As we all know, the United States is running a sizable deficit — a continuation of a trend occurring for several years since the budget surpluses of the Clinton Administration. As several BMG’ers have written on, the “National Commission on Fiscal Responsibility and Reform” (in other words, the Obama deficit commission) recently released a draft proposal suggesting a combination of tax changes and spending cuts to deal with America’s fiscal problems. (Ed. note: as Christopher correctly notes in the comments, this draft proposal is not that of the whole Commission, but only of its two co-chairs, Erskine Bowles and Alan Simpson. -David)
While there are a number of aspects to this report that should at least be part of the conversation — a few specific spending cuts to discretionary programs, slight changes to Social Security, reforms to the tax code — the overall report is certainly a disappointment. The report barely mentions rising health care costs (which, as the graph Charley displayed in an earlier post, is the largest driver of future deficits), and when it does, it isn’t particularly serious about it (for example, whether a good idea or not, enacting “comprehensive tort reform” will do little to curb health care inflation). The plan also makes the tax system less progressive by reducing the top income rates on the wealthiest while partially making up for this by eliminating tax breaks, some of which are particularly beneficial to middle-class folks.
So I don’t like this particular plan overall, but I wanted to highlight an interesting new feature that the New York Times has released: an interactive budget puzzle that allows you to specify how you would actually cut spending and/or raise taxes in order to reduce the deficit (the Times also provides a couple of background articles accompanying their budget puzzle “game”). I normally wouldn’t devote a whole post to linking to one specific project like this, but this exercise is, in my opinion, something everyone should try out — especially those Tea Party deficit-hound pretenders who like the sounds of deficit-cutting rhetoric but never back it up with actual and substantial cuts. The Times’ budget puzzle isn’t perfect — one might think of other ways to cut spending or raise revenue, and the numbers are necessarily projections and not hard numbers — but this is something that you should convince your conservative friends to check out (I’m hoping RMG’ers try the budget puzzle out!). This is especially so if they think they can solve the budget problem without tax increases or cuts to defense and Medicare, as preposterously claimed by Republicans across the country during this past election cycle.