Controversy continues over the amount of deficit reduction in President Obama’s fiscal year 2013 budget. In today’s Washington Post, fact-checker Glenn Kessler asserts that “no serious budget analyst” agrees that the Obama budget would reduce deficits by $4 trillion over ten years. As we’ve previously written, however, the $4-trillion figure is a sound one, is based entirely on Congressional Budget Office (CBO) data, and does not include any gimmicks or any savings from winding down the wars in Iraq and Afghanistan.
By way of comparison, Kessler says that the budget plan from presidential deficit commission co-chairs Erskine Bowles and Alan Simpson would yield more than $6 trillion in deficit reduction over the next ten years. That’s right. In a new paper, my colleague Richard Kogan estimates that Bowles-Simpson calls for $6.3 trillion in deficit reduction over fiscal years 2013-2022.
As Kogan also explains, policymakers have already enacted about half of Bowles-Simpson’s nearly $2.9 trillion of program cuts. CBO data show that because of the caps on discretionary funding in last year’s Budget Control Act (BCA) and cuts in discretionary spending enacted earlier in 2011, discretionary spending will be $1.5 trillion lower over 2013-2022 than under the Congressional Budget Office baseline in use when the Bowles-Simpson commission deliberated (the August 2010 CBO baseline). Including the associated interest savings, the total budget savings enacted since Bowles-Simpson issued its report equal $1.7 trillion. The $6.3 trillion estimate of savings under Bowles-Simpson includes this $1.7 trillion in savings.
Thus, for an apples-to-apples comparison with the Bowles-Simpson plan, the $1.7 trillion in budget savings enacted last year has to be counted in the estimate of President Obama’s budget as well.
CBO data also show that the President’s fiscal year 2013 budget would produce $2.3 trillion in new savings over ten years relative to a current-policy baseline. That’s the baseline approach that Bowles and Simpson, the Senate’s “Gang of 8,” and the Committee for a Responsible Federal Budget (CRFB), among others, now use and that the congressional “supercommittee” used last year. Adding the $2.3 trillion in new savings that Obama has proposed to the $1.7 trillion enacted last year, the total comes to $4 trillion.
Assertions that no serious budget analysts believe the $4 trillion number is accurate are unfounded and incorrect. Moreover, CRFB’s estimate of the amount that the 2013 Obama budget would save is virtually identical to ours. And as Politifact’s corrected version of its analysis of this issue recently noted, the $4 trillion total is accurate if you count the savings enacted in 2011.
Should those savings be counted? If you want to compare Obama’s budget, or House Budget Committee Chairman Paul Ryan’s, or anyone else’s to Bowles-Simpson, then you have to count savings that Bowles-Simpson proposed and counted and that have since been enacted into law. If you don’t, the comparison won’t be valid.