page_title: Deficit reduction in the United States
section_title: Fiscal reform commission
hierarchical_section_title: Deficit reduction in the United States / Specific deficit reduction proposals / Fiscal reform commission
caption_attribution_description: English: Projections by National Commission on Fiscal Responsibility and Reform Understanding the Chart The chart is from page 10 of the final report of the National Commission on Fiscal Responsibility and Reform, which was issued in December 2010. The following is the chart caption in the report: "The Extended-Baseline Scenario generally assumes continuation of current law. The Alternative Fiscal Scenario incorporates several changes to current law considered likely to happen, including the renewal of the 2001/2003 tax cuts on income below $250,000 per year, continued Alternative Minimum Tax (AMT) patches, the continuation of the estate tax at 2009 levels, and continued Medicare “Doc Fixes.” The Alternative Fiscal Scenario also assumes discretionary spending grows with Gross Domestic Product (GDP) rather than to inflation over the next decade, that revenue does not increase as a percent of GDP after 2020, and that certain cost-reducing measures in the health reform legislation are unsuccessful in slowing cost growth after 2020."[1] These scenarios are discussed in further detail in the Commissions Report and the CBO's periodic Long Term Budget Outlook reports. Bear in mind also that this chart represents the public debt, which excludes the intragovernmental debt.
context_page_description: Deficit reduction in the United States refers to taxation, spending, and economic policy debates and proposals designed to reduce the Federal budget deficit. Government agencies including the Government Accountability Office, Congressional Budget Office, the Office of Management and Budget, and the U.S. Treasury Department have reported that the federal government is facing a series of important long-run financing challenges, mainly driven by an aging population, rising healthcare costs per person, and rising interest payments on the national debt.
  CBO reported in July 2014 that the continuation of present tax and spending policies for the long-run results in a budget trajectory that causes debt to grow faster than GDP, which is "unsustainable." Further, CBO reported that high levels of debt relative to GDP may pose significant risks to economic growth and the ability of lawmakers to respond to crises. These risks can be addressed by higher taxes, reduced spending, or combination of both.
  The U.S. reported budget surpluses in only four years between 1970-2020, during fiscal years 1998-2001, the last four years budgeted by President Bill Clinton.
context_section_description: President Obama established a budget reform commission, the National Commission on Fiscal Responsibility and Reform, during February, 2010. The Commission "shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers." Unfortunately the Commission was unable to garner the required supermajority of its members in support of its proposals, and disbanded without issuing an official report to Congress. The final, failed draft report, which received 11 of the required 14 votes for approval, was released to the public in December 2010.
  The Commission released a draft of its proposals on November 10, 2010. It included various tax and spend adjustments to bring long-run government tax revenue and spending into line at approximately 21% of GDP. For fiscal year 2009, tax revenues were approximately 15% of GDP and spending was 24% of GDP. The Co-chairs summary of the plan states that it:
  Achieves nearly $4 trillion in deficit reduction through 2020 via 50+ specific ways to cut outdated programs and strengthen competitiveness by making Washington cut and invest, not borrow and spend.
  Reduces the deficit to 2.2% of GDP by 2015, exceeding President’s goal of primary balance (about 3% of GDP).
  Reduces tax rates, abolishes the alternative minimum tax, and cuts backdoor spending (e.g., mortgage interest deductions) in the tax code.
  Stabilizes debt by 2014 and reduces debt to 60% of GDP by 2024 and 40% by 2037.
  Ensures lasting Social Security solvency, prevents projected 22% cuts in 2037, reduces elderly poverty, and distributes burden fairly.
  The Center on Budget and Policy Priorities evaluated the draft plan, praising that it "puts everything on the table" but criticizing that it "lacks an appropriate balance between program cuts and revenue increases."
caption: Report of the National Commission on Fiscal Responsibility and Reform – Public Debt as % GDP Under Various Scenarios
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