How can we balance the budget in the next five years? In a series of papers on budget choices, Brookings analysts examine options for reducing domestic discretionary spending, pruning the defense budget, raising revenues, and investing additional resources in children. An overall deficit reduction plan uses the ideas developed in this series to balance the budget in the next five years. All five papers in this series, and more information about the Budgeting for National Priorities project, can be found at www.brookings.edu/budget.
Currently projected deficits are unsustainable and pose serious risks to the economy, make us dangerously dependent on the rest of the world, impose an extra “debt tax” on every taxpayer, send the bill for current spending to future generations, and weaken the ability of the federal government to invest in the future or respond to unforeseen emergencies. Both parties in Congress and the president should state unequivocally that deficits do matter and they should be honest with the American public about the nature and magnitude of the challenge. Cutting fraud, waste, and abuse, curbing earmarks, raising taxes on the very wealthy, or streamlining the staffing of the federal government is simply not enough to solve the problem. Congress and the president should make a commitment to restore fiscal balance over the next five years and to put the nation on a sustainable fiscal course over the longer term by reforming entitlements and taxes as soon as possible.
In this paper, we present a number of specific proposals that elected officials might choose to adopt. The purpose is not to suggest that these are the only options but to illustrate what a defensible deficit reduction package might contain. None of us entirely supports every element of the package. We put the proposals forward in the spirit of showing that it is possible for people of good will to come together and produce a deficit reduction plan that gets the job done.