WASHINGTON — President Barack Obama got some of the major points wrong when he unveiled his plan to curb projected federal budget deficits.
Here's what he said Monday, and how it was wrong.
OBAMA: "Today, I'm releasing a plan that details how to pay for the jobs bill while also paying down our debt over time."
TRUTH: The national debt would increase every year under his plan.
According to White House figures, the debt held by the public would increase from $10.2 trillion this year to $17.5 trillion in 2021.
According to the Republican staff of the Senate Budget Committee, gross debt — which includes not just debt held by the public but also that held by federal agencies — would increase from $14.9 trillion to $24.6 trillion.
OBAMA: "It's a plan that reduces our debt by more than $4 trillion."
TRUTH: As noted, the plan doesn't reduce debt. Assuming that the president misspoke and meant to say the plan would cut projected DEFICITS by $4 trillion over 10 years, that's also wrong.
First, his plan totals $3.6 trillion in proposed tax increases, spending cuts and interest savings. To get to a figure of more than $4 trillion, he counts the $1.2 trillion in spending cuts already enacted over the summer.
Second, while he counts the $866 billion in added revenue from letting the Bush tax cuts expire for incomes above $200,000 as he proposes, he doesn't count the cost of extending the Bush tax cuts for incomes below $200,000, as he also proposes.
That would add about $2 trillion to the deficit over 10 years, according to an analysis last year by the Congressional Budget Office, and would cut his claim at least in half.
OBAMA: "This plan cuts $2 in spending for every dollar in new revenues."
TRUTH: His claim works only if you count the $1.2 trillion already cut earlier this summer. Any way you add up the numbers of only the plan unveiled Monday, the statement is erroneous.
The president is correct only if you count as spending reductions the $1.2 trillion cut earlier, $580 billion in new spending cuts, $1.1 trillion saved from the planned withdrawal of troops from Iraq and Afghanistan, and $430 billion in lower interest costs. That's $3.3 trillion, or more than twice the $1.5 trillion in tax increases.
He's wrong if you don't count the spending cuts already enacted. Then all the other cuts total $2.1 trillion, or about $1.40 in cuts for every $1 in tax increases.
He's wrong if you also don't count the interest savings. Then his cuts total $1.7 trillion, or about $1.12 in cuts for every $1 in tax increases.
And he's wrong if you don't count the $1.1 trillion saved by withdrawing troops as planned. Then his cuts total $580 billion, or about 39 cents in cuts for every $1 in tax increases.
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