The same deficit fundamentals that have stymied Democratic lawmakers and President Obama now confront House Republicans. Their new chairman of the Budget Committee, Paul Ryan, faces a difficult job in producing a budget resolution that dramatically improves the deficit picture while satisfying other House GOP goals, notably tax-cut extensions.
The job is even more difficult because of the sluggish economy, higher federal interest payments and the growth of entitlement programs as the population ages and health care inflation continues. Nevertheless, expectations are high after a fall campaign in which Republicans promised speedy deficit reduction without focusing much on the details.
A proposed budget for the next fiscal year that uses honest numbers and reflects Republicans’ current policy preferences will show large continuing deficits. A budget that shows greater progress on deficit reduction will require an openness to changes that Republicans have been reluctant to put in play, such as defense cuts and revenue increases.
Hypothetical budget scenarios illustrate how hard it is to substantially cut the deficit using a narrow set of policy options. Unless the options are expanded, it is difficult to see how the Republicans can produce better deficit results than the administration’s proposals.
External links:
Bipartisan Policy Center’s Debt Task Force
The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform
