One of the most technical decisions the deficit supercommittee has to make is also one with huge consequences: Whose deficit calculations should it use?
Any budget-cutting effort has to start with a budget baseline. It’s an issue that usually matters only to the number crunchers. But this time, the whole 12-member supercommittee will have to care — because depending on which one it chooses, it will be dealing with deficit estimates that are about $5 trillion apart.
It can use the standard baseline set up by the Congressional Budget Office, which says the nation faces $3.5 trillion in deficits over the next decade. But this baseline assumes that Congress will allow doctors’ Medicare payments to get sliced by 30 percent next year and that former President George W. Bush’s tax cuts will expire in 2012 — neither of which is likely to happen.
The committee can choose to use a more realistic scenario — one that assumes the doctors won’t get cuts and that most of the tax cuts will get renewed. But while CBO’s alternative fiscal scenario is more realistic, it comes with a more daunting deficit figure: $8.5 trillion over 10 years.
That’s why, in the eyes of the number crunchers, the supercommittee’s decision could make or break the legitimacy of its work.
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Source: Jennifer Haberkorn | POLITICO