Many are still debating how much was accomplished in the debt/budget agreement approved by the House today with the Senate to vote and the president to sign tomorrow. In my view, much was accomplished, and credit goes to all those who have been laying out the arguments and fighting hard for a return to sound fiscal policy as part of a pro-growth program to get the economy moving again.
You can see the impact of the agreement on spending with the following chart, which I have used before to show the recent federal spending binge and how to reduce it in a credible way.
It shows total federal government outlays—including both entitlements and discretionary spending—as a share of GDP for the past decade and the next decade under the various budget proposals. In previous posts and articles in the Wall Street Journal I have shown the top line, which is the original White House budget proposal submitted last February, and the bottom line, which is this year’s House Budget resolution due to Paul Ryan; this House proposal brings the budget into balance without any increase in taxes. The issue all year has been where between these two lines we would end up, and what would remain to be settled during the 2012 election.