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.
