Jared Bernstein: Obama’s Budget the ‘Holy Grail of Deficit Reduction’

October 2, 2012 - 6:35 PM

bernstein

Jared Bernstein, former chief economist and economic adviser to Vice President Joe Biden. (AP)

(CNSNews.com) - Jared Bernstein, former chief economist and economic adviser to Vice President Joe Biden, said Tuesday that President Barack Obama’s 2013 budget was “the Holy Grail of deficit reduction.”

“Here I think I have some good news,” Bernstein said at an event at George Washington University with former Sen. Alan Simpson (R-Wyo.) about the U.S. economy and fiscal problems.  “If you actually look at the budget that the president submitted in 2013, which takes a lot from Bowles-Simpson, maybe not enough for Simpson himself and we can hear about that.  But it takes a lot from Bowles-Simpson.”

“That budget has considerable Medicare -- and Medicaid -- but Medicare savings in it,” said Bernstein.  “And it crosses a kind of Rubicon for Democrats. It actually cuts hundreds of billions from Medicare.  So, there are a lot of Democrats who that takes them way out of their comfort zone.”

“And third, this budget actually achieves kind of the Holy Grail of deficit reduction by having the debt stop growing faster than the economy,” Bernstein said.  “The debt to GDP ratio actually flattens.”

“So, this is a budget that has gotten far too little attention, takes a lot from Bowles-Simpson and in the 10-year budget window with significant cuts to the Medicare program,” he said.  “Cuts, by the way, that Republicans want to put back in, actually that achieves budget sustainability.”

In response, Sen. Simpson said, “The president’s budget, remember the vote on that baby?”

“The president’s budget got zero votes,” Simpson said.  “Zero.”

“It’s a little more complicated than that,” Bernstein said.

“Any budget would have gotten the same result -- they haven’t had a budget over there for five years,” Simpson added.

Bernstein and Simpson both appeared at the event entitled “Election 2012 and America's Fiscal Cliff,” which was sponsored by the George Washington University project "Face the Facts USA."