Center on Budget and Policy Priorities

Budget — Federal

The President’s Deficit-Reduction Package & Other Proposals

"The President’s 2014 budget is presented in two parts. One part includes the package of deficit- reduction policies that would reduce the deficit by $1.8 trillion over the next decade and go somewhat beyond stabilizing the debt as a share of the economy, setting it on a slight downward path.

"[T]he rest of the President’s budget includes important proposals that also deserve serious consideration. These include proposals to expand access to high-quality early education, funding to upgrade the nation’s transportation infrastructure, and measures …to help people struggling in today’s labor market to prepare for and find jobs. Taken together, the proposals are fully paid for and actually reduce the deficit slightly."

Related Greenstein Statement: "Tough Policy Choices"in the President’s Budget

Greenstein Statement:
“Tough Policy Choices”in the President’s Budget

"[T]he package makes tough policy choices while largely adhering to the principle, as enunciated by the Bowles-Simpson commission, that deficit reduction should not increase poverty or inequality. Nevertheless, the budget’s substantial spending cuts, both in entitlements and discretionary programs, would have real-world consequences for millions of individuals and families. They leave little room for the President to move further to the right and still protect vulnerable Americans."

Greenstein Commentary: The Debate Over the Chained CPI

The news that President Obama’s new budget will propose adopting the “chained”Consumer Price Index (CPI) for cost-of-living adjustments in Social Security and other retirement programs, and annual inflation adjustments in the tax code, has intensified the debate on this issue.

Some commentators portray this proposal as a test of fiscal rectitude, arguing that the chained CPI more accurately measures inflation —period —and that if you’re opposed to it, you aren’t really serious about addressing deficits. Others, including many progressives, strongly reject the proposal, believing it would impose serious hardship on seniors with modest incomes.

I’m not comfortable with either position.

Related:

Topics

Basics

The federal budget outlines the U.S. government’s spending plans for the coming fiscal year and how it plans to pay for that spending. The three biggest areas of federal spending in 2010 were defense and security, Social Security, and public health insurance programs, each of which made up roughly one-fifth of the budget. Roughly four-fifths of the revenue that the federal government collected to pay for these programs came from individuals, through income and payroll taxes.

Policy Basics:
- Where Do Our Tax Dollars Go?
- Introduction to the Federal Budget Process
- Deficits, Debt, and Interest
- Congress's "Pay-As-You-Go" Budget Rule

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The Center informs the debate over federal budget priorities by analyzing the President’s budget and major congressional proposals throughout the annual budget process. We pay particular attention to the adequacy of funding for programs that assist low- and moderate-income families. We also analyze long-term budget challenges and measures to address them. In addition, we promote measures to improve fiscal responsibility.