President Obama’s debt reduction goals are at least $1 trillion too modest, according to the Democrat who chaired the Senate Budget Committee until the end of last year.
“To get us on a path that is declining in terms of debt as a share of gross domestic product requires a package of about $5 trillion total,” former Sen. Kent Conrad, D-N.D., told reporters during a Fix the Debt press briefing today at the National Press Club. “If you look at [the Congressional Budget Office's] most recent numbers, that’s about the size of the package that we need, somewhere in about the $5 trillion range, to get this debt going down as a share of the economy. And we’re still going to have debt, at the end of this period, publicly held debt of 70 percent of GDP. That’s 100 percent of GDP as gross debt.”
President Obama is only shooting for $4 trillion in debt reduction. “Over the last few years, Democrats and Republicans have come together and cut our deficit by more than $2.5 trillion through a balanced mix of spending cuts and higher tax rates for the wealthiest Americans,” he said during his weekly address on Saturday. “That’s more than halfway towards the $4 trillion in deficit reduction that economists and elected officials from both parties say we need to stabilize our debt.”
Those numbers have gone stale, Conrad says, because of the ongoing weakness of the economy over the last two years of Obama’s first term and some unexpected spending.
“The goal posts have moved somewhat,” Conrad explained. “When we were doing Bowles-Simpson, the general thinking was that you needed $4 trillion, but, remember, a lot of things have happened since then, right? The Budget Control Act has happened, the sequester has been put in place, we’ve had some revenue. But we’ve also had other changes that have been made in terms of the underlying estimates of the strength of the economy — what kind of revenue it’s throwing up and what kind of expenditures the federal government is experiencing.”
He cited the Sandy relief bill as one of the unexpected spending increases.