President Obama unveiled his federal budget plan for the 2012 Fiscal Year this morning. In its initial analysis, the Center on Budget and Policy Priorities notes that the plan would shrink the federal deficit "very significantly as a share of the economy over the course of this decade."
The Center also released a statement from Executive Director Robert Greenstein on the President’s budget proposal:
"The President’s budget would take an important step toward addressing the nation’s long-term fiscal challenge, cutting the deficit enough to stabilize the debt as a share of the economy for most of this decade. The debt would represent the same share of the economy in 2019 as in 2013, and be only 0.7 percent of GDP higher in 2021 than in 2013. Stabilizing the debt as a share of the economy is the most important fiscal goal for the decade ahead, as recent high-level fiscal commissions have noted. It would prevent a debt explosion, thereby substantially reduce the risks of a financial crisis, and give policymakers the time to address the longer-term deficits that are driven largely by rapidly rising health costs throughout the U.S. health care system and the aging of the population.
"The President’s budget achieves this goal by cutting domestic discretionary programs, securing savings in entitlement programs, limiting defense expenditures, and raising revenues primarily by curbing a plethora of tax loopholes. At the same time, it does not propose the immediate and severe cuts in domestic discretionary programs that House Republicans are proposing, which would weaken the economy (and thereby cost many jobs) before it can safely absorb such austerity measures, eviscerate key programs and services, and render the federal government unable to meet some critical national needs.
"The President’s budget, however, does not go nearly far enough to keep the debt stabilized in later decades, which the Administration acknowledges. The President and Congress will need to take much bigger steps — on both spending and taxes — to meet those challenges. The budget signals the Administration’s interest in bipartisan discussions on these issues, explicitly calling, for example, for bipartisan talks on Social Security and laying out the Administration’s principles for such negotiations."
Read the full statement here.