Monday, September 19, 2011

Obama's Balanced Approach: $3 In Tax Hikes For Every $1 In Spending Cuts

From the Washington Times:
President Obama on Monday proposed a deficit reduction plan that calls for about $3 in new tax increases for every dollar in additional spending cuts as he seeks to put his imprint on the ongoing talks with Congress over reducing the government’s staggering debt...

The White House argues his plan totals $4.4 trillion in deficit reduction over the next 10 years, though $1.1 trillion of that comes from savings on war-fighting expenses that all sides agree were going to happen anyway as the U.S. missions in Iraq and Afghanistan shrink. Another $1.2 trillion has already been signed into law in last month’s debt deal and another $430 billion comes from lower interest payments because of the potential lower debt.

Yet another $450 billion comes from the tax increases the president proposed last week — and has already accounted for in new spending he wants on infrastructure, and other tax cuts.

That means in terms of actual new proposals, the president’s plan totals about $1.2 trillion, of which the lion’s share comes from his longstanding vow to raise taxes back to Clinton-era rates on the top income brackets. The rest is $580 billion in reductions to formula-driven entitlement programs such as Social Security, with much of the savings coming from reducing overpayments and finding waste.

Those $580 billion in newly proposed cuts are dwarfed nearly three-to-one by the $1.5 trillion in additional taxes the president wants to see going forward.
"We can’t just cut our way out of this hole. It’s going to take a balanced approach."
President Obama - September 19, 2011

h/t - Ace of Spades