A tall order: Republican plan to balance budget in 10 years

WASHINGTON Wed Jan 23, 2013 7:47pm EST

Speaker of the House John Boehner takes his oath during the first day of the 113th Congress at the Capitol in Washington January 3, 2013. REUTERS/Kevin Lamarque

Speaker of the House John Boehner takes his oath during the first day of the 113th Congress at the Capitol in Washington January 3, 2013.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - House Speaker John Boehner's promise on Wednesday to balance the federal budget "over the next 10 years" was aimed at convincing Tea Party conservatives in Congress to hold their fire over a bill to temporarily raise the U.S. debt ceiling.

But carrying it out would require spending cuts or revenue increases far greater than anything seriously considered by Congress in recent years, including the budget passed by the Republican-controlled House last March, which envisioned shrinking deficits to $3.13 trillion over 10 years in part by a total revamp of Medicare and Medicaid, the government health insurance programs for seniors and the poor.

That budget resolution, drawn up by House Budget Committee Chairman Paul Ryan, projected a balanced budget not in 10 years, but by 2040.

"It seems politically unrealistic to think you could get to a balanced budget" in a decade, said Robert Bixby, executive director of the Concord Coalition, a non-partisan organization devoted to deficit reduction.

That's particularly true, Bixby said, in view of the Republican vow to avoid further tax increases for deficit reduction.

"I don't see it," said Bixby, adding that "it'll be a very useful exercise to see how" Boehner might do it.

Boehner, speaking after the House passed a bill to allow the federal government to borrow more money until May 19, provided no details on how Republicans would keep the promise, leaving Ryan - the Republican 2012 vice presidential nominee - and his budget committee to work it out in the weeks ahead.

The federal budget was last balanced in 2001, thanks in part to a tax increase, low unemployment and a booming economy. Although taxes on the wealthiest Americans have gone up as the result of a fiscal deal reached in early January, unemployment remains stubbornly high and the U.S. economic recovery is tepid.

The government has been running annual deficits of about $1 trillion for the past four years, according to the Congressional Budget Office, so something dramatic would have to occur to wipe out those imbalances in 10 years.

The government spends about $1.2 trillion on military and domestic programs known as "discretionary" because they can be cut, and about $2.1 trillion on so-called mandatory programs, including Medicare, Medicaid, entitlements which grow automatically according to demand and provider cost.

The 2010 Simpson-Bowles Commission on Fiscal Responsibility projected annual deficits of $279 billion through the year 2020 and that after reforming the tax code and cutting the costs of Social Security, Medicare and Medicaid, among other things.

The last major politician to promise to deliver a balanced budget in 10 years was Republican 2012 presidential nominee Mitt Romney.

(Editing by Paul Simao)

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Comments (6)
mutt3003 wrote:
Reuters your obama is showing……….

Jan 23, 2013 9:28pm EST  --  Report as abuse
SDaignault wrote:
I don’t know whether to laugh or cry after reading this. How ludicrous is the idea that a 10 year plan to balance the budget can’t be taken seriously … because it isn’t possible. We are only at the very beginning of the baby boomers retiring. The baby boom years are considered 1946 – 1964. In 2023, we’ll be just past the mid-point of the baby boomers retiring. People born in 1955 will be turning 68 in 2023. It is utter delusion to even think that entitlement reform is an option. Not only is entitlement reform not an option, but the radical measures that will be required to have a prayer at solvency needed to be put into place long before today.

Jan 23, 2013 10:32pm EST  --  Report as abuse
Mott wrote:
So, you want to think in 10 year term.. how about $5T in interest payments alone (over 10 years) on the debt while the team cannot survive without increasing the debt limit.

Jan 23, 2013 11:42pm EST  --  Report as abuse
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