"Without policy changes, we risk significant damage to the long-term health and well-being of our economy," said Pew director Ingrid Schroeder in prepared remarks. "Lawmakers need to know how difficult it would be to solve the problem without following a multi-pronged strategy that includes changes in both spending and revenue."
Assuming the goal is to reach a debt-to-GDP ratio of 60 percent by 2025, getting there through cuts in discretionary spending alone would mean a 43 percent cut to programs by 2015.
A plan involving only entitlements would require a 22 percent cut, reducing the average Social Security benefit from $1,255 per month to $985 per month in 2015.
And a strategy relying solely on tax increases would require a 32 percent increase in individual tax revenue, making the average tax liability go from $4,955 to $6,520.
In contrast, the report finds combining both spending and revenue policies would require an across-the-board tax increase and a spending cut of about 7.5 percent for each in 2015 to achieve the debt-to-GDP ratio of 60 percent by 2025.
The complete report can be found at www.pewtrusts.org.