Will the president and Congress reach a budget deal before sequestration kicks in? If they do, what would the agreement include - tax hikes for the rich? Cuts in spending?
There is a simple approach available to the occupants of the White House and the Capitol Building: Don't change anything.
Don't cut - or increase - overall federal spending. Leave federal spending at current levels and nurture a growing economy to allow revenues to catch up.
We're not being facetious. Assuming the economy can avoid a recession, it might work. First, consider these projections, taken from summary tables issued by the White House for the 2013 budget:
| Year | revenues | outlays | difference |
| (amounts in trillions, deficits in parentheses) | |||
| 2013 | 2.902 | 3.803 | (.901) |
| 2014 | 3,215 | 3.883 | (.668) |
| 2015 | 3.450 | 4.060 | (.610) |
| 2016 | 3.680 | 4.329 | (.649) |
| 2017 | 3.919 | 4.532 | (.612) |
| Total added to national debt: $3.44 trillion | |||
| Next, use the same revenue projections but freeze federal spending at the 2013 level: | |||
| Year | revenues | outlays | difference |
| (amounts in trillions, deficits in parentheses) | |||
| 2013 | 2.902 | 3.803 | (.901) |
| 2014 | 3,215 | 3.803 | (.588) |
| 2015 | 3.450 | 3.803 | (.353) |
| 2016 | 3.680 | 3.803 | (.123) |
| 2017 | 3.919 | 3.803 | .116 |
| Total added to national debt: $1.85 trillion |
Note that by 2017, revenue is projected to exceed spending. The prudent course of action would involve using that and later surpluses to allow for inflation while repaying the national debt.
While this approach would be simple, it would not be easy. Part of the reason the White House figures foresee greater spending is due to expected increases in expenditures for entitlement programs. Reforming those outlays, plus maintaining the nation's defense, within the confines of a static budget would entail making formidable choices.
That would be more difficult than allowing a baseline budget, and debt ceiling, that continually grow.
