Democrats' Deficit Reduction Plan

Moneybox
A blog about business and economics.
March 12 2013 1:00 PM

Here's How Democrats Want to Cut the Deficit

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Sen. Patty Murray is aiming for $1.85 trillion in deficit reduction to put the debt:GDP ratio on a falling path

Photo by Alex Wong/Getty Images

Senate Democrats aren't going to unveil their budget proposal until tomorrow, but a Democrat close to the talks was able to share the basic topline numbers they're looking at. Unlike Paul Ryan, Patty Murray won't be trying to craft a budget that achieves balance. Instead, she's aiming for $1.85 trillion in deficit reduction to put the debt:GDP ratio on a falling path. More to the point, she's looking for a budget that sacrifices the interests of richer people rather than the poor and the middle class. It starts with $100 billion in targeted economic stimulus to address high unemployment, features $975 billion in rescinded tax expenditures, $275 billion in cuts to health care spending (likely structured as cuts in provider payments rather than in benefits or eligibility), $242 billion in reduced interest payments, $240 billion in military cuts, and $218 billion in other cuts. 

In pie form, that looks like this:

democrats deficit
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As I wrote in January, Murray is much closer to the ideological center of the Democratic caucus than former budget committee head Kent Conrad ever was, so this makes it easier to craft a politically palatable strategy. I think the Pete Peterson crowd is going to look at this and say that it doesn't really tackle the long-term drivers of deficit growth. The flipside is that it lays out a sustainable path over the next 10 years and does so without any drastic cuts to popular programs or asking the poor to pay a disproportionate price for deficit reduction.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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