Lifting the Crushing Burden of Debt
The Path to Prosperity’s major proposals to balance the budget and pay off the debt.
Bring deficits below $1 trillion immediately, ending the era of trillion-dollar deficits.
Reduce deficits by $4.4 trillion compared to the President’s budget over the next decade.
Surpass the President’s low benchmark of sustainability – which his own budget fails to meet – by reaching primary balance (revenues = spending – interest payments) in 2015.
Put the budget on the path to balance and pay off the debt.
Q: Why doesn’t this budget balance sooner?
A: The Path to Prosperity balances the budget and pays off the debt in the long run according to the non-partisan Congressional Budget Office (CBO). While our nation’s deficit crisis was not created overnight, Democrats in Washington have slammed on the spending accelerator and made our deficit problem drastically worse.
This budget reduces this year’s record deficit of $1.6 trillion by over a third in the first year alone, meaning next year’s deficit will be under $1 trillion. It reduces the deficit by $4.4 trillion relative to the President’s budget over the next 10 years. We meet his benchmark to reach primary balance (deficits excluding net interest), which, according to CBO, the President’s budget never achieves.
This budget respects the principle that government should reorient its unsustainable policies without requiring people to reorganize their lives. This budget makes no changes for Americans 55 and older, while saving health and retirement programs for future generations.
Q: I heard that this budget actually increases deficits and debt. Is this true?
A: No. The people who are making that claim are comparing The Path to Prosperity to a false reality. This false reality assumes that the President and a majority of members of Congress will, contrary to their stated policy preferences, allow a $4 trillion tax hike to hit the American people after 2012. It assumes that the government will allow the poorly designed Alternative Minimum Tax ensnare a growing number of middle-class families. And it assumes that the government will slash payments to doctors who treat Medicare patients by over 20 percent.
We reject massive tax hikes on job creators and sharp Medicare cuts on current seniors. That is why CBO uses a more realistic current-policy baseline to measure budget proposals against the most likely fiscal trajectory.
According to CBO’s current-policy baseline, debt as a share of the economy grows to 90 percent at the end of this decade, which many economists agree is the tipping point for a fiscal crisis.
Under The Path to Prosperity, debt as a share of the economy never grows above 70 percent.
Under the current-policy baseline, debt continues to grow, reaching an astonishing 344 percent of the economy by 2050.
Under The Path to Prosperity, debt as a share of the economy plummets to 10 percent of the economy by 2050.
The President’s budget continues to add to the debt and proposes no reforms that get the budget to balance or pay off the debt. By clinging to the unsustainable status quo, the President’s budget commits our nation to a debt-fueled economic crisis. According to CBO, The Path to Prosperity balances the budget and pays off the debt in the long run.
 Congressional Budget Office. Long-Term Analysis of a Budget Proposal by Chairman Ryan.