Balancing the Budget the Obama Way

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In case you’re curious, here’s CBO’s take on President Obama’s proposed budget. The light blue line is their “baseline projection” which assumes that all current laws stay in effect forever and the Bush tax cuts all expire at the end of the year. It shows the federal deficit nearly disappearing by 2017. The dashed line is their “alternative scenario,” which assumes extensions of the Bush tax cuts and a few other things as well. It shows the federal deficit improving a bit, but then deteriorating to 6% of GDP by 2022.

The dark blue line is the Obama budget, and it’s somewhere in between. But here’s an important point that you can’t see just from looking at the chart: Obama’s budget reaches primary balance in 2018. This means that federal spending is in balance, and the only source of the deficit going forward is interest payments on the national debt. At that point, the debt-to-GDP ratio is stable. That’s a big milestone.

The truth is that it’s not really that hard to reach long-term balance. If we simply sit back and do nothing, the budget would basically be balanced by 2015. Even if we just allow the Bush tax cuts to expire — all the Bush tax cuts — it would be a huge step forward. Since the economy will probably still be a bit fragile by the end of the year, my preference would be to phase them out over the course of, say, three years. Combine that with spending cuts that Democrats and Republicans have mostly agreed to already and we’d be nearly the whole way there. All that’s left then is reining in rising healthcare costs.

But then, that’s really all that’s ever been left. When it comes to the federal budget, it’s all healthcare, baby. It always has been.

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We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

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