Obama’s Deficit Plan is All Tax Hikes, No Cuts
September 19, 2011 9:29 P.M. By Andrew Stiles
Today President Obama’s released a deficit-reduction proposal that
was actually written down on paper, the first time he has done so since introducing his laughable 2012 budget back in February (the Senate voted it down 97 to 0). The White House claims that the president’s plan represents a “balanced approach” that, relative to its current policy baseline, will increase the federal deficit initially by $300 billion in fiscal year 2012 (to pay for his “jobs plan“), but will reduce deficits by $3.2 trillion over the next decade. The claim is outrageously misleading. In fact, when you strip away the budgetary gimmicks, Obama’s plan achieves less than half the overall deficit reduction he is claiming, and is as wildly unbalanced as his February budget proposal.
In order to come up with that $3.2 trillion figure, the White House employs the following gimmicks to achieve a phony $1.8 trillion in deficit reduction that should not be counted as such: (1) claiming the inevitable reduction in spending — about $1.1 trillion — on the Iraq and Afghanistan wars as “savings,” (2) including in its baseline $293 billion in funding for the Medicare “Doc Fix” to restore Medicare payments to physicians, spending that does not reflect current law and ought to be offset, (3) counting as “savings” the subsequent reduction in interest payments on the debt, which does not constitute a “policy” and should not be scored as one.
When that $1.8 billion is removed from the equation, the true nature of the president’s “deficit-reduction” “plan” is laid bare:
$1.4 trillion in net deficit reduction consisting of $150 billion in spending increases combined with $1.6 trillion in tax increases. Consider the following figures compiled by Republican staff at the Senate Budget Committee:
Fiscal Policy in President Obama’s September 2011 Budget Plan
(Fiscal Years 2012-2021, in Billions of Dollars)
Spending:1
Stimulus (American Jobs Act)2 430
Medicare “Doc Fix” (Payment Freeze): 293
Other Medicare Changes: -248
Medicaid and Other Health: -73
Other Mandatory Policy Changes: -257
Net Spending Changes: 146
Taxes:3
Stimulus (American Jobs Act): -17
Tax “Reform”: 1,573
Net Tax Changes: 1,555
Net Policy Changes:4 -1,409
Tax Increases as Share Net Deficit Reduction: 110%
1–Spending increases are shown as positive (+) and spending decreases are shown as negative (-).
2–Includes payroll tax reductions as spending because it is expected that the trust funds will receive general fund transfers to avoid any reduction in trust fund balances.
3–Tax increases are shown as positive (+) and tax decreases are shown as negative (-).
4–Deficit increases are shown as positive (+) and deficit decreases are shown as (-) negative.
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