Tuesday, September 20, 2011

Obama is campaigning, not leading, with his no-pain debt reduction plan - The NY Daily News

Judging by his combativeness Monday, President Obama has gotten the rhetoric of debt reduction down. As for the actual debt, not so much.

Obama's much-awaited plan for achieving long-term U.S. solvency proved to be less than met the ear. He followed what's becoming a depressingly familiar pattern of trumpeting supposedly hard choices while leaving the politically difficult measures to others.

Raise the Medicare retirement age? Not him.

Obama appears to believe that calling for higher taxes on the wealthy and on upper-income earners while claiming undeservedly to be an aggressive budget cutter will make for good campaigning. That it may, but there is far more for a President to be concerned about than the polls.

The debt is more than $14 trillion. Obama is right to castigate Republicans for ruling out all tax increases because, as the President says, Washington cannot cut its way out of such a deep hole.

At the same time, while Obama is on firm ground in seeking revenue from the wealthy, he is wrong to give the impression that America can tax its way to health without reining in spending more than he has the courage to venture.

The President's proposal to reduce the debt by $4 trillion over a decade fell far short of a critical target set by the bipartisan debt and deficit commission he appointed last year.

That panel projected its own $4 trillion plan would slash the debt to 60% of America's Gross Domestic Product - what the country's economy churns out - while Obama hopes to hold the level to an extraordinarily high 73% of GDP.

Meanwhile, unlike the commission, he counted $1 trillion in savings from ending the wars in Afghanistan and Iraq toward debt reduction, enabling him to dodge delivering some of the bad news recommended by the panel.

Be warned that it is difficult to track how the warring Democratic and Republican forces are calculating their debt reduction numbers.

Suffice it to say that Congress and Obama resolved the debt-ceiling fight by approving $1 trillion in debt reduction and committing to make at least $1.2 trillion more in cuts this year.

Obama starts with the first $1 trillion, seems to endorse only $580 billion of the next batch of cuts, adds the war savings plus $1.5 trillion in taxes, plus lower federal interest payments, and reaches $4 trillion without shrinking the government to any degree.

Most revealing is his no-sweat approach to Medicare. He foresees cutting the program $224 billion by nothing more stressful than "reducing overpayments."

This was a hoped-for reelection road map, not a fiscal strategy.

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