Obama and Romney Could Solve Our Long-Run Government Financing Problems with a Single Press Conference Today
They meet. They announce that each of them pledges to veto any bill that increases the projected national debt over the ten years after its enactment. They announce that they will each work as hard as they can to make sure that whatever candidates their parties nominate for president in the future will make the same pledge--and that they will campaign and vote against any candidate who doesn't.
Then they each lay out the PAYGO-conforming legislation that they wish Congress would pass in order to make the "Congress does nothing" plan less painful.
The do-nothing plan: now worth $7.1 trillion: James Horney of the Center on Budget and Policy Priorities… says the do-nothing plan would now lead to $7.1 trillion in deficit reduction — more than even the Fiscal Commission envisioned. Here’s how it breaks down:
$3.3 trillion from letting temporary income and estate tax cuts enacted in 2001, 2003, 2009, and 2010 expire on schedule at the end of 2012 (presuming Congress also lets relief from the Alternative Minimum Tax expire, as noted below);
$0.8 trillion from allowing other temporary tax cuts (the “extenders” that Congress has regularly extended on a “temporary” basis) expire on schedule;
$0.3 trillion from letting cuts in Medicare physician reimbursements scheduled under current law (required under the Medicare Sustainable Growth Rate formula enacted in 1997, but which have been postponed since 2003) take effect;
$0.7 trillion from letting the temporary increase in the exemption amount under the Alternative Minimum Tax expire, thereby returning the exemption to the level in effect in 2001;
$1.2 trillion from letting the sequestration of spending required if the Joint Committee does not produce $1.2 trillion in deficit reduction take effect; and
$0.9 trillion in lower interest payments on the debt as a result of the deficit reduction achieved from not extending these current policies….
[A]ll we need to do to solve our deficit problem — or, more accurately, avoid creating one — is to enforce PAYGO rules in Congress.