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Plans for Debt/Deficit Reduction

With conflicting ideological arguments and new proposals for debt reduction surfacing regularly, it’s hard to know where to begin to really understand these issues. Several individuals and committees have released proposals with ideas for achieving long-term deficit reduction.

Bipartisan Commission for Fiscal Responsibility and Reform’s “Moment of Truth” Plan
President Obama formed a Fiscal Commission to produce a series of recommendations for debt reduction. If the plan receives approval from 14 or more Commission members, these recommendations will be presented to Congress. In this report, Commission members challenge our political system and the American people to confront the difficult trade-offs required to address our nation’s long-term deficits. Debt-reduction suggestions include cuts to discretionary spending, tax reforms including broadening bases and cutting rates, measures to curb rising health care costs, and reforms to Social Security.

Bipartisan Policy Center’s debt reduction plan
A bipartisan task force chaired by former Senate Budget Committee Chairman Pete Domenici and former White House Budget Director Alice Rivlin released this plan on November 17, 2010. Pete Domenici and Alice Rivlin both contributed to creating introductory materials for Our Budget, Our Economy, and Rivlin was present at the meeting in Philadelphia. The task force also includes three members of the Our Budget, Our Economy National Advisory Committee and one budget expert from the Philadelphia site.

Our Fiscal Security’s “Investing in America’s Economy”
Demos and the Century Foundation teamed up to create a budget blueprint that suggests debt-reduction measures to generate new jobs, invest in key areas, modernize and restore revenue base, and increase health care cost efficiency.

Peterson-Pew Commission on Budget Reform’s “Back in the Black”
This commission recommends reforms to the government’s budgeting process that will stabilize the debt at 60% of Gross Domestic Product (GDP) and lead to more transparent, responsible budgeting in the future. Currently, the short-term thinking in the federal budgeting process leads to long-term fiscal problems. To make the budgeting process more far-sighted, disciplined, and transparent, members of the Peterson-Pew Commission suggest a Sustainable Debt Act and increased levels of oversight. For example, under the Commission’s recommended policy changes, the President would report to Congress at the end of each year with an update about the budget’s effects and progress towards fiscal goals.