Did Obama Offer Budget Cuts?

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JONATHAN CHAIT JULY 13, 2011

Did Obama Offer Budget Cuts?

The conservative line of the moment holds that the Republicans are the real fiscally responsible party, because President Obama’s proposed budget cuts have not come in the form of official legislation. Here’s National Review’s editorial today:

House Republicans passed a budget that cuts spending, including entitlement spending, even though many Republican voters objected. President Obama, meanwhile, first proposed a budget that even Senate Democrats rejected as unserious, and then gave a speech outlining a second budget but failed to follow up by submitting an actual proposal. Only Senate Democrats performed worse; they have not enacted a budget in more than two years.

Obama is at it again, saying fine things about cutting trillions of spending without making any public disclosure of what specifically he would cut.

No public disclosure? I could swear I’ve been reading things like this:

Option 1: The Harry Reid proposal:

  • “Some” discretionary cuts

  • No changes to entitlements

  • No changes on the taxes

  • Total savings: less than $1 trillion

Option 2: The Obama/Biden framework:

  • Discretionary cuts: $1.1 trillion

  • Mandatory cuts: $500–$700 billion (about $340 billion in health care, $260–$330 in other mandatory)

  • Interest savings: about $300 billion

  • “Modest” changes to Medicare (e.g., means testing, increase in co-pays)

  • No changes to Social Security

  • Some revenue neutral tax reforms

  • Total savings: about $2 trillion

Option 3: “The Big Deal”

  • Discretionary cuts: $1.2 trillion

  • Slightly more significant changes to Medicare (e.g., increase retirement age, means testing, benefit structure)

  • Social Security Consumer Price Indexing (CPI)

  • “Massive” future savings in out-years

  • De-coupling Bush tax rates on upper income brackets

  • $1 trillion in “new revenues”

  • Comprehensive tax reform, to be completed by agreed upon date

  • Total “savings” (with tax increases): about $4 trillion

My source is National Review.

Eric Cantor’s office has been distributing even more detail about these cuts.

Now, it is true that Obama’s proposed cuts contain varying levels of specificity -- some being highly specific (like the chain CPI or raising the Medicare retirement age) and others being less so (like cutting the domestic discretionary budget.) It’s also true that these cuts are phased in slowly. But both these criticisms apply equally to the House Republican budget, which NR and other conservatives hold up as the model of fiscal seriousness.

Laying out one’s plans in a party-line vote like the Paul Ryan budget is a useful exercise in informing the public about the party’s aspirations. But under divided government it does nothing at all to reduce the deficit. If a party is only willing to reduce the deficit under its own ideological terms, then it’s not actually willing to do anything about the deficit. The only deficit reducing program that can pass is one that makes policy compromises. And the indisputable fact is that Obama has proposed such compromises, and Republicans haven’t.

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posted in: jonathan chait, the harry reid, medicare

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