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‘Grand bargain’ on deficit reduction: RIP?

President Obama's State of the Union address did nothing to address the nation's long-term fiscal imbalance, say deficit hawks. But Republicans share the blame. 

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“Why is it that deficit reduction is a big emergency, justifying making cuts in Social Security benefits, but not closing some loopholes?” Obama said.

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That added line, in fact, alarmed some on the left by raising the idea that cuts to Social Security could be part of the solution to over-large deficits. The sensitivity on both sides is palpable.  

The Republicans, for their part, have also shown no willingness to make a “grand bargain.” They say they’re done with tax increases, after conceding in the Dec. 31 fiscal cliff deal to a tax rate hike on the top 0.7 percent of taxpayers.

Obama made a raft of proposals in his State of the Union address that involve government spending, including expanding access to preschool; creation of “manufacturing innovation institutes;” and a “Fix-It-First” program to repair the nation’s deteriorating infrastructure. And he promised not to add a dime to the deficit.

But that’s hardly a ringing call for aggressive deficit reduction.

Leading deficit hawks applauded Obama for identifying health-care costs and an aging population as the drivers of the nation’s skyrocketing debt. But they called on him to be bolder in addressing the problem.

“The president needs to embrace a bolder savings target for deficit reduction to truly put the debt on a downward path as a share of the economy,” writes Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “The $1.5 trillion of deficit reduction the president is calling for simply won't be enough to put the debt on a sustainable path. We need at least $2.4 trillion."

Republicans don’t even buy Obama’s assertion that he has put forward a plan to reduce the deficit by $4 trillion over the next decade. Last October, called the claim “half true.” Part of it – $1.7 trillion dollars’ worth – depends on when one starts counting the savings, the nonpartisan fact-checking site concluded.

In the official Republican reply to Obama’s address, Sen. Marco Rubio (R) of Florida gave the president no quarter, calling on him to “abandon his obsession with raising taxes and instead work with us to achieve real growth in our economy.”

So both sides seem as far apart as ever. And as Obama himself suggested, the nation for now seems trapped, going “from one manufactured crisis to the next” without any larger resolution to its budget imbalance. 


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