Do the numbers of Obama's $4 trillion deficit plan add up?
Deficit plans are never set in stone and often more a statement of policy values than a fiscal blueprint. President Obama's is no different. But digging into it offers interesting insight.
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First of all, it includes about $1 trillion in cuts that have already occurred, pursuant to last year’s budget deal with Congress. The administration doesn’t hide this – the new campaign economic booklet notes that “The President has already signed $1 trillion in spending cuts into law.” But “signed into law” does not equal “due only to me.” Congress, specifically congressional Republicans, had something to do with those reductions as well.Skip to next paragraph
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Washington Post fact checker Glenn Kessler judges this to be “phantom savings,” akin to claiming credit for a tuition-size reduction in your household budget the year after your child graduates from college. Other experts aren’t so sure, noting that Obama campaigned in 2008 on winding down US military forces in the Middle East. You can judge this yourself, keeping in mind that Obama (and a President Romney) would have left at least a token force in Iraq if the Iraqi government had signed a status of forces agreement.
Third, another large portion of savings comes from interest savings. The administration calculates that its reductions in other areas would result in the government paying about $800 billion less in interest on the debt over the decade. While this may be accurate, it does not exactly reflect a tough budget choice per se.
The administration figures that allowing the Bush tax cuts to expire for the wealthy would raise $1.4 trillion over the decade. That’s the biggest change the president’s budget plan posits on the revenue side of the equation. If you subtract the war savings and predicted lower interest costs, the ratio of proposed budget cuts to tax increases is not $2.50 for every $1. It’s about 54 cents in cuts for every 46 cents in new revenue, according to the liberal-leaning Center on Budget and Policy Priorities.
Ten years is a long time in terms of government policy, and Congress changes to the federal budget every year. The chance that Obama’s $4 trillion deficit reduction plan as currently outlined would survive over a decade is vanishingly small. Think back 10 years – how would a Bush-era 2002 fiscal projection look today, given all the fiscal turmoil that has struck the nation?
Obama’s plans, like Mitt Romney’s, are thus not so much blueprints as expressions of values. They reflect how the candidates want the voters to see them. Voters should weigh the numbers both men submit to the public in that light.