Obama: Republicans’ revenue math doesn’t work, except for when it did
posted at 2:41 pm on December 5, 2012 by Erika Johnsen
Remember — uhm, I think it was — yesterday, when President Obama said that the GOP’s cliff counteroffer proposing $800 billion in new revenue without raising taxes was untenable, because the math just doesn’t work?
Oh, and then there was the time — also yesterday — that White House Press Secretary Jay Carney said that “it’s not a plan to say that we’re going to magically increase revenues through loophole closures and deduction caps,” à la magic beans and fairy dust?
Yes, about that.
Once upon a time (that time being July 2011), Democrats actually thought that the math of raising that much revenue through closing loopholes, capping deductions, and eliminating credits, without hiking tax rates, could work. In fact, forget $800 billion; President Obama claimed he could wring $1.2 trillion out of such a plan. So, Republicans are essentially repeating one of the president’s plans back at him, and now it’s somehow the most far-fetched idea on the planet — who knew that the accuracy of simple math depended so heavily on political calculation?
What we’ve said was give us $1.2 trillion in additional revenues, which could be accomplished without hiking tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions, and engaging in a tax reform process that could have lowered rates generally while broadening the base.
Oh, the tangled webs we weave, when first we practice to deceive! It is so painfully, glaringly obvious that there is absolutely no real policy rationale for Democrats insistence on hiking tax rates on the wealthy, especially since doing so will amount to pretty much nothing in covering the additional spending President Obama wants to do. But hey, given their newfound interest in math — sure, let’s talk math.
Both the White House and House Republicans are pretending that their goal is “reducing the deficit,” which they suggest means making real spending choices. They are talking about a “$4 trillion plan,” or something, regardless of how that number is reached.
Here’s the reality: Those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s “baseline” has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms.
The most absurd current example is Mr. Obama’s claim that his “$4 trillion” plan reduces the deficit by about $800 billion over 10 years by ending the wars in Iraq and Afghanistan. But those “savings,” as he calls them, are measured against a White House budget office spending baseline that is fictional. Those wars are already being unwound and everyone knows the money will never be spent. But they are called “savings” to gull the public and make the deficit reduction add up to a large-sounding $4 trillion.
Breaking on Hot Air