Obama’s Many Plans, Sharpening Rhetoric Complicate Hill Agenda

Author: Market News International | Category: News

–President’s New Deficit Plan Cheers Hill Dems, Angers GOP
–Hill Democrats Praise Plan’s Focus On ‘Balanced’ Deficit Cuts
–Republicans Say Obama Has Offered A Tactical, Political Plan

By John Shaw

WASHINGTON (MNI) – President Obama’s revamped fiscal plan that
identifies more than $3 trillion in budget savings over a decade is
winning the praise of congressional Democrats as a clear affirmation of
their party’s fiscal philosophy while Republicans say the new package is
a political plan replete with gimmicks and dubious fiscal claims.

Obama’s new deficit plan comes on the heels of his fiscal year 2012
budget that was unveiled in February, a revised budget that was
presented in April, a raft of deficit cutting ideas that were offered
during debt limit talks this summer, and a $447 billion jobs package
that was offered last week.

Even most budget experts are unclear if any of the ideas the
president outlined Monday are new ones or updated versions of proposals
offered earlier this year.

Obama’s plan seeks $3.2 trillion in 10 year budget savings, about
$1.5 trillion of which would come additional revenues. Of this sum,
about $800 billion would come from allowing the Bush tax cuts to expire
for those making over $250,000 and about $700 billion would come from
closing tax loopholes and eliminating various deductions and credits.

The President’s plan would also claim more than $1.1 trillion in
savings by winding down the wars in Iraq and Afghanistan.

The Obama package will also include about $580 billion in
entitlement savings. Of these savings, about $248 billion will come from
Medicare reforms and $65 billion from Medicaid adjustments.

As the result of this package, the nation’s debt service costs
would decline by $430 billion, the administration officials said.

Obama said this new package of more than $3 trillion in budget
savings is coupled with the $1.2 trillion in savings from this summer’s
debt ceiling agreement, and the total budget savings come to well over
$4 trillion over a decade

Obama also argued that tax reform should be guided by the “Buffett
Rule” which contends that people making more than $1 million a year
should not pay a lower tax rate than those in the middle class.

“This isn’t class warfare. It’s math,” Obama said.

Senate Majority Leader Harry Reid Tuesday praised Obama’s new plan
as a fair package that will help the middle class.

House Speaker John Boehner Monday said Obama’s new plan is not a
“serious contribution” to deficit reduction efforts. He blasted the
president for seeking new revenues rather than focusing on spending
cuts.

Boehner called Obama’s revenue proposals a “job crushing tax hike
that will hurt small businesses and create an even worse environment for
private-sector growth.”

Senate Minority Whip Jon Kyl called Obama’s new plan “demagogic”
and little more than a “campaign document.” He said the plan will
attract little interest in Congress’ deficit reduction panel.

“I’m concerned it might be unhelpful,” Kyl said.

“The good news is that the joint committee is taking this issue far
more seriously than the White House,” said Senate Minority Leader Mitch
McConnell.

Congress’ deficit reduction panel will convene again Thursday to
continue its work.

The Joint Select Committee on Deficit Reduction is charged to
submit a report to Congress by Nov. 23, 2011 that reduces the deficit by
$1.5 trillion between 2012 and 2021.

The final package, if one is agreed to by the majority of the
panel’s 12 members, must be voted on without amendment by the House and
Senate by Dec. 23, 2011.

If the panel fails to agree on a spending cut package or Congress
rejects its plan, a budget enforcement trigger would secure $1.2
trillion in budget savings through across-the-board cuts.

The cuts would be equally divided between defense and non-defense
programs but would exempt Social Security, Medicaid and low-income
programs.

** Market News International Washington Bureau: (202) 371-2121 **

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