View Fiscal Solutions Comparison Table
View Federal Debt Comparison Chart
On Wednesday, December 1, the National Commission on Fiscal Responsibility and Reform released its report, The Moment of Truth. The proposed changes to federal programs and taxes would meet the Commission's charge of balancing the budget (excluding interest payments on the debt) by 2015 and improving the nation's long-term fiscal outlook.
The report is a significant addition to the series of recently-released, comprehensive plans to bring the budget back into balance and reduce the country's mounting debt burden. In mid-November the Bipartisan Policy Center's Debt Reduction Task Force released its own plan, Restoring America's Future. On Monday, November 29, the Economic Policy Institute, Demos and the Century Foundation released their budget blueprint, Investing in America's Economy. The Cato Institute released a report, A Plan to Cut Spending and Balance the Federal Budget, which would balance the budget through spending cuts alone. Each outlines a different fiscal future for the country:
- National Commission on Fiscal Responsibility and Reform: A goal of balancing the primary budget by 2015 and stabilizing the debt by 2014.
- EPI/Demos/The Century Foundation: A goal of balancing the primary budget by 2018 (to wait until economic recovery is well under way) and stabilizing the debt by 2025 at 90 percent of GDP.
- Bill Galston and Maya MacGuineas, The Future is Now: A goal of reducing the debt to 60 percent of GDP by 2020 and lowering it thereafter.
- Cato Institute: A goal of balancing the budget by 2020 and stabilizing thereafter by reducing the size of government.
- Bipartisan Policy Center's Debt Reduction Task Force: A goal of balancing the primary budget by 2014 and stabilizing the debt by 2020.
Comparison of Fiscal Solutions Plans
National Commission
on Fiscal Responsibility
and Reform, The Moment of Truth
The Bipartisan Policy Center, Restoring America’s Future
Galston-MacGuineas Plan, The Future is Now
EPI/Demos/The Century Foundation, Investing in America’s Economy
Cato Institute,
A Plan to Cut Spending and Balance the Federal Budget
Balance primary budget by 2015; stabilize debt by 2014, improve long-run fiscal outlook
Balance primary budget by 2014, stabilize debt by 2020
Reduce debt to 60 percent of GDP by 2020, gradually lower it thereafter
Balance primary budget by 2018; stabilize debt by 2025
Balance primary budget by 2020; stabilize debt
2012; payroll tax holiday in 2011
Revenue changes in 2014, spending cuts when unemployment is below 6 percent
National Commission
on Fiscal Responsibility
and Reform, The Moment of Truth
The Bipartisan Policy Center, Restoring America’s Future
Galston-MacGuineas Plan, The Future is Now
EPI/Demos/The Century Foundation, Investing in America’s Economy
Cato Institute,
A Plan to Cut Spending and Balance the Federal Budget
- Cuts through 2013; capped at half the inflation rate through 2020
- Create firewall between security and non-security programs through 2015
- Short-term freeze, then capped at GDP growth
- Major cuts to defense spending
- 3 year non-defense freeze; then capped at inflation
- Major cuts to defense spending
- Increased spending on infrastructure, education, and research and development
- Major cuts to all discretionary
- Privatization of several federal programs
- Eliminate Departments of Education and Housing and Urban Development
National Commission
on Fiscal Responsibility
and Reform, The Moment of Truth
The Bipartisan Policy Center, Restoring America’s Future
Galston-MacGuineas Plan, The Future is Now
EPI/Demos/The Century Foundation, Investing in America’s Economy
Cato Institute,
A Plan to Cut Spending and Balance the Federal Budget
- Use different measure of inflation
- Reduce growth in benefits for the wealthy
- Cover all new state and local employees after 2020
- Tax 90 percent of wages by 2050
- Establish new minimum benefit
- Slowly raise early and full retirement age (create hardship exemption)
- Establish new benefit for oldest old retirees
- Use different measure of inflation
- Reduce growth in benefits for the wealthy
- Cover all new state and local employees
- Tax 90 percent of wages
- Increase minimum benefit
- Index retirement age to life expectancy
- Use different measure of inflation
- Reduce growth in benefits for the wealthy
- Cover all new state and local employees
- Increase normal retirement age
- Index early and normal retirement age to life expectancy
- Establish minimum benefit
- Establish old age bonus
- Replace some of payroll tax with carbon tax
- Create 2 percent addon account
- Increase the payroll tax
- Tax 90 percent of employee wages and 100 percent of employer wages
- Implement price-indexing for benefits
- Slowly raise retirement age to 70
- Expand Independent Payment Advisory Board
- Pay for updates to physician payment
- Increase premiums and rebates from drug companies
- Greater payment bundling
- Transition to premium support system
- Expand Independent Payment Advisory Board
- Increase cost sharing
- Increase eligibility age
- Transition to premium support system
- Strengthen cost containment provisions in health reform
- Increase beneficiary premiums
- Increase deductibles
- Cut payment error rates
- Reduce federal administrative costs
- Prohibit state provider tax gimmicks
- Move Medicare/ Medicaid beneficiaries to managed care
- Reform federal-state shared funding system
- Give states flexibility in imposing nominal copays
- Convert to a block grant and freeze spending
- Medical malpractice reform
- Phase out the tax exclusion ofemployer health care
- Develop a global budget
- Medical malpractice reform
- Phase out the tax exclusion of employer health care
- Medical malpractice reform
- Cap tax exclusion of employer health care for mid-low income earners in the near future, and phase out over time
- Create a budget
- Introduce a public option
- Repeal Affordable Care Act
- Reduce farm subsidies
- Reform federal retirement plans
- Reduce farm subsidies
- Reform federal retirement plans
- Reform military health care
- Reduce farm subsidies
- Fix public sector compensation to private sector wage growth
- End farm subsidies
- Reduce food subsidies
- Reform public employee retirement
National Commission
on Fiscal Responsibility
and Reform, The Moment of Truth
The Bipartisan Policy Center, Restoring America’s Future
Galston-MacGuineas Plan, The Future is Now
EPI/Demos/The Century Foundation, Investing in America’s Economy
Cato Institute,
A Plan to Cut Spending and Balance the Federal Budget
- Eliminate most deductions and simplify those that remain
- Three rates: 12, 22, and 28 percent
- Create a "failsafe" that reduces tax expenditures and rates if Congress fails to act
- Percent decrease in after-tax income is greatest for wealthiest Americans
- Eliminate most deductions and simplify those that remain
- Two rates: 15 and 27 percent
- Percent decrease in after-tax income is progressively distributed
- Reduce tax expenditures by 10 percent
- Simplify tax expenditures
- Reduce individual income tax rates
- Cap itemized deductions at 15 percent; convert some to refundable credits
- Repeal Bush tax cuts for those making more than $200,000 (for individuals) and $250,000 (for joint filers)
- Surtax on highincome individuals
- Eliminate all deductions
- One rate: 28 percent
- Territorial system
- Eliminate most deductions and simplify those that remain
- Single rate of 27 percent
- Revenue-neutral reform that reduces rates and broadens base
-Eliminate several deductions
- Increase gas tax and dedicate to highway funding
- Payroll tax holiday
- Establish "deficit reduction" consumption tax
- Enact broad-based carbon tax
- Carbon tax or capand- trade
- Increase gas tax
- Financial crisis responsibility fee
- Financial speculation tax
National Commission
on Fiscal Responsibility
and Reform, The Moment of Truth
The Bipartisan Policy Center, Restoring America’s Future
Galston-MacGuineas Plan, The Future is Now
EPI/Demos/The Century Foundation, Investing in America’s Economy
Cato Institute,
A Plan to Cut Spending and Balance the Federal Budget
- Impose strict discretionary caps
- Establish a debt stabilization process
- Automatic triggers for unemployment benefits
- Reform budget scoring
- Impose strict discretionary caps
- Biennial budgeting
- Stricter PAYGO rules
- Create a fiscal accountability commission
- "Progressive" PAYGO (Progressive PAYGO would apply enforcement rules to spending, tax expenditures, and would exclude mandatory spending on education; and would apply to Medicare physician payments.)
- Include tax expenditures in the budget process
While the plans differ in their proposed remedies, they all seek to balance the budget (excluding interest payments) within 10 years. Achieving that goal would stop the level of debt from increasing relative to the size of the overall economy. The chart below compares projected debt under the various plans.
With policy changes, the debt is currently projected to increase rapidly as the gap between spending and revenues grows—an outcome that would likely reduce economic growth and lead to a less prosperous and secure future for all Americans.
About the Commission
The National Commission on Fiscal Responsibility and Reform was established by President Obama's executive order in February 2010. The commission was modeled after proposed legislation that was introduced by Senators Kent Conrad (D-ND) and Judd Gregg (R-NH). The commission consisted of 18 individuals: six chosen by the President and 12 current members of Congress. Alan Simpson, a former Republican Senator from Wyoming, and Erskine Bowles, a chief of staff in the Clinton White House, co-chaired the commission. Under the provisions of the executive order, any proposal needs the support of 14 of the 18 members of the commission to receive an endorsement.
About the Other Plans
- Our Fiscal Security is a joint project of Demos, the Economic Policy Institute, and The Century Foundation. It is "dedicated to promoting an economic path that achieves fiscal responsibility without undermining national strength" with a focus on economic growth, job creation, and the middle class.
- Bill Galston is the Ezra Zilkha Chair in Governance Studies and Senior Fellow at the Brookings Institution. Maya MacGuineas is President of the Committee for a Responsible Federal Budget and Director of the Fiscal Policy Program at the New America Foundation.
- The Bipartisan Policy Center Debt Reduction Task Force was co-chaired by Alice Rivlin, former Director of the Congressional Budget Office and the Office of Management and Budget, and Pete Domenici, former Senator from New Mexico and chair of the Senate Budget Committee. The Task Force was a project of The Bipartisan Policy Center, founded in 2007 by former Senators Howard Baker, Tom Daschle, Bob Dole, and George Mitchell. The Task Force is dedicated to developing policy solutions to critical national issues that appeal to both sides of the partisan divide. They aim to develop policy initiatives that can garner popular and political support and that will represent a centrist perspective on issues.
- The Cato Institute is a Washington, DC-based "public policy research organization dedicated to the principles of individual liberty, limited government, free markets, and peace."