Both parties agree that fraud's a bad thing--how hard can a deficit reduction deal be in Washington?

06/17/2011 5:30 pm EST


Jim Jubak

Founder and Editor,

There’s big progress in deficit reduction talks in Washington. Not.

The prospect of a U.S. default if Congress doesn’t raise the debt ceiling by August 2 hangs over the U.S. economy and the global financial system.

The goal, according to Vice President Joe Biden, is a credible down payment on reducing the U.S. budget deficit over the long term. How much of a down payment would be credible? $4 trillion over 10 years would fit the bill, Biden said yesterday.

Fortunately, budget proposals from Democrats and Republicans do have substantial overlaps, according to the Committee for a Responsible Federal Budget. Those include cuts to subsidies for student loans (savings of $20 billion to $65 billion over 10 years), changes in the way the Pension Benefit Guaranty Corporation collects fees (savings of $5 billion to $10 billion), sales of excess federal government property (savings of $10 billion to $15 billion) and reducing health-care fraud (savings of $10 billion to $35 billion.)

Put those overlaps all together and you’ve got savings of $125 billion over 10 years.

Only $3.875 trillion to go.

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