In a report issued today the bipartisan Committee for a Responsible Federal Budget praised President Obama for “moving the ball forward” with his additional proposals for deficit reduction, but said he fell short by not arriving at the same level of deficit reduction proposed by his Fiscal Commission last December – $4 trillion over ten years – which the CRFB called “the appropriate standard to strive for.”
Last week the President set the goal of reducing the deficit by $4 trillion in 12 years, and proposed that if by 2014 debt projections are not on a declining path as a share of GDP, a “Debt Failsafe” would be triggered imposing across-the-board spending reductions. The trigger would not apply to Social Security, Medicare, or programs that benefit the poor..
The CRFB paper assesses that under the president’s plan that “Debt Failsafe” would be triggered.
The report also estimates that the much of the savings in the President’s proposal would come in the last two years: thus $2.9 trillion in savings would come over 10 years.
And when the Congressional Budget Office numbers replace those of the White House’s Office of Management and Budget, that shrinks to $2.5 trillion over 10 years.
This is how the report assesses that the proposal would not reduce the deficit to 2.5 percent of GDP in 2015 or 2 percent in 2020, as claimed.
“Using CBO assumptions, it appears unlikely that the policies proposed in the President's Framework would be sufficient to reduce debt to a manageable level – at least not without further action spurred by the proposed Debt Failsafe,” the group said. “Thus, we believe the President should work with Congress to offer additional savings on top of what he has already proposed.”
White House spokeswoman Amy Brundage said in a statement that ""Under the Administration’s estimates, the President’s framework saves $2.9 trillion over ten years and $4 trillion over twelve years. Using CBO’s more pessimistic assumptions, the President’s framework would save more not less than these totals because the Debt Failsafe would result in the additional savings needed to reduce the debt as a share of the economy. Even with the Committee for a Responsible Federal Budget’s shifting of the goalposts and failure to factor the failsafe in their analysis, they still confirm that the President’s plan would reduce the deficit substantially and prevent a large increase in the debt.”