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Obama’s Vow to Halve Deficit Puts Focus on Budget Plan

President Barack Obama cast a new focus on the budget deficit Monday, announcing a goal of halving the $1.3 trillion gap by the end of his first term. Analysts weigh the goal.

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  • RAY SUAREZ:

    How realistic is the president's pledge to halve the deficit by 2012? We ask that of three experts who attended today's summit.

    Douglas Holtz-Eakin is former director of the Congressional Budget Office. He also served as an economic adviser for John McCain's presidential campaign.

    Maya MacGuineas is a president of — is president of the Committee for a Responsible Budget at the New America Foundation.

    And Robert Greenstein heads the Center on Budget and Policy priorities.

    And since all three of you were involved in the breakout groups after the president gave both his fairly grim diagnosis and his fearsome set of assignments, let me get a quick impression from all of you whether your groups in this afternoon's meeting thought what you were asked to do was doable.

    Bob Greenstein?

    ROBERT GREENSTEIN, Center on Budget and Policy Priorities: Well, today's session wasn't designed itself to produce some set of agreements in three hours. It was just the beginning of a process.

    There was a very good bipartisan feel in the room at the end. It was a very good first step. And as your clip showed, the president was completely in command of the room at the end of the day and expressing a real determination to make progress on these problems.

  • RAY SUAREZ:

    Maya MacGuineas?

  • MAYA MACGUINEAS, New America Foundation:

    Well, I was in the tax session. And it was really an opportunity not to come forward and figure out a tax plan, but for Secretary Geithner and Christina Romer, who runs the CEA, to sort of hear from the participants, politicians and outsiders, what they think can be done on tax reform.

    There was a lot of talk about the importance of permanency or sort of understanding where the tax code goes from here. We have a lot of things that change year to year.

    The alternative minimum tax, for instance, gets patched each year or you have these tax cuts that are set to expire at the end of the decade. People said that needs to be made permanent. Whatever the policy is, we need to know what it will be.

    The tax code needs to be simplified. And there was also focus on other things, like broadening the tax base, looking at corporate income tax reform. A lot of ideas were laid out there.

  • RAY SUAREZ:

    Douglas Holtz-Eakin?

  • DOUG HOLTZ-EAKIN, Former Director, Congressional Budget Office:

    Well, I was in the health care reform session, and I think it revealed all the tensions that are present in this entire process.

    People spoke optimistically about the chances to do major health care reform and the idea that we could get higher quality care in the United States at a lower cost. And I think there's a great opportunity there.

    There's a lot of agreement between Republicans and Democrats on needed changes in the practice of medicine in America that would deliver higher-quality care and would actually get us a price tag we could afford in this nation.

    But there's also some pitfalls. Those changes will take a long time, and the cost savings will probably evolve very, very slowly. And if we rush into health care reform and cover a lot of people with big government programs, I think there are going to be political tensions and there's going to be a big impact on a budget situation that's already very bad.