In a two minute TV ad released this week, Obama talks about his second term plan in four parts. Item number four, he explains, is a "a balanced plan to reduce our deficit by $4 trillion over the next decade. On top of the $1 trillion in spending we've already cut, I'd ask the wealthy to pay a little more. And as we end the war in Afghanistan, let's apply half the savings to pay down our debt and use the rest for some nation-building right here at home." Here's the ad (the relevant section starts around the 1:25 mark):
A couple problems with this claim. For starters, he has not actually cut spending by $1 trillion already: Instead, he agreed last summer to a debt ceiling deal that led to a "sequestration" process which lets future spending increase a little more slowly than previously planned over the next decade. But over that period, spending still goes up. McClatchy explains:
Federal spending totaled $3.6 trillion in fiscal 2011, the period that ended Sept. 30, 2011, according to the nonpartisan Congressional Budget Office. This fiscal year, which ends Sunday, total spending is expected to decline to $3.56 trillion, and decline further to $3.554 trillion next year.
But those two brief cuts total just $49 billion over the two years – well short of $1 trillion. And after that, spending starts to rise again, and by 2015 should again top the 2011 figure. By the end of the 10-year period in 2021, the CBO projects federal spending of $5.5 trillion.
Here's what those supposed "cuts" actually look like, via Reason econ columnist Veronique de Rugy:
And guess what? President Obama has made it very clear that he does not want to go through with this particular future spending reduction at all. As UPI notes, the White House budget office recently released a report which "repeated the administration's insistence that President Barack Obama 'stands ready to work with Congress' to find ways to avoid sequestration."
As for his $4 trillion deficit reduction plan (fitting, given that he's run $1 trillion-plus deficits now for four years run), well, it's true that he has proposed $4 trillion worth of budget gimmicks and tax hikes.
That $4 trillion in deficit reduction takes credit for nearly a trillion dollars in pared back war spending that is already scheduled to happen. The Medicare cuts called for by the plan are of the dubious slashing-provider-reimbursement variety that Congress has had serious trouble maintaining before and that the administration has already put the brakes on in one instance. The plan plays games with the budget baseline, counts $800 billion in debt payments as a "spending cut," and cleverly spreads is deficit reduction out over 12 years rather than the industry-standard 10 year window in order to meet the $4 trillion threshhold but make the early cuts — the ones he'd actually have to oversee as president — quite a bit smaller.
As The Washington Post's Fact Checker Glenn Kessler wrote earlier this month, "virtually no serious budget analyst" buys the president's $4 trillion deficit reduction figure, and "most of Obama's claimed deficit reduction comes from his proposed tax increases."
Budget gimmicks and tax hikes: That's Obama's version of a balanced plan.