See our methodology below for more information about the calculations. In other words, lawmakers have largely failed to address the nation's most pressing fiscal challenge: the large and growing cost of Social Security, Medicare, and Medicaid. And while the enacted deficit reduction has improved the nation's fiscal outlook somewhat, it cut much sooner than when the Fiscal Commission — which put forward the principle of "don't disrupt the fragile recovery" — recommended.
The front-loaded nature of actual deficit reduction can also been seen by looking at actual deficit levels — though they have been influenced as much by changes in projections as legislation. Today's deficits as a share of Gross Domestic Product GDP are almost identical to the levels proposed by the Fiscal Commission, and indeed current law has tracked Simpson-Bowles relatively well since But after , current law deficits are slated to rise — whereas under the Simpson-Bowles plan they would fall.
In , deficits were projected to total only 0. This divergence is similarly evident when looking at debt, though due to poorer economic performance and more near-term tax cuts debt is already significantly higher than what Simpson-Bowles proposed.
By contrast, debt is currently about 74 percent of GDP and is projected to rise to 77 percent of GDP by — or 80 percent if the extenders package passes. It quickly earned mixed reviews. The Campaign to Fix the Debt praised the framework for addressing major issues such as entitlement programs and tax reform, although it did not specifically endorse the plan.
It calls for using so-called tax expenditures to help pay down the U. It does not get specific, however, and tax expenditures include politically popular items like the tax break for mortgage interest and charitable giving.
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