President Obama and Mitt Romney have very different ideas
on reducing the U.S. budget deficit, but experts have doubts that
either plan is up to the challenge.
Four years ago, Barack Obama campaigned for president on a promise to cut annual U.S. budget deficits in half by the end of his term. Then came financial calamity, $1.4 trillion in stimulus measures and a maddeningly slow economic recovery.
Now, despite small annual improvements, the deficit for the fiscal year that ends on Sunday will surpass $1 trillion for the fourth straight time. Against that headline-grabbing figure, Mr. Obama's explanation -- that the deficit he inherited is actually on a path to be cut in half just a year later than he promised, measured as a percentage of the economy's total output -- risks sounding professorial at best.
The fiscal imbalance on Mr. Obama's watch, however much a result of economic and demographic factors beyond his control as well as his own policy choices, has increased the accumulated U.S. debt about 40 percent and has saddled him with one of his biggest vulnerabilities. Facing off against Mitt Romney, Mr. Obama is on the defensive over deficits and debt nearly as much as he is over unemployment.
Dealing with deficits is the one major issue in which voters in polls regularly register more confidence in Mr. Romney than in Mr. Obama. It is also a flash point in the partisan war over the size and scope of government.
Mr. Romney and his running mate, Representative Paul D. Ryan, the chairman of the House Budget Committee, often campaign with digital debt clocks ticking off the rising liabilities. Their television advertisements highlight the issue; one appeals to women about the debt burden being left to their children.
Mr. Romney and Mr. Obama say fixing the nation's finances is a priority. But they approach it in very different ways.
Mr. Romney is proposing to reduce the deficit and encourage economic growth by substantially shrinking the government -- unrealistically so, in the judgment of many budget experts -- while further cutting taxes and increasing spending on the military. He would inject more private-sector competition into Medicare to rein in the quickly growing costs of health insurance for older people and would limit Medicaid payments to fixed amounts to the states.
Mr. Obama wants to combine spending cuts and tax increases on upper-income households to close the fiscal hole without fundamentally reducing the role of government or altering its guarantees at the heart of Medicare, Medicaid and Social Security. These three account for 40 percent of U.S. spending, and they will grow to half in a decade as more baby boomers claim benefits.
Mr. Romney has not put a figure on his deficit reduction target and has not fleshed out many of the details necessary to evaluate the long-term effects of his plan, but he says he would balance the annual budget in 8 to 10 years. Mr. Obama's most recent budget proposal called for $5.3 trillion in deficit reduction over the next decade.
But long-term projections are notoriously unreliable. And in any case, budget analysts say that if the nation's goal -- at a moment when the economy is still shaky -- is to start moving seriously toward fiscal balance, neither approach is likely to prove equal to the problem.
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