Clarke Dryden Camper is Senior Vice President, Head of Government Affairs and Public Advocacy at NYSE Euronext, a...
Responding to critics who suggest he has not been aggressive or detailed enough in fighting the budget deficit and national debt, President Obama announced a plan to cut the deficit by $4 trillion over the next 12 years, while also “making the investments we need to win the future.” The Obama plan calls for “shared sacrifice from all, including the most fortunate Americans” – a reference to his desire to allow the recently-extended Bush tax cuts to expire.
Among the key components:
• Spending: The Obama plan promises $3 in spending cuts for every $1 of revenue increases from tax reform. Spending reductions would include $770 billion in savings by 2023 in non-security discretionary spending; $400 billion in security-related spending by 2023; and a “debt failsafe” that will “trigger across-the-board spending reductions” if the debt-GDP ratio is not stabilized by 2014.
• Entitlements: To curb Medicare growth, the Obama plan would “strengthen the Independent Payment Advisory Board” created under the health care bill to enable it to “ensur[e] that Medicare spending growth does not outpace our ability to pay for it over the long run.” Under Medicaid, the plan would reform “federal-state partnerships to strengthen Medicaid and promote simplicity, efficiency, and accountability.” President Obama also called on governors to “make recommendations for ways to reform and strengthen Medicaid.”
• Taxes: In addition to allowing the Bush tax cuts to expire for the wealthiest Americans, the Obama plan calls for “comprehensive tax reform” to produce a simpler system with fewer loopholes that is “not rigged in favor of those who can afford lawyers and accountants to game it.” The corporate tax rate would also be cut using savings gained by “eliminating loopholes, reducing distortions and leveling the playing field.”
In contrast to President Obama’s goal of reducing the deficit by $4 trillion over 12 years, the budget blueprint recently released by House Budget Committee Chairman Paul Ryan would cut spending by $6.2 trillion over the next 10 years and reduce the deficit by $4.4 trillion.