Some Brookings Institution worthies teamed up with the Heritage Foundation and the Concord Coalition along with such centrist stars as Will Marshall of DLC/PPI and Maya MacGuiness of New America to produce a report called "Taking Back Our Fiscal Future" (PDF) that nicely reflects the center-right Beltway consensus that (a) budget deficits are very bad, and (b) they should be tamed primarily by cuts to federal retirement security programs.
A rival and, in my view, sounder approach is offered under the auspices of the Center on Budget and Policy Priorities with the title "A Balanced Approach to Restoring Fiscal Responsibility" (PDF). Brad Delong, one of the "Balanced Approach" team, offers a blog post sized summary of the problems with the TBOFF approach and the following alternative recommendations:
We believe that rather than spending time trying to design complicated budget procedures of dubious merit and effectiveness, we should focus on concrete legislative steps: policies that raise more revenue, increase economic growth, slow the rate of health care spending systemwide and nationwide, reform Medicare, and bring Social Security expenditures into balance with Social Security resources. Specifically:
- Slash farm supports.
- Slash tax loopholes and tax expenditures.
- Halt Medicare Advantage overpayments to private insurance companies.
- Adopt the other recommendations of the Medicare Payment Advisory Commission.
- Increase Medicare premiums for the well-off.
- Institute vigorous research programs to determine the comparative cost-effectiveness of different treatments and procedures.
- Institute vigorous research programs to determine the causes of the extraordinary nationwide variation in health-care spending.
- Use the results of research to devise policies to restrain health care cost growth without seriously compromising quality.
- Index entitlement benefits by a proper cost-of-living rather than a consumer price index.
- Index tax brackets by a proper cost-of-living rather than a consumer price index.
- Adhere to the time-tested and effective pay-as-you-go rules.
I would add that in my view it's not reasonable to talk about fiscal policy with no mention of the Defense Department budget. All too often U.S. military posture is discussed as if the budgetary costs involved aren't real, and U.S. fiscal policy is discussed as if the Defense Department isn't there. In fact, the military is by far the biggest expenditure item on the balance sheet and needs to be on the table for discussion. That doesn't mean that draconian defense spending cuts are called for, but we need to consider the fact that given the scale of the Pentagon budget even small efforts at restraint involve large sums of money.
And of course in addition to the formal budget, there's the question of ongoing policy. If I were to propose a domestic spending initiative with a bill of over $100 billion a year it would be subjected to some pretty serious scrutiny as to whether the benefits can justify that kind of cost. The continuing operation in Iraq, however, is typically discussed as if any benefits whatsoever serve to justify a massive and costly undertaking, a standard that we (rightly) don't apply in thinking about any other portion of the pie.