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New 2006 $20 currency notes are seen at the Bureau of Engraving and Printing in Washington. Getting our country back on a sustainable fiscal path will require the president, Congress, and the public to make tough choices. (AP/J. Scott Applewhite, File)
New 2006 $20 currency notes are seen at the Bureau of Engraving and Printing in Washington. Getting our country back on a sustainable fiscal path will require the president, Congress, and the public to make tough choices. (AP/J. Scott Applewhite, File)

President Barack Obama will sign an executive order today creating an 18-member panel that will be tasked with drafting a plan to significantly reduce the nation’s budget deficits by 2015. The Center for American Progress has previously detailed the dangers posed to our country by high federal deficits and growing debt as well as how a debt panel can help get the country back on a sustainable fiscal path. But getting back on that path will also require the president, Congress, and the public to make tough choices.

The United States needs to deal with these problems, and it’s in a position to do so. CAP’s report “A Path To Balance” called for a completely balanced budget by 2020, primary balance—when revenues and program spending are in balance—by 2014, and a series of intermediate targets. The administration proposes, with the commission’s help, to hit the target we set for primary balance one year later in 2015, which isn’t a critical difference.

Below are numbers showing just how big a problem we’re dealing with.

The budget gap isn’t getting any smaller

federal spending and federal revenues

$983 billion: The size of the gap between federal revenues and federal spending in fiscal year 2015 under current policies.

$231 billion: Amount of deficit reduction in 2015 included in President Obama’s most recent budget proposal.

0: Number of times that the federal budget deficit is projected to drop under 3.5 percent of gross domestic product over the next 10 years.

Federal debt is also growing and a significant amount is held by foreigners

$7.9 trillion: Amount of publicly held federal debt.

60 percent: Current portion of publicly held debt that belongs to Americans.

40 percent: Current portion of publicly held debt that is held by foreign lenders.

11 percent: Current portion of publicly held debt by Chinese lenders, or $800 billion in treasuries.

$18.5 trillion: Projected amount of publicly held federal debt by 2020.

The Bush tax cuts and rising health care costs won’t make things easier

$4 trillion: Cost over the next 10 years of making the Bush tax cuts permanent.

2019: Year federal spending on Medicare and Medicaid will exceed the entire defense budget.

President Obama inherited this fiscal challenge

$1.2 trillion: Expected size of the federal budget deficit for FY 2009 before President Obama took office.

$245 billion: Amount of increased spending in FY 2009 that actually began under President George W. Bush.

portion of total publicly held debt

40 percent: Portion of total publicly held debt that resulted from President Bush’s policies.

8 percent: Portion of total publicly held debt that has resulted from President Obama’s policies.

$2 trillion: Ten-year cost to the federal budget from the economic effects of the Great Recession.

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