The presidentâs reasoning is that the series of 11th hour agreements he has struck with Republicans over the last two years â to prevent a government shutdown, raise the debt ceiling and avoid the fiscal cliff â have resulted in enough deficit reduction to get the debt under control.
âI think whatâs important to recognize is that weâve already cut $2.5- $2.7 trillion out of the deficit,â he told Stephanopoulos. âIf the sequester stays in, youâve got over $3.5 trillion of deficit reduction already.â
By that accounting, we have already achieved nearly all the $4 trillion the Bowles-Simpson debt commission called for back in 2010 â mission (almost) accomplished.
But there are two problems with that accounting:
First, the Congressional Budget Office projects a deficit of $845 billion â thatâs lower than the $1 trillion-plus deficits weâve seen over the past four years and, as a percentage of the total economy, half the annual deficit of 2009. But, CBO also warns that the deficit is projected to continue rising once again after 2015, adding a total of $7 trillion to the national debt over the next 10 years.
Second, Erskine Bowles and Alan Simpson are now saying we are nowhere near accomplishing the amount of deficit reduction needed to put the government on sustainable path.
âThey havenât done any of the tough stuff, any of the important stuff,â Bowles told me last month. âThey havenât reformed the tax codeâ¦they havenât done anything to slow the rate of health care, to the rate of growth of the economy, they havenât made Social Security sustainably solvent. Thereâs about $2.4 trillion more of hard work weâve gotta do.â
Allan Simpson went further, calling the failure to control entitlement spending âmadness.â
âTen thousand [Americans] a day are turning 65,â Simpson told me. âThis is madness. And life expectancy is 78.1, and in five years will be 80. Who is kidding who? This will eat a hole through America.â
