Analysis: As deficit talk gets more serious, plans’ effects are harder to forecast

By Neil Irwin,
WashPost
Wednesday, April 13

For most of the past two years, the debate over fiscal policy has skirted the real questions, focusing on small-bore flash points rather than fundamental questions about taxing and spending that will shape the nation’s future.

But with President Obama’s deficit reduction proposal Wednesday and Rep. Paul Ryan’s last week, now the big stuff is on the table.

No longer is the debate about earmarks, as it was during the 2008 election — the sometimes-wasteful projects that lawmakers add to spending bills together account for one-20th of 1 percent of federal spending. It’s not about funding for National Public Radio, a major target of conservatives that receives an even smaller chunk of federal funding. Just last week, the government nearly shut down over how much to spend for the remainder of a fiscal year that ends in six months. The much-heralded compromise cuts about 1 percent of spending.

But now, after the release of plans from the White House and the House Budget Committee’s Republican chairman, the issues on the table are increasingly the ones that really matter for the nation’s economic and fiscal future: Medicare and Medicaid, the health programs that are the biggest drivers of the nation’s long-term funding shortfall; the George W. Bush-era tax cuts, which would increase the deficit by 55 percent over the coming decade if extended in their entirety; and military spending, which has been largely protected from previous efforts at deficit reduction.

(More here.)