CRFB's Reaction to the President's Budget
CRFB has just released its press release on the President's budget, including some basic analysis of the fiscal trajectory. The budget includes deficits of $6.7 trillion from 2013-2022 and would stabilize debt at over 76 percent of GDP later this decade.
The budget includes $1.6 trillion of revenue increases, $360 billion of health care savings, and $270 billion of other mandatory savings, netted against $350 billion of short-term jobs measures. We praised the budget for replacing the across-the-board sequester cuts with more timely and thought-out policies, but felt that it did not go far enough. While debt would be stabilized later this decade, it would remain at an elevated level. And over the long-term, debt would likely continue rising.
In addition, we criticized the use of "savings" from the war drawdown to help pay for higher transportation spending.
In short, the budget represents a step in the right direction, but does not go nearly far enough to put our debt on a sustainable path in the long-run. As we said in the press release:
Achieving medium and long-term sustainability will require a “Go Big” approach that combines many of the elements in the President’s budget with further savings in all areas and with more ambitious entitlement reform designed to fundamentally change the trajectory of our health and retirement programs. Without these, our fiscal problems will remain.