CBPP President Robert Greenstein just issued a statement on the President’s fiscal year 2014 budget. Here’s the opening:
President Obama’s budget includes a $1.8 trillion deficit reduction package that reflects his last offer to Speaker Boehner during their budget talks in December. The new budget — like the President’s offer — represents a substantial compromise on the President’s part; compared to the President’s original offer to the Speaker from earlier in December, it contains $400 billion less in new revenue, $200 billion more in discretionary program cuts, and the proposal to use the alternative cost-of-living adjustment known as the “chained CPI” for various benefit programs and the tax code.
The budget contains a mix of spending cuts and revenue increases that would replace the sequestration cuts and achieve the important goal of stabilizing the debt over the next decade (and putting it on a slightly downward path). The budget is designed to protect the still-weak economy from the effects of premature deficit reduction — by both including short-term investments to address infrastructure needs and by phasing in some of the deficit reduction measures that would replace sequestration in order to allow the economy to continue its recovery. The discretionary program cuts, for example, would not start until 2017.
That would be a welcome change from the current budget path. The Congressional Budget Office estimates that if sequestration remains in effect, it will cost the economy 750,000 jobs by the end of this year.
As it stands, the 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.