Balancing the federal budget in 10 years: More gimmick than good policy

The economic case here is even sketchier. First of all, balancing the budget in a decade will be difficult. The recent Congressional Budget forecast — which includes the sequester — places the 2023 deficit at $978 billion, or 3.8% of GDP. How to close that trillion-dollar gap? Discretionary spending in 2023 will be 30% below the average for the past century, which leaves entitlement cuts a better target. But following that path would mean, for instance, changing Medicare benefits for current and near-term recipients, not just for younger Americans. That’s a good idea but one that Republicans have been loathe to embrace. Another option is assuming faster economic growth through tax reform and deregulation, but Democrats and many budget experts would probably cry foul.

Even if Republicans can cook up a reasonable plan to balance the budget in a decade, is that a public policy worth doing and spending political capital on? The key measure of fiscal health is a nation’s debt-to-GDP ratio. And you can lower that ratio without actually balancing the budget or running a surplus. Rep. Paul Ryan’s original “Roadmap” plan lowered debt-to-GDP by 30 points over two decades without a single year in the black. And that was assuming slow-growth CBO forecasts.