Now, I have to admit my bias, in case you haven't figured it out from my blog so far. I'd like to see a balanced budget within ten years, so I'm going to be critical on anything substantially less than that. I'm going to be on the lookout for funny numbers. Obama's plan triggers some of my alarms.
Obama has debt maxing out at 77% of GDP. That's odd, because I thought it was 100% already and heading higher. He counts only public debt, not what government owes to itself (SS and Medicare funds, probably federal reserve money too).
Cuts are modest at best:
- $257 billion from mandatory spending, mostly cuts in agricultural subsidies
- $248 billion from Medicare
- $73 billion from Medicaid
- Various other small cuts: post office, federal pension contributions, raising certain fees
- $1 trillion savings from not having wars
- Total $1.5 trillion above the $1 trillion in the August debt deal
Even the best part of the plan, tax reform, is less than it appears. Obama plans to let Bush cuts expire for >$200,000 people and reduce deductions for them. That will bring in about $1.1 trillion. The plan also closes various other loopholes for a total of $1.5 trillion.
The reform plan includes talk about "measures to broaden the tax base." This is a current Republican talking point. Perhaps Obama is trying to defuse it, but his use is somewhat misleading. A few more households may be taxed due to closing loopholes in personal income tax. Most of the broadening will be from cutting business tax loopholes. Not a bad idea, and actually a good critique on "broadening the tax base."
This plan will appeal of the left wing of the party, but probably not many others. Having even more people heading to the edge of a party isn't a good prescription for the country, and I doubt that it'll save Obama's reelection prospects. I don't see signs that his "Pass the bill" demands appeal to moderates or independents. It looks like Democrat grandstanding, which is no more charming than Republican grandstanding.
That's too bad, since both the jobs bill and this plan have some good, specific ideas. It's too bad Obama felt he had to go big, but didn't have enough high-quality options to offer.
I can add this budget plans to the other ones I didn't like, such as Rand Paul's and Paul Ryan's. This is better than those, but not as good as Simpson-Bowles, which is the best I've seen so far.