If you want to balance the budget without raising taxes or cutting defense, Social Security, and Medicare, you'd probably have to fire nearly every park ranger and cut 70% of anti-poverty spending

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House Minority Leader Kevin McCarthy speaks during a weekly Capitol Hill press conference on May 28, 2020 in Washington, DC.
Speaker of the House Kevin McCarthy.Alex Wong/Getty Images
  • Republicans want to reduce the deficit, and they've suggested a range of areas to cut spending.

  • An analysis from the Committee for a Responsible Budget found balancing the budget would require some massive cuts.

  • That is, if tax increases, defense spending, Social Security, and Medicare remain off the table.

Right now, all eyes are on what Congress wants to spend on — or decide to chip away at.

Republicans want to pare down the deficit, and it's something that Democrats seem to be open to, as well. Treasury Secretary Janet Yellen has said that the upcoming White House budget will have "substantial deficit reduction over the next decade," according to Reuters, and Democrats are willing to discuss cost-cutting measures with Republicans independent of the debt ceiling.

But if the government wants to get serious about its spending, it'll have to make some pretty big cuts, according to the Committee for a Responsible Federal Budget (CRFB). According to a CRFB analysis, all government spending would have to be reduced by 27% to get budgets balanced in the next decade — and, if tax increases, defense spending, Social Security, and Medicare are all off the table, 78% of spending would have to be cut.

That "effectively means you're eliminating almost all of government other than the military and programs specifically for middle class seniors," Marc Goldwein, a senior policy director at CRFB, told Insider. "It's just not realistic."

As the New York Times notes in its visualization of CRFB's analysis, to close the gap between now and 2033 would require $16 trillion in spending cuts — the same size as all of Social Security, or all of Medicare plus every anti-poverty program.

"The thing is the government has basically three gigantic programs and it's the US military, Social Security, and Medicare," Goldwein said. As Nobel-Prize-winning economist Paul Krugman once wrote, the US government is "best thought of as a giant insurance company with an army."

With the military, Social Security, and Medicare off the table for cuts, it means other programs would have to be on the cutting block to balance the books. That means you would have to say goodbye to things like visiting national parks, and accessing food assistance programs, as the New York Times reports.

"The idea we're just going to eliminate all parts of government other than Social Security, Medicare, and defense — it's just not realistic, or desirable," Goldwein said.

Spending cuts are the name of the game in Congress right now. House Republicans have floated a number of areas in which they would support cutting spending in a potential debt ceiling deal to keep the US on top of paying its bills. Rather than agreeing to a clean debt ceiling increase, they are using the opportunity to negotiate with Democrats to achieve their own policy priorities.

For example, Republicans on the House Budget Committee said last month that they are on board with cutting spending for environmental programs and federal student-debt relief plans, and some GOP lawmakers have reportedly been chatting with former President Donald Trump's budget official, who has been pitching his 104-page plan with suggested budget cuts for every federal agency.

The Republican Study Committee also released a blueprint to balance the budget in seven years last year, which included making Trump's tax cuts permanent and ensuring Social Security's solvency by gradually raising the retirement age. An increase in the retirement age would translate into substantial lifetime benefit cuts for future retirees.

While it remains unclear what exactly Republicans are eyeing in a final deal, Speaker of the House Kevin McCarthy has vowed that cuts to Social Security and Medicare are off the table. Still, that hasn't stopped some GOP lawmakers from discussing changes to the programs, like the previously mentioned increase in the retirement age to 70.

Trump, who has frequently urged his party to preserve the two programs, blasted the idea during the Conservative Political Action Conference (CPAC) last week, saying that "we're not going back to people that want to destroy our great Social Security system, even some in our own party."

Goldwein thinks measures like putting caps on appropriations spending, reducing healthcare spending, restoring solvency to major funds, and tax reforms could help.

Biden is expected to unveil his federal budget plan on Thursday in Philadelphia, during which he will "deliver remarks on his plans to invest in America, continue to lower costs for families, protect and strengthen Social Security and Medicare, reduce the deficit, and more," the White House said in a statement.

Meanwhile, Democrats await Republicans' plan to move ahead with a deal to raise the debt ceiling before the US defaults.

"The GOP is divided and unable to unite around a plan to raise the debt ceiling. The hard right demands spending cuts," Senate Majority Leader Chuck Schumer wrote on Twitter. "Will they cut Medicaid? Pell Grants? Food for kids? Speaker McCarthy: It's March 2nd, where is your plan?"

Read the original article on Business Insider