Earlier today (at NewsBusters; at BizzyBlog), I noted how several reports from the Associated Press, aka the Administration’s Press (here, here, and here) buried the major news about President Obama’s opening demand to Congress over resolving the “fiscal cliff” of tax hikes scheduled to take effect on January 1. His demand for $1.6 trillion in tax increases over the next ten years is twice what he sought during the August 2011 debt-ceiling negotiations. You have to go to middle or near-ending paragraphs to get that from the three AP reports linked above.
Those three reports also each contain an additional paragraph which allows the administration’s misstatement of its alleged “balance” between tax increases and reductions in projected levels of spending (falsely characterized as “cuts”) to stand unchallenged:
Carney said the ($1.6 trillion tax increase) figure, combined with $1.1 trillion in spending cuts already signed into law, would reduce deficits by $4 trillion.
Besides the obvious problem of “Where’s the other $1.3 trillion?” (the tax increases and spending “cuts” only add up to $2.7 trillion) — which is not explained in any of the three AP items cited — it would appear that the President is proposing to get 40% of the deficit reduction ($1.6 tril divided by $4.0 tril) from tax increases, and the other 60% from spending “cuts.”
Wednesday morning, James Pethoukoukis at the American Enterprise Institute explained why the mix is really almost three-quarters tax hikes and one-quarter spending cuts, and effectively solved most of the “mystery” of the “missing” $1.3 trillion:
European-style austerity: Obama’s new ‘balanced’ debt plan is 73% tax hikes
… according to Obama’s math, his “balanced” plan cuts the projected cumulative debt by $4.4 trillion over ten years with 36% of the reduction coming from $1.6 trillion in tax increases — 80% from wealthier Americans, 20% from business. So, basically, $2 in spending cuts for each $1 in tax hikes. “Balanced.”
… (quoting “the bipartisan Committee for a Responsible Federal Budget”) However … counting the ($1.1 trillion in) war savings is counting a policy that is already in place and is thus a gimmick to be avoided. Taking out the war savings and savings from the discretionary cuts in the Budget Control Act leads to total savings of less than $2 trillion.
(returning to Pethokoukis’s commentary) Of the supposed savings, then, $1.6 trillion comes from tax hikes and $577 billion comes from spending cuts, not counting saved interest. So 73% of the savings comes from taxes, 27% from spending cuts. That’s $3 of tax hikes for every $1 of spending cuts.
Even if you include interest savings, 60% of the debt reduction comes from tax hikes. Obama is making the exact mistake Europe is making by employing a tax-hike heavy version of fiscal austerity.
The only questionable point is whether Obama is making a “mistake,” implying that he’s doing the wrong thing believing that the government and the economy will be better off under his approach, or whether it’s a deliberate policy choice driven by other considerations (politics, class envy, “revenge“). Evidence continues to point to it being the latter, and therefore not a “mistake.” The folks at AP, particularly reporters Ken Thomas and David Espo, authors of two of the three items noted above, appear to be only too glad to cooperate in any deception which furthers that aim.
Cross-posted at NewsBusters.org.