The new deficit-reduction plan from a majority of Democrats on the congressional Joint Select Committee on Deficit Reduction (the “supercommittee”) marks a dramatic departure from traditional Democratic positions — and actually stands well to the right of plans by the co-chairs of the bipartisan Bowles-Simpson commission and the Senate’s “Gang of Six,” and even further to the right of the plan by the bipartisan Rivlin-Domenici commission. The Democratic plan contains substantially smaller revenue increases than those bipartisan proposals while, for example, containing significantly deeper cuts in Medicare and Medicaid than the Bowles-Simpson plan. The Democratic plan features a substantially higher ratio of spending cuts to revenue increases than any of the bipartisan plans. –
With a spending cut/revenue ratio of 6:1, the deficit reduction plan by the Democrats goes several steps beyond any of the bi-partisan plans previously suggested.
Nevertheless, the Republicans shot it down out-of-hand. The House GOP won’t budge on tax (revenue) increases. This puts the entire budget-cutting process in jeopardy. If the committee can’t decide on a budget by the end of November, automatic, across-the-board cuts be go into effect.
COMPARISON OF DEFICIT-REDUCTION PROPOSALS
Savings in Billions of Dollars, 2012-2021, Relative to Current-Policy Baseline
|Bowles-Simpson||Gang of Six||Democratic Offer1|
|Medicare and Medicaid2||383||500||475|
|Other Mandatory Programs
(including chained-CPI proposal)
|Subtotal, Spending Cuts||2,061||2,038||2,200|
|Debt Service Savings||796||783||685|
|1 Figures for the Democratic offer do not include economic stimulus proposals, the details of which are not available but apparently include both temporary tax-cut measures (like an extended payroll tax reduction) and temporary spending increases (like an extension of federal unemployment benefits).
2 The Gang of Six plan showed two alternative levels of health cuts, $500 billion and $383 billion.
3 The Democratic offer is adjusted to include $900 billion in discretionary savings enacted in the April continuing resolution and the Budget Control Act, for comparability with the other two plans. The Fiscal Commission and the Gang of Six plans measure discretionary savings relative to CBO’s March baseline. Sources: Estimates for Bowles-Simpson plan are from Moment of Truth Project, Updated Estimates of the Fiscal Commission Proposal, June 29, 2011. Estimates for the Gang of Six plan are from material provided by staff. Estimates for the Democratic offer are based on press accounts. Estimates have been adjusted by CBPP staff to put them on a comparable basis.