Obama Plan to Cut Deficit Will Trim Spending by $3 Trillion
Obama’s debt-reduction plan: $3 trillion in savings, half from new tax revenue
And the Times description:
WASHINGTON — President Obama will unveil a deficit-reduction plan on Monday that uses entitlement cuts, tax increases and war savings to reduce government spending by more than $3 trillion over the next 10 years, administration officials said.
Mr. Obama will call for $1.5 trillion in tax increases, primarily on the wealthy, through a combination of closing loopholes and limiting the amount that high earners can deduct. The proposal also includes $580 billion in adjustments to health and entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid. Administration officials said that the Medicare cuts would not come from an increase in the Medicare eligibility age.
Senior administration officials who briefed reporters on some of the details of Mr. Obama’s proposal said that the plan also counts a savings of $1.1 trillion from the ending of the American combat mission in Iraq and the withdrawal of American troops from Afghanistan.
Well, unless I am completely misunderstanding this, the $1.1 trillion of savings from winding down those two wars has already been factored into the Joint Select Committee deficit reduction baseline. Put another way, if the select committee could deliver $1.1 trillion of their original $1.5 trillion target simply by citing wind-downs in Iraq and Afghanistan, the process would hardly be fraught with suspense.
That being so, an honest news report would be that Obama seeks roughly $2 trillion of "new" deficit reduction, achieved by way of $1.5 trillion in tax hikes and $500 billion in Medicare/Medicaid cuts. That $2 trillion would meet the original $1.5 trillion goal of the deficit reduction committee and tack on Obama's supplemental goal of another $500 billion (roughly) to pay for his latest jobs bill (which he laughably described as "paid for").
Instead, the Big Media chose to embrace the White House spin and present Obama's plan as half tax hikes and half spending cuts. Go figure.
NOW WHO IS CONFUSED, BESIDES ME? Let me regroup - per Keith Hennesey, under the current law baseline the Bush tax cuts are already set to expire, so the select committee cannot claim credit for that towards their $1.5 trillion target. However, nothing can stop Obama from playing games. From the Times:
Under Mr. Obama’s proposal, $800 billion of the $1.5 trillion in tax increases would come from allowing the Bush-era tax cuts to expire. The other $700 billion, aides said, would come from a combination of closing loopholes and limiting deductions among individuals making more than $200,000 a year and families making more than $250,000.
So really, Obama's $3 trillion plan includes $1.1 trillion of military savings and $800 billion of expiring Bush tax cuts already included in the Congessional baseline. In other words, the $3 trillion plan is a $1 trillion plan. Bold leadership!