The White House is joining the deficit reduction derby.
The president will offer his own budget plan this week, senior White House advisor David Plouffe said on Sunday talk shows. The announcement comes four months after a flurry of budget blueprints, including one sponsored by the president's own deficit commission, and one week after Rep. Paul Ryan put forth his own bold conservative plan.
Plouffe's broad description recalls a familiar centrist formula: Liberal causes, such as for higher taxes on the rich, in exchange for liberal sacrifices, such as cuts in health care and education spending. Although the president's health care law is projected to reduce the deficit over the next decades, Plouffe said the White House will seek further cuts in medical spending, the primary driver of our long term debt:
"As he said previously, his health care law is $1 trillion in deficit reduction over the next two decades, but we have to do more there. We have to look at more spending here, carefully. As he said, we have to use a scalpel not a machete. And, obviously, this is a distinction with the congressional Republican plan that was announced this week."
The president's budget will be viewed and critiqued as a direct response to conservative efforts to whittle at entitlements and discretionary spending. On television, Plouffe slammed Ryan's budget, which called for the transformation of Medicare and Medicaid. From the New York Times
He said the Republican plan "would give the average millionaire $200,000 in tax cuts" but double the health care costs of senior citizens "$6,000 a year down the road" and trim "energy investment at a time of record gas prices."
The White House blueprint should be measured by two yardsticks --first, its ability to reduce deficits in the next decade, and second, its ability to reduce health care costs in the next decades. This is an important and often overlooked distinction. Ryan's plan, for example, is perhaps the most radical deficit reduction in history ... but only when you give it a few decades to work its magic on Medicare costs. The Congressional Budget Office found that it would increase the deficit against existing law by 2020 by cutting taxes faster than it cuts spending in the next few years.
I expect the White House to be more aggressive about deficit reduction than Ryan in the next ten years, since the Treasury has said it will put serious defense cuts and tax increases on the table, both of which Ryan eschewed. I do not, however, expect the White House to propose health care changes that would overhaul their overhaul, nor do I expect the White House to take a machete to Social Security, an issue left out of Ryan's plan, as well.
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is a staff writer at The Atlantic,
where he writes about economics, labor markets, and the media. He is the author of Hit Makers