The deficit hawk Peter G. Peterson Foundation, created to tackle budget issues in 2008 by Nixon-administration Commerce Secretary and investment banking billionare Peter G. Peterson, enlisted six think-tanks to come up with their solutions to the budget deficit. The Peterson Foundation funded think-tanks from the right-wing (Heritage Foundation and center-right American Enterprise Institute) to the centrist (Bipartisan Policy Center) to the left-wing (center-left Center for American Progress and Roosevelt Institution and the left-wing Economic Policy Institute) to solve a deficit projected to be severe in coming decades. Currently the Congressional Budget Office predicts that in 2035 the US government will spend about 35% of GDP and take in about 19% of GDP as revenue, and those numbers are based on the optimistic assumptions that all of the Bush tax cuts expire and that health-care cost growth slows. The six plans rectify that gap in different ways. Proposals suggest a nearly balanced budget spending anywhere from 18% of GDP under the Heritage Foundation plan to 28% of GDP under the Economic Policy Institute plan. The Wall Street Journal points out that the six plans -- which mimic plans presented by politicians (the Heritage Institution speaks for Paul Ryan, the Center for American Progress for Barack Obama and the Bipartisan Policy Center for the Simpson-Bowes Deficit Commission) -- struggle to find the common ground that Peter Peterson may have wished for. It is difficult to imagine conservatives agreeing to the tax increases proposed by the left or liberals to the spending cuts proposed by the right.
In addition to differences on total levels of spending, the think-tanks differ in their evaluation of the appropriate distribution of federal spending and federal taxation. On taxes, all of the groups want to close tax expenditures: loopholes whereby the government subsidizes through tax-breaks something they might similarly subsidize through direct spending. Four of the six -- including the right-leaning American Enterprise Institute -- want to institute a carbon tax, raising revenue while simultaneously tackling the problem of global climate change. All agree something must be done to control the cost of healthcare. But the agreements end there. In general left-wing groups would raise corporate taxes and taxes on high-income individuals while right-wing groups would not. On the spending side, right-wing groups squeeze spending cuts out of domestic programs while left-wing groups prefer to cut military spending.
Read the full reports for a more detailed breakdown of the numbers here.
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Read the full reports for a more detailed breakdown of the numbers here.
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