Can the Republicans balance the budget?

jeff sessions
Alabama Republican Jeff Sessions, who may chair the Senate Budget Committee next year, says he wants to balance the budget in 10 years. It's possible on paper, but practically it's unlikely to fly, budget hawks say.

With Republicans getting ready to take over on Capitol Hill, a key senator has renewed party calls to balance the federal budget.

"We must produce a budget that achieves balance within 10 years," Jeff Sessions said last week.

Sessions, who may end up in charge of the Senate's budget committee next year, is not the first Republican to call for a balanced budget in a decade. House Speaker John Boehner and House Budget Chairman Paul Ryan have supported the idea as recently as last year.

But big questions remain over whether it can be done.

The Committee for a Responsible Federal Budget estimates that to balance the budget by 2025 would require savings of $5.5 trillion -- $4.7 trillion in spending cuts or new taxes and $800 billion in interest savings.

And here's the thing: That assumes lawmakers don't pass any new laws that raise spending or cut taxes and add to deficits.

It also means no more renewals of "temporary" tax breaks for businesses and individuals. No more "doc fixes" to boost Medicare reimbursement rates for doctors. And no more talk of raising the "sequester" spending caps on defense, which many Republicans want to do.

Republicans, of course, are loath to raise taxes. So balancing the budget in 10 years would require huge spending cuts -- by more than 10% over the decade.

A model for the venture could be Ryan's most recent budget proposal, which balanced after 10 years.

Related: What now for taxes after Republican sweep?

Ryan's biggest savings ($2.1 trillion) came from repealing all the perks of the Affordable Care Act, such as the individual subsidies to buy insurance.

But Ryan left Obamacare's Medicare cuts and taxes intact. He also proposed changes to Medicaid spending that would save $730 billion.

Another way to help balance the budget, on paper at least, is to make generous assumptions about how much the economy will grow. The better the economy, the more tax revenue Uncle Sam collects.

But that's like trying to "count your chickens before they hatch," said Marc Goldwein, senior policy director of the Committee for a Responsible Federal Budget.

Politically and practically, being in charge of Congress before the 2016 election may have a moderating effect on the Republican impulse to balance the budget so quickly.

Debt vs. deficit: What's the difference?
Debt vs. deficit: What's the difference?

A balanced budget push that proposes cuts to popular programs could be tough to sell to general election voters.

William Hoagland, senior vice president of the Bipartisan Policy Center, called balancing the budget a "good goal."

"But to achieve it requires some significant policy changes in the most sensitive government programs we have -- Social Security and Medicare," said Hoagland, who was a longtime top Republican staffer on the Senate Budget Committee.

And if a balanced budget tries to avoid making near-term changes to the big entitlement programs, the cuts to other parts of the budget would have to be that much steeper.

Of course should a balanced budget get through both the House and the Senate, it very well could meet President Obama's veto pen.

Personal Finance


CNNMoney Sponsors