Gun Barrel City, Texas
March 1, 2023
I thought this report (link below) provided a reasonable explanation of the cuts required to balance the budget.
My understanding is that Republicans are considering cuts of on the order of $150 billion per year. As you can, that's not nearly enough.
I think it is important to understand that there is no agreement among economists as to the optimum amount of national debt and for that matter whether a balanced budget is appropriate for the United States. Some argue that some amount of deficit is reasonable if the deficit is being used to grow the economy. Those who use the example of personal finance (as I have previously) are perhaps too conservative. The great unknown seems to be the correct level of deficit so inflation doesn't become an issue.
I say all that with the caveat that I am by far not an expert in this area. But I have stayed at a Holiday Inn Express in the past.
From that report:
In this analysis, we show that in order to achieve balance within a decade, all spending would need to be cut by roughly one-quarter and that the necessary cuts would grow to 85 percent if defense, veterans, Social Security, and Medicare spending were off the table. These cuts would be so large that it would require the equivalent of ending all nondefense appropriations and eliminating the entire Medicaid program just to get to balance.
Balancing the budget has become increasingly challenging over the past 15 years. Efforts to show balance too often rely on unrealistically aggressive cuts, unspecified savings, rosy economic assumptions, and other budget gimmicks as a result. Successful budget actions in recent years have come mainly from more targeted deficit reduction efforts than from trying to meet overly aggressive fiscal goals.
And with deficits on course to reach $2.4 trillion (6.6 percent of GDP), balancing the budget is now harder than it has ever been.
The exact amount of savings needed for full budget balance is uncertain and will depend both on budget projections in the Congressional Budget Office's forthcoming ten-year baseline as well as the path of any proposed policies. In the recent CRFB Fiscal Blueprint for Reducing Debt and Inflation, we estimated achieving balance would require roughly $14.6 trillion of deficit reduction through 2032, including over $2 trillion of policy savings (and nearly $400 billion of interest savings) in 2032 alone.
To achieve these savings without more revenue, we estimate all spending in 2032 would need to be cut by 26 percent; this figure rises to 33 percent if defense and veterans spending is exempted from the cuts. For a sense of magnitude, applying this cut across the board would mean reducing annual Social Security benefits for a typical new retiree by $10,000 to $13,000 in 2032. It would also mean laying off 1.1 to 1.4 million federal employees (more than two-thirds of the civilian workforce if the military were exempted) and removing 20 to 25 million people from Medicaid eligibility.
Excluding Social Security and Medicare from cuts would make the task of balance even more unrealistic. Without touching spending on defense, veterans, or Social Security, all other spending would need to be cut by 51 percent. Also excluding Medicare would mean that remaining spending would need to ultimately be cut by 85 percent.
What everyone forgets is that every single dime of American capital that goes to cover our annual deficit is taken from moneys that could be in the PRIVATE capital market, what REALLY finances a growing economy.
I suspect there are a number of governmental programs that may not be achieving any measurable result. a good place to start reductions.