President’s Deficit Plan Contains Less Revenue than Other Plans
Part of a Series
President Barack Obama’s deficit reduction plan, released last week, is variously described as “partisan,” “[giving] his liberal critics exactly what they wanted,” and “a direct appeal to his often-disgruntled base.”
It seems like the driving force behind these descriptions is the fact that the president’s plan calls for about $1.5 trillion in new revenue over the next 10 years. But the president’s plan actually contains significantly less revenue than every major bipartisan deficit reduction plan, including the Bowles-Simpson plan, the Gang of Six plan, and the Bipartisan Policy Center’s plan.
All three of those deficit plans share some common elements. They all received significant support either from current or former Republican members of Congress, and they all rely on more revenue than does the president’s plan.
The president’s revenue proposals do raise around $1.5 trillion over the next 10 years above what the tax system would generate if we extend most current tax policies—most significantly all of the Bush tax cuts. In terms of overall federal revenue as a share of gross domestic product—the standard measurement of the total federal tax burden—the president’s plan would bring revenue levels up to about 19.3 percent of GDP by 2021, compared to 18.4 percent of GDP if we maintain our current tax policies. That $1.5 trillion certainly sounds like a lot, and it would certainly make a substantial dent in our deficit. But it’s quite a bit less than other bipartisan proposals to cut the deficit.
For more on this topic, please see:
- Obama Deficit Plan Is Actually Short on Revenue Compared to Other Plans by Michael Linden