WaPo: Obama budget proposal falls short, could derail "super committee" effort

After getting hammered by Republicans in the debt-ceiling debate, Barack Obama clearly wanted to go on offense with his own deficit-reduction proposal.  That opened up the opportunity to go fully populist, blaming the wealthy for not paying their fair share in order to propose massive tax hikes along with his supposedly new ideas for spending reductions.  However, the Washington Post reports today that the ideas are not only not new, they won’t meet their targets and don’t actually reduce the deficit much from Obama’s previous proposals — and could derail any serious attempt by Congress to reduce spending in the future:

Advertisement

[I]ndependent budget experts said the blueprint that Obama unveiled Monday — which White House officials say would save more than $4 trillion when added to earlier budget deals this year — appears to fall short of his target. The plan also relies on an array of well-worn budget ploys that do little to advance the cause of bipartisan cooperation in taming the nation’s spiraling debt, the experts said.

According to White House estimates, the new framework would require $6.6 trillion in fresh government borrowing over the next decade. That’s only slightly less borrowing than projected in the budget outline Obama proposed in April. …

The latest Obama plan “doesn’t produce any more in realistic savings than the plan they offered in April,” said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget. “They’ve filled in details, repackaged it and replaced one gimmick with another. They don’t even stabilize the debt. This is just not enough.”

The most disheartening development, MacGuineas and others said, is Obama’s decision to count $1.1 trillion in savings from the drawdown of troops in Iraq and Afghanistan toward his debt-reduction total. Because Obama has no intention of continuing war spending at last year’s elevated levels, that $1.1 trillion would never have been spent.

That’s a big problem, and not just for Obama’s proposal.  That kind of smoke-and-mirror gambit plays right into the hands of Democrats in Congress who want to use that same dodge to protect future spending increases.  If they can count that $1.1 trillion as savings even though the money wouldn’t have been spent anyway, that’s $1.1 trillion they don’t have to cut from other programs they want to protect.  In fact, that would just about cover 90% of their mandate, leaving the so-called “super committee” only $100 billion to cut from the next ten years — a paltry $10 billion a year while running deficits of over a trillion dollars a year:

Advertisement

The “supercommittee” is under orders to produce a 10-year plan to save at least $1.2 trillion by Thanksgiving. If the panel counts war savings, “then it’s over,” MacGuineas said. “The committee will have done nothing real.”

That’s not the only dodge in Obama’s plan, either.  Until now, Obama has used only the Bush-era middle-class tax rates for his baseline, as he has insisted all along that he eventually wanted to end the Bush rates for higher-income earners.  Suddenly, though, Obama has adjusted his baseline to include all of the Bush-era rates, a gimmick that allows him to claim an additional $866 billion in deficit reduction over the next ten years — even though the rates will expire on their own at the end of next year, absent Congressional action to extend them.

It’s worth pointing out that the gain relies on static tax analysis that assumes that people won’t change their behavior when tax policy changes — a fallacy in which this administration has often engaged, especially in the ObamaCare debate and the impact of its taxation and regulation.  Also, this contrasts with the CBO’s approach to scoring, which compares changes to current law as it stands.  Since those tax rates would change in current law anyway, a CBO score wouldn’t count any of that as deficit savings in the future.

The Obama administration is producing one gimmicky, unreal policy after another, but this one will do more damage to real deficit reduction efforts than the rest.

Advertisement

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement
Advertisement