The Big Questions: Deficit Reduction


Mark Halperin’s answers in this week of TIME.

“Is Washington serious about deficit reduction?”

Yes. President Obama truly believes that stemming the flow of red ink is good policy and good politics, and he wants to strike a deal with Republicans. Many congressional GOPers want deficit reduction too, especially Tea-infused members who made cutting government the centerpiece of their campaigns. Other than job creation, no issue is more pressing, and little can get done on domestic policy until the deficit monster is tamed.

“Then why are the two parties playing chicken?”

Leaders on both sides know that real deficit reduction will mean cuts in Social Security, Medicare, Medicaid and the Pentagon. Honest Republicans understand that tax increases will also be required (but they can’t say so out loud). Democrats worry that Medicare and Medicaid reductions could involve revisions in their brand-new health care law (but they can’t acknowledge that as they fend off conservative repeal efforts). Any agreement that can pass Congress will require each side to speak hard truths. But nobody wants to cry uncle first.

“What is the most likely path to a megadeal?”
Despite a timid start to this year’s budget process, strategists on both sides predict that months of quiet consultation by the White House with the GOP, business leaders and moderate Democrats will produce a historic compromise with the Republican Senate leader, Mitch McConnell. Then the unlikely team of Barack and Mitch will sell the deal to the Hill — with enough Social Security and health care cuts to make many liberals balk and enough revenue increases (maybe a gas-tax hike) to get conservatives grousing. But if the center holds because of the sheer too-big-to-fail size of the deal — voila.

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