Obama Proposes $4 Trillion in Spending Cuts "Over 120 Years"

The theater of the absurd regarding spending cuts hit a new high today. We are now counting budget cuts not over a year, or even ten years, but rather 120 years.

Please consider Obama to propose $1.5 trillion in new tax revenue

The president on Monday will announce a proposal that includes the new taxes, nearly $250 billion in reductions in Medicare spending, $330 billion in cuts in other mandatory benefit programs, and savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan.

The $1.5 trillion in tax revenue would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

By adding the tax revenue, about $580 billion in proposed mandatory spending cuts, the savings from troop withdrawals and $1 trillion in spending cuts already in place, the combined deficit reduction would total about $4 trillion over 120 years.

Whose harebrained idea was it to carry the savings out to 120 years (the Administration or the AP writer?). I suppose it could be a typo for 12 years or 20 years but how about some savings over 1 year?

By the way, we need to ask: Is that $1 trillion troop reduction a budgeted item or it is taking credit for something that was never was appropriated in the first place.

Service Providers Hit

Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017, and administration officials made clear as well that Obama would veto any Medicare cuts that aren't paired with tax increases on upper-income people.

The president's plan also called for cuts of $72 billion over ten years from Medicaid, the federal-state health care program for low-income people and the severely disabled. States, hospitals and advocates for the poor are expected to resist those.

Dead on Arrival

I would like to see a detailed plan as to how $223 billion will be squeezed out of service providers.

However, the question is moot because the entire proposal is likely dead on arrival. Republicans will not agree to new taxes and Democrats will bitch about cuts to Medicare and Medicaid.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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