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Ryan: Obama Budget Would Add $8.2T US Debt

From the Washington Times:

GOP says Obama’s budget blows chance of ‘grand bargain’

By Dave Boyer and Susan Crabtree | April 10, 2013

Top congressional Republicans declared President Obama’s tax-laden budget for fiscal 2014 dead on arrival Wednesday, saying its failure to cut deficits destroys any hope of a “grand bargain” to fix the federal government’s fiscal crisis…

Only Obama and the news media were pretending that there was ever any chance for a ‘grand bargain.’

Mr. Obama introduced his fiscal 2014 budget to Congress on Wednesday, a $3.77 trillion spending plan that would raise hundreds of billions of dollars in taxes and commit his administration to entitlement reform for the first time by changing the way Social Security’s cost-of-living adjustments are calculated.

Responding to Republican accusations that his budget doesn’t trim deficits as much as he claims, Mr. Obama insisted “the numbers work.”

“There’s not a lot of smoke and mirrors in here,” Mr. Obama said in the White House Rose Garden as he presented the document with Jeffrey Zients, the acting budget director.

So we know there are a lot of smoke and mirrors. And there are. (See below.)

The budget proposal, which is nine weeks late, would replace the across-the-board “sequester” budget cuts that started March 1 with a mix of tax increases and more targeted program cuts. The blueprint also calls for more than $25 billion in specific spending cuts to 215 line items, slightly less than the $28 billion in individual program cuts that Mr. Obama sought last year.

So Obama is actually asking for less in spending cuts that he sought last year, and the Republicans were supposed to see that as a great compromise?

Mr. Obama said the budget would reduce deficits by $1.8 trillion over 10 years, partly by raising $580 billion in additional revenue through closing loopholes for wealthier taxpayers and limiting tax deductions, as well as eliminating tax breaks for oil and gas companies. It would include $400 billion in budget cuts divided evenly between defense and non-defense programs…

Which is not very different from the sequester cuts. Except the cuts on the domestic side will never happen.

But in an indication of how far apart the two sides are, congressional Republicans immediately countered that the president’s plan reduces deficits by only $119 billion over 10 years, when the cost of replacing the sequester cuts is factored in and the administration’s fiscal “gimmicks” are exposed…

Mr. Ryan and Republican staffers said the administration is proposing largely bogus savings of $675 billion from ending the war in Afghanistan, as well as failing to offset a Medicare funding formula known as the “doc fix” ($250 billion), and failing to count the cost of extending certain refundable tax credits ($161 billion). Add up those gimmicks, Republicans said, and Mr. Obama is left with $119 billion in true deficit reductions over 10 years.

Meaning that Obama’s cuts are less than one tenth of what he is claiming ($1.8 trillion).

Republican budget sources said Mr. Obama’s plan would raise taxes by $1 trillion over a decade, on top of the $600 billion in increased revenue he secured as part of the “fiscal cliff” deal Jan. 1. Mr. Obama’s budget never achieves balance, with a deficit projected at $439 billion in its 10th year.

Nitpickers.

Mr. Obama also proposes to implement the “Buffett rule,” named for billionaire investor Warren Buffett, which would require households earning $1 million or more per year to pay at least 30 percent of their income in taxes.

We thought the ‘Buffett Rule’ meant that you could owe $1 billion dollars in back taxes for over ten years, and not get in trouble with the IRS.

The spending plan will call for several initiatives that Mr. Obama previously outlined, including universal preschool to be funded by a cigarette tax, $50 billion more in infrastructure spending to create construction jobs, and tax credits for small businesses to hire more employees. The White House said all of the new spending proposals are paid for and would not add to the deficit, which in the current year is projected at about $850 billion.

The White House estimates that the deficit in fiscal 2014 will be $744 billion…

And we are supposed to believe that.

The president is proposing to change the way Social Security benefits are calculated, moving from the current inflation measure to the “chained” consumer price index to slow the program’s cost growth by reducing payments over time to seniors and future retirees.

The budget also will call for higher-income beneficiaries to pay more for Medicare coverage, and for $600 billion more in revenue — most of which would come from capping the tax deductions that those in the higher tax brackets can claim.

The Social Security proposal would save about $230 billion over 10 years, according to administration estimates, and the health care reform would save $400 billion, mainly by cutting Medicare payments to providers

Mr. Ryan said the president’s budget would add $8.2 trillion to the national debt over 10 years.

“This is worse than a status quo budget,” he said. “It’s just more taxing, more spending and more of the same.” …

We already know Obama’s tax increases have nothing to do with balancing the budget, and everything to do with punishing the so-called rich — and smokers.

This article was posted by Steve Gilbert on Thursday, April 11th, 2013. Comments are currently closed.

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