Obama’s Debt Reduction Plan

On Wednesday, President Obama will present his debt reduction plan to a university audience.

According to The New York Times, the President will urge Republican lawmakers to join him in finding ways “to raise revenues and reduce the growth of popular entitlement programs.” However, the administration’s proposal will likely differ dramatically from the one House Republicans proposed last week. That plan focused on shrinking Medicare and Medicaid, but largely spared defense spending.

President Obama’s plan “would include tax increases for the richest taxpayers, cuts to military spending, savings in Medicare and Medicaid, and unspecified changes to Social Security.”

Like many of President Obama’s policy initiatives, the speech will likely sound reasonable and pragmatic, but vague. However, actual administration policy will likely uphold traditional Democratic entitlement programs, while pushing for tax increases on the “wealthy.”

Several weeks ago, the President used a similar bait and switch on his energy policy. What sounded in his speech like a reasonable bipartisan effort to increase domestic drilling and develop alternative technologies turned out in the more detailed policy document to be the same old Obama plan dressed in new clothing (See my article on Breitbart’s Big Peace site for more details).

That said, the American people should listen to the President’s speech with open minds. However, they should also scrutinize his more detailed policy proposal after that speech.

I suspect the speech will be inconsistent with the more detailed policy document. I hope I am wrong.

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About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, Finance and Economics, Policy, Politics, Predictions, Social Security and tagged , , , . Bookmark the permalink.

10 Responses to Obama’s Debt Reduction Plan

  1. Scott Erb says:

    I rarely listen to speeches from politicians because they almost always are what you describe — vague and not consistent with the details (this is true for both Republican and Democratic Presidents in recent years). But I am hopeful that the details will show a level of seriousness that moves us forward. Rep. Ryan is also criticized for similar vagueness (especially on Medicare). But you gotta start somewhere.

  2. Pingback: Obama's Debt Reduction Plan | Reflections of a Rational Republican | Debt Reduction Tips :: Helping You Pay Off Debts

  3. Alan Scott says:

    Scott,

    I don’t know if your side truly grasps the magnitude of our deficit problems . Mandatory spending is entitlements . 4 years ago total federal revenues exceeded entitlements by % 1.1 trillion . The current fiscal year’s revenues are less than the mandatory spending . Even if you cut the military and every other expense to nothing, you still have a deficit .

    That is why we can no longer afford the total BS . If we keep with the BS, we will be Portugal . Portugal can’t even afford a $ 5 million fine the EU assessed it over some contracting law issue

  4. pino says:

    President Obama’s plan “would include tax increases for the richest taxpayers,

    I wonder if he understands the difference between “higher taxes” and “higher revenue”?

    I understand that not many, if any, tax cuts pay for themselves in actual increased revenues from the group cut, but the benefit to the overall economy shouldn’t be understated.

    cuts to military spending,

    I think the Republicans should take this one away from him and suggest those cuts themselves. Certainly the Pentagon is an organization just as susceptible to bloat and excess as any other.

    savings in Medicare and Medicaid, and unspecified changes to Social Security.”

    I’m a little leary of the specific language when it comes to taxes and military and then the wishy washy-ness of this one.

    I suspect the speech will be inconsistent with the more detailed policy document. I hope I am wrong.

    I suspect you are right.

    • I think the only way the country can fix the debt problem is to have a binding and bipartisan debt commission. Three Democrats and three Republicans come up with one plan and Congress either votes up or down.

      No riders, no earmarks.

      It is that simple.

  5. Alan Scott says:

    I believe you have to look at what each political party has built it’s power on . Democrats power is built on entitlement spending . They demonize American business and demonize the rich . They know their political base has no clue about economics . They know that class envy works among the young and the ignorant .

    Only at the State level, where you have interstate competition for businesses and wealthy taxpayers do one or two Democratic governors , get it . The war is being won at the State level . Washington will be a lot slower .

  6. Scott Erb says:

    The Democrats no more demonize the rich than the Republicans sneer down their noses at the poor. Such views of each party are caricatures created by talk radio jocks and emotion-driven “politics as spectacle” folk who want to make it seem like politics is a version of world wide wrestling. I really think there is a case for common ground — if the Republicans would recognize the need for tax increases and Democrats the need for entitlement reform, there could be a lot of progress. President Obama has the chance to grab this issue and show leadership. Then the Republicans will have the chance to respond. I hope they can do it — and that we can recognize that conservatives, liberals, libertarians, greens and almost all of us really do want what’s best for the country. Leave the demonization to talk radio jocks who want to make money by using emotion to drive up ratings.

  7. Alan Scott says:

    Scott,

    ” if the Republicans would recognize the need for tax increases ”
    Do you believe that raising taxes on the rich has no economic downside ? Do you believe raising taxes on American corporations has no economic downside ?

  8. Scott Erb says:

    Any economic downside of increasing taxes on the wealthy would be more than offset by the need to reduce the deficit. Moreover, one can make an argument on the economic downside of budget cuts — for thirty years we’ve been stimulating the economy by spending more than we take in. That’s unsustainable. From 1980 to 1990 government debt went from 30% of GDP to 60% of GDP, and private debt started to skyrocket too. We had an illusion of prosperity that continued with ‘bubble economies’ in the 90s and 00s. Now we have to pay the price.

    The economic impact of paying the price is about the same whether in budget cuts or increased taxes. But because the very wealthy have benefited the most from this 30 year consumption binge (income for the top 1 percent is up 291%, for the top 20% it’s up 95%, for the middle 20% it’s up 25%, and for the bottom 20% it’s up only 16% in 30 years), the ramifications of using budget cuts to pay for all of this would have very high social costs, and probably harm the middle class the most. Having the wealthiest pay a fair amount alongside real budget cuts, including entitlement reform would solve the problem — and require both parties to give up one of their sacred cows. That’s the only way to do it.

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