- The President is not, as he claims “proposing real, serious cuts in spending.” His proposals would result in a tiny net reduction in spending: -$86 B over 10 years. Almost all of the spending cuts for which he wants to claim credit have already been enacted or accounted for. Almost all the new spending cuts he proposes would be used to offset higher spending in his Jobs bill proposal and for more Medicare spending on doctors.
- The President is proposing about $1.5 T in higher taxes over ten years, offset by about $250 B of tax relief, for a net tax increase of almost $1.3 T.
- Almost all of the President’s new proposed deficit reduction comes from tax increases.
And the ploy:
Simplifying even further, there is a perverse hidden logic to the President’s proposal. It goes like this: ”We cut spending in the spring and summer, so we’re going to propose almost all tax increases this time. That’s balanced.” If you reread the Presidential quote up top, you can see the rhetorical trick revealed:
THE PRESIDENT: … When you include the $1 trillion in cuts I’ve already signed into law, these would be among the biggest cuts in spending in our history. But they’ve got to be part of a larger plan that’s balanced …
You could be forgiven for thinking that the President is claiming that his new proposals are balanced, and that “the larger plan that’s balanced” is what he has proposed this month, consisting of equal-sized spending cuts and tax increases. That is the incorrect conclusion to which you are led, but technically the President is not claiming that. The “larger plan that’s balanced” is one that includes spending cuts enacted over the past six months. The “among the biggest cuts in spending in our history” are not those newly proposed, but those previously enacted.