Obama Announces Long-Term Budget Deficit Plan

By Chuck Sudo in News on Apr 14, 2011 3:35PM

With the House set to vote today on the budget deal that was hammered out last week, the focus and rhetoric in Washington shifted yesterday to the subject of long-term deficit reduction. President Obama unveiled his plan for cutting $4 trillion from the deficit over the next 12 years through a combination of budget cuts, tax hikes on the wealthy, cuts to the Pentagon's budget and reforms to other entitlement programs, with a final goal of reducing spending by three dollars for every dollar of new tax revenue generated.

The president framed his plan in the forceful "Candidate Obama" rhetoric during an appearance at George Washington University:

"Now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s. We have to live within our means, reduce our deficit, and get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs and win the future."

The President's plan also includes a “debt fail-safe” trigger that mandates Congress pass across-the-board budget cuts if the debt ceiling isn't on a downward path by the second
half of the decade, in the possibility — likelihood? — that a deal can't be reached.

The GOP doubled down on the proposed "Path to Prosperity" plan proposed by Wisconsin Rep. Paul Ryan. That plan audaciously proposes to reduce unemployment to 6.4 percent next year and a pie-in-the-sky 2.8 percent by 2021. One of the more dubious aspects of Ryan's plan is a repeal of all portions of last year's health care law., which would revamp Medicare and leave 32 million more people uninsured by 2019. Obama drew a line in the sand on Medicare and Medicaid and Ryan's proposed overhauls as more attacks on entitlement programs that have been in place for close to 70 years.

[Ryan's plan is] a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. Who are these 50 million Americans? Many are somebody’s grandparents -- may be one of yours -- who wouldn’t be able to afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some of these kids with disabilities are -- the disabilities are so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.

Still uncertain is whether Friday's budget deal will have enough GOP support. Indiana Rep. Mike Pence has already said he may not vote in favor of the budget deal. Local Tea Party activists believe the budget deal doesn't go far enough in its cuts and are already angry with it. The deal itself only results in minimal effect on outlays and spending before the end of the fiscal year. House Speaker John Boeher recognizes he has some more work to do, but what compromises he can reach could spell an alliance between the House GOP and its Tea Party allies more delicate than it is already.