Nov 15, 2010
One of the hardest things in the budget debate is giving people a sense of scale: what makes a big difference on our budget problems, and what’s just a ding on the fender. The New York Times really went to town on the budget this weekend, and as you’ll see below, the best thing they did is launch an interactive feature that helps give you that sense of scale. Plus, that feature inspires the best one-liner on the deficit we saw all weekend. Finally, Congress is back today to start a lame-duck session filled with fiscal issues that can’t be put off. So if you think the debate’s been rough so far, it’s only going to get rougher.
You Fix the Budget
The You Fix the Budget interactive, published in the New York Times Week in Review section, lets you try out different tax increases and spending cuts, and see how far you get in closing both the projected deficit in 2015 and in 2030. The 2030 deficit matters, as the Times points out, because our fiscal problems are mostly in long term, when the costs of Medicare, Medicaid and Social Security soar, caused by out-of-control health care costs and the retirement of the baby boomers. As David Leonhardt of the Times puts it:
The ultimate goal is to help you judge the deficit proposals that are now emerging. Do you think they cut spending too much and should raise taxes more? Or the reverse? Are they too aggressive or too meek on military spending? How will they affect income inequality? How might they help or hurt economic growth?
One of the big takeaways, of course, is that some widely backed ideas (like eliminating earmarks or cutting the pay of federal workers) don’t do that much either in the short or long term, while others (capping Medicare cost increases, or letting the Bush tax cuts expire) do a lot.
There are two additional points worth considering. Barry Ritholtz at the Big Picture blog comes up with his plan, but says “Of course, the discussion as to why we should be fixing the deficit in a mediocre recovery is not broached.” You can see Leonhardt’s response to that on The How and When of Deficit Cutting”.
Secondly, Harvard economist and blogger Greg Mankiw sums up the core of the problem of “You Fix the Federal Budget” in one line: “It takes about a minute. Persuading your fellow citizens may take a bit longer.” .
Billons and trillions tend to boggle the mind – after a while, numbers can become just noise, unless you make them concrete. That’s what What’s a Billion Worth? tries to do. And to look at how the federal government has been raising and spending money in the past, check out Our Fiscal Future’s Visual Budget Tool.
Getting the Lame Ducks in a Row
Nothing much on the agenda for Congress’ lame-duck session, other than the Bush tax cuts, deciding whether Medicare should be allowed to cut payments to doctors and hospitals, and passing some spending bills so the whole government doesn’t shut down.
Hobbled Dems, eager GOP back for lame-duck session
The Wall Street Journal editorial page says the first test of the new Congress will be what it does about earmarks and who gets put on the key appropriations committees.
The GOP’s Spending Tests
There’s still plenty of followup on the Bowles-Simpson deficit proposal. The Brookings Institution does a roundup of its own experts’ reactions. Most are generally positive, but Henry Aaron (no relation) says it’s “rife with problems.”
Former Obama budget director Peter Orzag says the plan offers liberals a chance to improve Social Security without raising the possibility of privatization.
Safer Social Security
In Mother Jones, Kevin Drum argues that the commission missed the boat by not focusing almost exclusively on rising health care costs, calling discretionary cuts and Social Security changes “shiny baubles that distract us.” Focusing on healthcare – and the tax increases Drum says are necessary to deal with our aging population – would have been the harder choice, he argues.
Maya MacGuineas of the New America Foundation writes at CNNMoney.com defending the Simpson-Bowles plan as a necessary start to “an important conversation.” She says that conservatives should move off their “no tax increase” redoubt, and progressives shouldn’t wait out the healthcare entitlement reform hoping for a better deal down the
Stop whining about Bowles-Simpson. Let’s make it better
This piece, originally in the St. Petersburg Times, does a useful job of comparing some of the budget plans that have come out in the past few weeks. The federal budget and you: Plans to fix the deficit
If that’s not enough, you can get roundups of more ideas from The New York Times’ Room for Debate feature (with 16 different analysts) 16 Ways to Cut the Deficit
One reason why the Europeans seem more spooked by the risk of a national debt crisis is that they’ve already got one, as the EU considers a bailout of Ireland, whether the Irish want one or not. And Alan Greenspan tells Meet the Press that as far as the United States goes, “We’ve got to resolve this issue before it gets forced upon us.”
Ezra Klein makes a bet in today’s Wonkbook: that the next Congress will pass legislation that will cause the Federal deficit to rise over the next two year. Reason? Voters care more about economic growth and jobs than deficit reduction – Klein cites a CBS News poll – and that will keep poll-watching legislators from acting. “That’s not to say voters like the deficit. They don’t. And it’s not to say they wouldn’t like to see it go down. They would. But at the expense of other people, not themselves.” (For a counterpoint to the CBS poll he cites, check out last week’s Pew Research Center survey, which finds more support for deficit reduction but also says the public’s still divided on key points about what the government should do.
Chart of the Day
Deficits are more common than not in the United States, in fact we’ve only balanced the budget in four years out of the last 40.
Fiscal Future Daily is produced by Public Agenda for Choosing Our Fiscal Future, in partnership with the National Academy of Public Administration and with support by the John D. and Catherine T. MacArthur Foundation. The editor in chief is Scott Bittle, with contributors Francie Grace, David White, Jen Vento, Hart Hooton and Tom Watson.