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Deficit Reduction, Phase One

September 25, 2012 at 3:42 PM

Debates over how -- and how much -- to reduce projected deficits often overlook the fact that the first stage of large-scale deficit reduction is already in law. As our new report explains, legislation enacted last year, most notably the Budget Control Act, will produce $1.5 trillion in savings in discretionary (that is, non-entitlement) spending for fiscal years 2013 through 2022.

11-9-12bud.jpg

Update, November 9: we've updated this graph as explained here.



These cuts will shrink non-defense discretionary funding -- which includes an array of domestic programs ranging from education to law enforcement, food safety, and environmental protection, as well as international programs -- to its lowest level on record as a share of GDP, with data going back to 1976 (see graph).

The $1.5 trillion in discretionary cuts also will produce $250 billion in savings on interest payments on the debt, bringing the total deficit reduction achieved to date to more than $1.7 trillion.


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