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Deficits, Debt and Budget Deals: Obama's Second Budget Plan Parades Failures of the First
Today, President Obama took the unprecedented step of offering an alternative to his own budget plan proposed just a few months earlier. Rather than rectify the mindless government bloat and onerous tax hikes in his previous proposal, the President proposed an eerily similar and entirely flawed budget plan. This massive spending and debt package stands in pitiful contrast to the courage and leadership of House Republicans, who have offered serious budget proposals that reduce the government burden, grow the economy, and address the nation’s debt crisis.
- Wheeling and Dealing Doesn’t Hide a Tax Hike: Offers the same foolhardy budget deal that has allowed Democrats to put Republican fingerprints on tax hikes in the past. Mirroring the deal offered by Congressional Democrats in 1982, President Obama proposes $3 in spending cuts for every $1 in tax hikes. In every instance this deal has been proposed in the past, the taxes have been real while the spending restraint never materializes.
- Fails to Actually Address Spending Failures: The President proposes a “Debt Failsafe” trigger that does not go in effect for another three years, would only be triggered if debt is not projected to decline and would exclude considerations of the actual drivers of debt, the entitlement programs. This "trigger" assures politicians they can keep spending since tax hikes are a foregone conclusion.
- Reality Requires Realistic Assumptions: The President’s deficit projections as a percentage of GDP rely on a massive tax hike in taking place in 2012 and the continued imposition of the two dozen new taxes in Obamacare. Without those tax hikes, deficits will be almost triple the level he proposes for his “Debt Failsafe” trigger.
- Refuses to Fix Debt Drivers: The President continues to preach the fallacy that his Independent Payment Advisory Board (IPAB) will control skyrocketing Medicare costs, when in fact the extent of its authority is to advise. The President punts on addressing Social Security as well, reiterating the myth that because the Trustees aren’t required to acknowledge its projected insolvency, lawmakers aren’t either.
- You Can’t Mask More Spending With Calling it a Cut: President Obama refers to “cutting” non-defense discretionary spending to levels consistent with his Debt Commission’s recommendations; this would result in spending averaging far above its historical average of 21 percent in perpetuity.
- Distracting With The Deficit: The President proclaims reducing the deficit by $4 trillion in tax hikes over the next 12 years, paling considerably in comparison to the House GOP Budget, which cuts the deficit by $6 trillion in ten years while cutting both spending and taxes.
The bottom line: the President’s speech is an oath to fiscal cowardice. Rather than govern, the President wishes to hike taxes and punish American families and employers for Washington’s feckless overspending tradition. Measured against the serious reforms proposed by House Republicans this newest proposal from the Obama Administration shows timidity when taxpayers are asking for bold government reform. The President’s speech establishes that the White House harbors no intent to lead the country out of its fiscal hole.