Reading Between Obama's Lines: Tax and Spend
Both the President’s deficit speech shows his desire to hike taxes and his comments about the debt limit reveal he has little intention of cutting spending.
Deficit Speech: Tax
In his Wednesday speech, President Obama touted his vague plan that would bring down the deficit. Notably, he claimed a 3 to 1 ratio of spending cuts to tax increases. However, according to a comparison of his plan with CBO projections, his tax increases account for over half of his deficit reductions.
The analysis of Obama’s plan, performed by Goldman Sachs, analyzed the various deficit reduction plans over ten years, comparing costs and savings as a percentage of projected GDP. Obama’s plan could lower the deficit by 3.4% of GDP over 10 years. But of that 3.4% reduction, 1.9% comes from tax increases–more than half of the total! And reducing the President’s rosy growth projections make Obama’s tax increases a larger proportion. Clearly, this is nowhere near the “3:1” ratio of spending cuts to tax hikes the President talked about.
Debt Limit: Spend
The Hill reports Obama welcomes spending cuts with a debt limit increase:
President Obama said Friday that spending cuts will almost certainly be attached to a vote to raise the nation’s debt limit… “I think it’s absolutely right that it’s not going to happen without some spending cuts,” Obama said during an interview with The Associated Press.
That’s fine, but he left all specific spending cut questions to be answered after the 2012 election. In the interview report from the Associated Press, the President clearly stated that the limit needs to be raised now and said substantive cuts need to wait until after the 2012 election.
Unlike The Hill’s brief clip, the entire report from the Associated Press reveals the President’s view:
“We always have. We will do it again,” said Obama, who voted against raising the debt limit as a freshman senator from Illinois.
He warned of dire consequences if the debt ceiling is not raised before it hits its limit of $14.3 trillion; the administration says the latest Congress could possibly act is by early July. But Obama said some longer-term questions about where the government trims its operations will have to be left until after the 2012 presidential election.
Apparently, the real leadership Obama offers is tax and spend. Where have we heard this before?