Budget Analysis: Deficit reduction

President Obama’s budget proposal for the upcoming fiscal year (FY13) hit Capitol Hill this week, hot off the presses. Senator Coons reviewed the blueprint and praised it for responsibly reducing our country’s dangerous deficits while still investing in America’s long-term competitiveness.

After digesting the budget proposal’s many charts and numbers, our team has identified a few key highlights for Delaware, starting with responsible deficit reduction.

President Obama’s budget plan would save more than $4 trillion over 10 years, stabilizing public debt at 76.5% of GDP by 2022, with deficits declining to an average of 3% of GDP per year. 

This blueprint reduces the deficit in four primary ways:

• Winding down the wars in Iraq and Afghanistan. Nearly $850 billion is saved in the Overseas Contingency Operations accounts, which primarily relates to war funding.
• Returning to Clinton-era tax levels on the wealthiest Americans.  Some $206 billion is saved by ending the George W. Bush-era tax cuts for families making over $250,000 a year.
• Reforming entitlement programs. The budget includes close to $600 billion in savings on health and other mandatory spending programs.
• Staying within Congressional budget limits. The President continues the savings plan established by Congress in the Budget Control Act, passed last year, which saves over $1 trillion through caps on discretionary spending.