budget, the BPF would provide for more deficit reduction and put debt on a downward path as opposed to a slightly upward path. Despite having slightly more sequester relief and less revenue, the BPF saves much more in health care on net, while not having the other mandatory spending increases that the President's budget contains.
Compared to the House and Senate budgets, though, the BPF would not provide as much deficit reduction, mostly because those budgets repeal the gross spending increases in the Affordable Care Act. The budgets also include much more other mandatory savings and get net savings from discretionary spending rather than increasing it, but the BPF also gets more deficit reduction from tax reform, implementing chained CPI, and reforming Social Security (note that budget resolutions are prohibited from proposing direct changes to Social Security).
|Cost/Savings (-) Through 2025 in the Major Budgets and the BPF (Billions of Dollars)|
|Area||President's Budget||House Budget||Senate Budget||Bipartisan Path Forward|
|Tax Reform (Net)||-$845||$0||$0||-$585|
Source: CBO, House Budget Committee, Senate Budget Committee, CRFB calculations
*Includes both spending and revenue changes
^Includes chained CPI, program integrity, mandatory sequester repeal, and immigration reform
Numbers may not add up due to rounding
This comparison should give readers some sense of each sides' general vision for the budget. You can also read more about developments with the FY 2016 budget here.
Update: The table has been updated to include all of Step 4 in the Bipartisan Path Forward, not just the highway policy.