By Erik Wasson - 04/21/11 04:32 PM EDT
“While the new framework (hereafter the “President’s Framework”) is a substantial improvement over the President’s February FY 2012 budget request, it still falls short of the total debt reduction proposed by the Fiscal Commission (which we believe should be seen as a minimum to strive for) as well as short of the House budget resolution, which is based on House Budget Committee Chairman Paul Ryan’s (R-Wis.) proposal,” the center writes.
Obama’s framework had used rosy economic assumptions by the Office of Management and Budget (OMB) that pumped up the total deficit reduction.
Using Congressional Budget Office assumptions, rather than OMB, the president’s framework never stabilizes the national debt. The debt would climb to 77 percent of GDP under the re-analyzed plan.
If adopted, the Obama plan would trigger Obama’s proposed debt fail-safe, requiring automatic cuts after 2014 to ensure a declining ratio of debt to Gross Domestic Product.