Obama’s Math Doesn’t Work
Last night, Republican aides on Capitol Hill circulated what they said was the White House’s initial offer on the fiscal cliff. It was nothing short of absurd: a $1.6 trillion tax hike, a new stimulus plan and elimination of the debt ceiling. Mark Halperin said President Obama’s “offer is intended in part to say here’s my math. Here’s the level of deficit reduction I can reach.” Perhaps so, but the math just doesn’t work.
The Washington Post’s Ezra Klein, who characterized the offer as evidence the president “refuses to negotiate with himself,” casually walked his readers through the math:
It calls for $1.6 trillion in taxes and only $400 billion in new entitlement spending cuts (though note that it assumes the roughly trillion dollars in discretionary spending cuts passed in the Budget Control Act and the trillion dollars in savings from ending the wars, such that the total spending cuts, at least in the White House’s view, are nearer to $2.4 trillion). (emphasis added)
Not only is the offer fundamentally unserious, so too are characterizations that the math works. Last year, Heritage’s Patrick Knudsen explained the absurdity of using “war savings” as deficit reduction:
The gimmick starts with an assumption that the government would continue its peak levels of war spending indefinitely and would also increase those amounts for inflation in the future. But no one ever intended this to happen: Even the Bush Administration had begun planning a reduction in troop levels.
Nevertheless, from President Obama’s first budget, he has used the inflated projections for overseas contingency operations (OCO) as a budget benchmark so he could claim large savings by proposing to spend less than those amounts, and he has continued the practice right up through his recent debt reduction proposal.
Counting illusory savings, or previously agreed to savings like the Budget Control Act, as part of a “grand bargain” is disingenuous. To borrow a phrase from the president, the math doesn’t work.
UPDATE: Heritage has a great graph that shows the Obama definition of “a balanced plan.”