Meet the New Plan, Same as the Old Plan

As Drew noted below, Obama decided to hold our nation's credit rating hostage over the sticking point of making sure he doesn't have to beg for another increase in the debt limit before the elections.

Reid dutifully cancelled the plan he had agreed to, at Obama's insistence.

Reid is now proposing a slightly different plan which will address the only thing that matters to Obama, his personal political fortunes.

In the new plan, Reid suggests giving Obama his $2.5 trillion in debt limit increase -- enough to get President Pissypants through his election -- and comes up with another $1.4 trillion in cuts.

Those "cuts," however, are entirely of the phantom variety -- they are the anticipated savings from no longer fighting the wars in Iraq and Afghanistan. That's actual money we won't be spending, but that is already figured on anyway, and further, that's money that's spent as required, or not spent as not required. Bush had counted that spending off budget, which Obama claimed was deceptive, but it is a fair way to characterize the emergency, special-conditions nature of it. Those expenses were never part of the permanent budget going forward, were they?

So Reid invents $1.4 trillion in "savings" there and adds it to what he's already agreed to cut (about a trillion) and says, "Voila, $2.7 trillion in cuts."

I don't know how that extra 0.3 trillion gets tacked on there -- maybe interest saved by not spending that money. I don't know.

The point is, this is still the same $1 T Biden and his team agreed to a month and a half ago, added to some phantom cuts, to claim that there is a 1-to-1 exchange of cuts and debt ceiling increase.

The only plus here, from our perspective, is no rise in taxes, which I'm not sure I'm even counting as a plus. What I mean is: Low taxes plus high spending forever (and always increasing high spending) is no way to run a country. Something has to give here, doesn't it? Without actually reigning in out of control spending, I'm not sure how much of a victory it is to continue to push the country towards insolvency.

But it's unclear whether this plan could pass, in any event, as liberals are calling it a "cave" by the Democrats because they don't get their precious tax increases.

So, the new plan:

1. Will not have the support of the House's fiscal hawk wing, because its cuts are puny, and mostly imaginary.

2. Probably will not have support of many Democrats, because there are no tax hikes.

3. Apparently only satisfies a single man in Washington, DC -- Barack Obama -- by giving him his debt limit increase and taking it off the table for 2012.

I don't see this new plan going anywhere.

Democrats and the media (but I repeat myself) are calling the savings from "future wars unfought" a legitimate "cut," because that was assumed in the Paul Ryan budget, too.

Um... yeah, this is a little hard to explain, but assuming those wars wind down, yes, we won't be spending as much on them, and so yes, that money should be accounted for somewhere in the budget.

But this isn't really a "cut," and it's definitely not a "cut" within the meaning of the Republicans's one-dollar-of-cuts-for-every-dollar-of-debt-limit requirement.

posted by Ace at 01:49 PM

| Access Comments