http://diaryofarepublicanhater.blogspot.com/2013/02/why-gop-might-accept-new-revenue.html
it should be bore in mind that the impetus for a GB is diminishing every day. This hasn't been recognized by the Very Serious People. Alan Blinder, however, points out that much headway has been made and yet the discussions seem to suggest nothings yet been achieved. For one thing. we've already done a lot of "bargaining." The goal of the GB was $4 trillion. Currently we've already agreed to $2.6 trillion dollars in deficit reduction.
"Let's stack these recent developments up against the goal set in the summer of 2011: to chop about $4 trillion off the deficits projected for the next 10 years."
"While the grand bargain talks dissolved in acrimony, they did produce the Budget Control Act of 2011. That law created land mines like the fiscal cliff, but it also cut spending by over $1.9 trillion once you include the associated interest savings, as you should. (Here and elsewhere, I use the 10-year budget window 2014-2023 and recent estimates from the widely respected Center on Budget and Policy Priorities.) That was all spending cuts, no tax increases."
"Then came the New Year's Day agreement that averted the cliff. The headline number then was about $600 billion in tax increases. But if you add in the spending cuts and the associated decrease in debt service, it came to another $850 billion or so."
"Adding these up, the two budget agreements have taken us more than two-thirds of the way toward the $4 trillion deficit-reduction target. Close enough, in fact, that the sequester, if it happens, will nearly finish the job."
"Now, don't get me wrong. I don't welcome the sequester. Its meat-ax approach chops spending bluntly and indiscriminately. But imagine that our legislators agree instead on a smarter package of spending cuts and revenue raisers that amounts to the same amount of money. After all, it's only about 0.6% of GDP. Then we'll have achieved the $4 trillion target. The Center on Budget and Policy Priorities estimates that doing so would be enough to stabilize the debt-to-GDP ratio at about 73%, which is a sensible goal for now."
"Deficit hawks will object that the original $4 trillion goal applied to fiscal years 2012-2021. When you roll the budget window forward to 2014-2023, substantially larger cuts are needed to keep the debt-to-GDP ratio from rising. That's true. But, during that same period, the CBO's technical and economic re-estimates have made the deficit target substantially easier to reach. If you do the math, the two adjustments come close to cancelling out one another. So a number like $4 trillion remains a reasonable target for policy changes."
http://online.wsj.com/article/SB10001424127887323495104578313982084633620.html?mod=WSJ_hp_mostpop_read
Besides the reductions already agreed to in revenue, there's the sudden sea change with a big drop in medical costs-this has been a big driver of problems.
"Seas change slowly. But the numbers Dr. Emanuel cited are dramatic. Between 1965 (when Medicare was founded) and 1993 (when Bill and Hillary Clinton tried to curb medical costs), health-care spending grew 3.2 percentage points faster than GDP. Since 2004, that gap has been shaved to a mere 0.8 percentage point. And the more recent news is even better. Over the past three years, according to Dr. Emanuel, Medicare costs have actually grown slower than GDP."
"Some of this "cost control" is due to the weak economy: Hard times lead people to postpone or cancel some medical care. But health-care inflation began to fall years before the recession began, which suggests that deeper forces are at work. If we can somehow slow health-care costs to the rate of GDP growth, our long-run budget problem is basically solved. It's far too early to declare victory, but there's reason for hope."
As Blinder notes wryly, sometimes the news is good. However, what would also be very welcome news is that Washington finally recognize this sea change and stop talking as if the world's about to end.
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