Elizabeth Warren's will actually cut the deficit?

Good morning Syria. Boom celebrating fifty years are Rolling Stones and -- yeah fifty years ago today they played their first concert. Not first not their first American concert -- -- that took place a few years later. Correct in now on June 2 action and it is in Massachusetts in a little embarrassed concert first concert in the United States in the Lynn Massachusetts is -- at the -- bullets and no longer there the Manning -- -- and they preserving. For the skull. Is the democratic controlled city -- news. Was destroyed after that's. -- -- clintons were you there -- no I was talking. But that's airlines this moral zone's first concert United States is -- Lynn Massachusetts and demanding. I think Philly tonight show tonight. The problem. -- joining us now is just -- he's a senior. Policy analyst at the committee for a responsible federal government he's here because he was quoted yesterday in a story. On Elizabeth Warren and Scott browns -- respective. Deficit cutting plans. And we wanted to get some analysis now I have to say right off. Obviously Elizabeth Warren's is the more effective one at cutting the deficit on paper because he calls for higher taxes. Anybody can cut the deficit with a higher taxes the challenges how he cuts spending. And get to the deficit boy liar and all that out with Jeff congratulations Jeff for being here on WRKO thank you for doing. So give us your take on these two plans first of all what perspective for you you obviously don't have my perspective you you don't. You don't penalize her for doing it with raising taxes right. We're we're just trying to numbers. So no we don't -- but we present and we try to be transparent. We are the committee first possible federal budget so we. Who we look at everything in our our mission is to help bring transparency to the whole process. Your mission about a responsible federal budget you want does that mean a balanced federal budget. It means -- what it means these days is stabilizing. The federal debt. Which means getting it to a level. Where it will not grow and hopefully we'll shrink from its current historically behind them. So you're agnostic on whether that's on with a budget cuts or tax increases. As an institution and yes and I've personally also yes OK we have always we have board members from both are retired congressmen from both parties. Okay what is so what's your take on the plans and put them in context for us. -- -- Both of them I would cut deficits from what we've what our projection as to where they would go following that is most or all of the current policies stay in place that's not. Then that would be safe -- -- attack that today's tax rates for continued entirely and and most other policies stay in place the war draw down both of them. Take steps that. Would reduce deficits from that trajectory. Which is is not true necessarily every politician. So they're both. Headed in a deficit cutting away. They do it very differently of course as you mentioned Elizabeth Warren does it more through. Letting some of the tax cuts expire so revenue increases. And this senator brown does it almost entirely through spending cuts. ND LE I know you said I mean I ask you write off or you're not -- on the taxes or or or at the cutting but. There is this truism that kids who repeated by certain people in Washington the so called responsible ones. Who say there's no way to balance the budget and no way to cut our deficit -- higher taxes do you folks have an opinion on that. Odd week when we run the numbers and we have a simulator on our website CR FB dot org. That allows users to do the same thing when you look at the numbers and how big the deficit are today and they are getting bigger bigger in the future. There is almost no way to do it without some combination of spending cuts. And revenue increases that combines. And the big spending cuts some of the biggest ones and eventually will either have to come from more makeup for projected Medicare spending increases. The Simpson -- plan which was a bipartisan plan. That has that loaded in the past but it was city got a majority vote on this bipartisan commission. Included about a ratio about who we. Times as many spending cuts as a revenue increases. Right now we have a deficit of how much is it fifteen trillion. A bit of debt that I'm sorry is it fifteen. It's it's fifteen trillion if you include the Social Security trust unless you include how much money the government owes -- itself if you include. The money that is it an actual bond that have been sold to the public institutions. Foreigners around that number is getting close to eleven trillion dollars. Which we also think about in terms of as a percent of GDP right now it's about 71%. So you really want me with the bonds we've sold guns to people. And it is that's an obligation then we have right why would that make the number go down rather than go up. Because we have not sold fifteen trillion dollars worth of bonds to people that and it is it that that is they perfectly fine we're looking at and I'm just the we usually deal on the lower number I'm not -- and higher numbers on just trying to. Do you apples to apples for the analysis that was in the globe yesterday and -- but that. The fifteen trillion includes. Bond -- the Social Security trust fund holds from other parts of the government. Okay so you're never gonna this -- I'm on -- list -- have a conversation for a moment about the fifteen trillion. We're currently running a deficit of about one point 31 point four trillion dollars. Right. I -- this year. A little bit lower but it's still over a trillion dollars that's right. So where would we need to move then number two instead of squandering. Over a trillion dollars this year of China's money what -- we have to do to win a reasonable amount of time. Bring the death down to a reasonable amount lord -- say zero so we've got fifteen trillion we need to get off the blocks. What do you guys think we have to do in terms of putting money into that bank account to pay it down per year. A major thing -- to get out of recession so right now even with the tax rates basically unchanged and for the most part. Over ten year period. Tax revenues are still way down and this is still this year as a result of the recession people out of work corporations making less money. When people make less money there's less taxable income so there's less tax revenue which is -- so it's not going to function -- tax -- so we still have that problem that's a major part of the deficit right there. So you're saying to ignore that did the death. Until we get out of recession. No it's not so that the annual deficits deeds. The debt on an annual basis or has the potential to know I'm not all saying -- the -- -- recessions. I think part of the way to get out of good it's a lower deficits is to get out of the recession however you do that and there are I'm I'm the dumb a taking up a position about who -- has plans. Wearing a give you brought that up and answered the question how much do we have to do bring down our spending per year are aware yeah I mean do you think we have to pay down a half trillion dollars a year earlier we you know what's your. What's a responsible you guys are the committee for a responsible federal budget given that we had a fifteen trillion dollar deficit and we're now overspending. By over a trillion dollars a year what what makes are responsible in your eyes. Did not respond know what what change would make irresponsible budget where we have to go to. We have to get this so -- -- the annual deficit which is today over a trillion dollars we have to get it down. To at least close to zero if you can stay above zero and still shrink the debt as a ticket to GDP grows faster than a deficit. That is sustainable balance would be even better. We have to caught a lot of spending some of that happening as it as a result of the debt deal from last summer. That's what's displayed his start in January 23 two young. Just look at it for target number from you so you're happy if we just aren't occurring more -- Because you're saying will naturally start going down in our -- even if were breaking even on art our annual budget. -- target of -- others zero deficit would be great. If if are spending met revenue that would be. Okay so if we award overspending starting next year were weren't overspending how long would it take for us to pay down our fifteen trillion dollar deficit. 20. Yes. Out of left a good question and we have not run the numbers that are that many decades and other warriors. In other words being its heroes -- really tackle the debt. If we are balanced budget doesn't tackle that we need to have a surplus budget. Well actually if we balanced the budget. Then. We are at least paying off. Interest where we're we're keeping it right he will not pay down the debt. If we balanced the budget. By definition if it's a pretty perfect balance of the of the number on the debt will stay the same however GDP will grow and the -- does share of the debt as a share our economy. Well decrease over time -- do better than the opposite it's not as good as running down the -- Are your kind of accepting that things are in a tragic situation in -- we can't get to anywhere but better. But I've -- -- my goal is to see us be responsible. Society. And maybe we can't start doing it for two or three or five years until we've. You know started to turn the corner on the on the recession. But it seems to me we need to be is in a surplus situation where tax revenues. Are exceeding spending. And that only by doing now by several hundred billion dollars a year or start to get anywhere and fifteen trillion dollars worth of debt. That they would hit that would help it it. We have to get there are one step at a time whether it's small steps or big steps. I'm just try and I don't what are responsible target is. Not being you know -- for from from you guys in it seems like sure I mean I understand you're dealing with political realities so you're saying okay let's surge is try to get a balanced budget. And then we won't be making the tragedy worse. I want sorry I wanna start slowing down the rate at which the car is heading towards a cliff. You know right. So politically. So here's the -- what does so what's a reasonable number of our our problem number before before the recession since about 1970 the average. And the average annual debt. And -- half of the United States has his share of GDP because of inflation that's why we try to do but it could do that bad apples -- apples. Was less than 40% it was about 3638%. Right now it's about 71% and that's the lower figure the eleven trillion -- and I just I'm I'm only using that. Again to compare apples apples for fifteen train is also good way to look at so right now we're 71% so. What too good target well at least try to get back down today averaged. But even right now to get this even back down a 60% will be very hard but that is -- seems to be maybe that tipping point. For putting up and a long term sustainable situation the baby boomers are starting to retire yes Social Security is gonna cash flow deficit now. Which is a few years earlier than had been projected until a recession came. Medicare and huge cash flow deficit. And that is both of these. Big entitlement spending programs are going to consume. Almost all federal revenue. Starting about ten or fifteen years from now and the interest in the interest bill is going to get huge and so. We have to do some things to turn that it's turned back that trend. And we know we're at 71%. Plated a go higher. 60% seems to be where do the intermediate target for forgetting it down of that but at this so the system bold plan. Which is big which deals in trillions of dollars over ten year period. A mayor may not get it down to sixty doesn't seem like it would get a lower than sixty and and and that's already asking a lot of congress' so at least. So far Arianna I wanna -- I wanna deal with reality now with congress congress is obviously I -- not gonna do any of this stuff. But a good V in the you know what's gonna hit the fans soon. And are the whole thing's gonna explode so at some point one -- we you know when the cars just getting ready to fly over the cliff. And the panic alarm will be sounded and we'll start doing things. And I'm just curious who you know what those things should be in your mind and -- in European more reasonable and I thought you're going to be which is kind of a disappointment. I'd like -- and there are little more radical just thank you thank you three times senior policy they don't ask me that the committee for a responsible for a -- responsible federal budget. It's -- DC how bad things are though. Things are so bad that even the guys -- out there are sounding the alarm. Are saying if only we could make it a little less worse than it is that would be cause for celebration because it's it's basically hopeless. The idea of us being able to cut spending we have to cut spending. And one of our political parties may be both are so devoted overspending that that appears to be. An impossibility. And certainly raising taxes can't be done right now so that leaves only one thing doesn't.