Category Archives: Deficit

Obama’s Counter to Paul Ryan’s Plan

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Yesterday, Obama held a news brief—it wasn’t a news conference—to present his plan on reducing the deficit and debt.  In essence it was, “spend more, tax more, cut nothing.”  Charles Krauthammer on Fox News had this to say.

I thought it was a disgrace. I thought I’ve rarely heard a speech by a president so shallow, so hyper-partisan, and so intellectually dishonest, outside the last couple of weeks of a presidential election where you are allowed to call your opponent anything short of a traitor. But we’re a year-and-a-half away from Election Day, and it was supposed to be a speech about policy. He didn’t even get to his own alternative until more than half-way through the speech, and when he did, he threw out these numbers suspended in midair with nothing under them with all kinds of goals and guidelines and triggers which mean absolutely nothing. The speech was really and was almost entirely an attack on the Ryan plan. And it was deeply dishonest. — NewsBusters, April 13, 2011.

When the totality of the speech was examined, it really held nothing new. Just “same old, same, old.”  Paul Ryan released a statement in The Weekly Standard that called the speech, “Excessively Partisan, Dramatically Inaccurate, and Hopelessly Inadequate.”  Ryan condensed Obama’s plan to the following…
  • Counts unspecified savings over 12 years, not the 10-year window by which serious budget proposals are evaluated.
  • Postpones all savings until 2013 – after his reelection campaign.
  • Runs away from the Fiscal Commission’s recommendations on Social Security – puts forward no specific ideas or even a process to force action.
  • Calls for the appointment of another commission, after mostly omitting from his Fiscal Year 2012 Budget any of proposals submitted by the commission he appointed last year.
  • Non-specific framework fails to meet his Fiscal Commission’s own deficit-reduction goals. 
Taxes:
  • Proposes to raise taxes on the American people by more than $1 trillion, devastating our fragile economy and stifling job creation.
  • Endorsed the Fiscal Commission’s ideas on taxes, which specifically called for lower tax rates and a broader base, but then called for higher tax rates. Which is it?
  • Government health and retirement programs are growing at more than twice the speed of the economy. At the current rate of spending, revenue would have to rise “by more than 50 percent” just to keep debt at its current level, according to the Government Accountability Office. That means tax increases across-the-board, now and in the future.  
Medicare:
  • Instead of proposing structural reforms that would actually reduce health care costs, the President proposed across-the-board cuts to current seniors’ care.
  • Strictly limits the amount of health care seniors can receive within the existing structure of unsustainable government health care programs.
  • Gives more power to unelected bureaucrats in Washington to determine what treatments seniors should or shouldn’t get, against a backdrop of costs that continue to rise.
  • Conceded that the relentlessly rising cost of health care is the primary reason why the nation is threatened by debt, and implicitly conceded that his health care law failed to solve the problem.
  • Eviscerates the only competitive element anywhere in health-care entitlement programs – the competition amongst Part D prescription-drug plans – which allowed the drug benefit to come in 41 percent under budget.

Medicaid:

  • Acknowledges that the open-ended financing of Medicaid is a crippling financial burden to both states and the federal government, but explicitly rejected the only solution to this problem, which is to give states the freedom they need to design systems that work for the unique needs of their own populations.
Defense: 
  • Proposes more cuts on top of $78 billion in cuts included in his own defense budget, which he proposed just two months ago – all at a time when he continues to task the military with new missions.
  • Secretary Gates has said that the military needs 2 percent – 3 percent real growth just to keep executing the missions that DOD has already been assigned.
  • Secretary Gates described deficit reduction plans that let budget targets drive defense policy as “math, not strategy.”
As expected, Obama didn’t propose anything to help the country.  
Not. One. Single. Thing.
***
Remember that $38Bn, uhhh, $26Bn, no, it’s only $10Bn in cuts from the last CR that Boehner foisted on us?  Well guess what, the actual cut is much less than that.

Uh oh: The 2011 CR Deal Only Saves $352 Million, Says…the CBO

Yes, you read that headline right.  That’s $352 Million with an M (emphasis mine):

A new budget estimate released Wednesday shows that the spending bill negotiated between President Barack Obama and House Speaker John Boehner would produce less than 1 percent of the $38 billion in claimed savings by the end of this budget year.
The Congressional Budget Office estimate shows that compared with current spending rates the spending bill due for a House vote Thursday would pare just $352 million from the deficit through Sept. 30. About $8 billion in cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.
The CBO study confirms that the measure trims $38 billion in new spending authority, but many of the cuts come in slow-spending accounts like water-and-sewer grants that don’t have an immediate deficit impact.
The budget deficit is projected at $1.6 trillion this year.


The ugly math, revealed:
According to the Congressional Budget Office (CBO), total outlays for the original CR (which ran from October 1, 2010 through March 4, 2011) were $1.289483 trillion.
But when you compare that figure under the new CR, set to be voted on tomorrow in the House, the total outlays come in at $1.289131 trillion.
By that measure of comparison, the savings between what they spent in the first CR, which was law until March 4, and the new CR, which could prospectively become law later this week for the rest of the fiscal year, is only $352 million.

You can read the rest of the article here.