Obama's Sequester Math: $300 Billion In New Revenues Called 'Spending Cuts'

When President Obama put out his "balanced" plan to avoid the automatic sequester cuts, no one noticed. His "plan" ended up being a list of numbers with little to back them up. He balanced plan actually counts hundreds of billions of new revenues from taxes, fees and rebates a "spending reductions."

Posted 02/28/2013 07:01 PM ET
Investors

Budget: When President Obama put out his "balanced" plan to avoid the automatic sequester cuts, no one noticed. Which is probably just as well for Obama, given how embarrassingly unbalanced it is.

Last week, New York Times columnist David Brooks wrote about how Obama "hasn't actually come up with a proposal to avert sequestration, let alone one that is politically plausible."

Turns out, Obama did have one, although Brooks can be excused for not knowing it, since the administration hasn't exactly been promoting this so-called plan.

That, too, is understandable, since it isn't a plan at all, just a list of numbers with little to back them up.

There are no details, for example, about the $200 billion in cuts to defense and domestic discretionary programs, other than that Obama wants them split evenly.

And while he offers $400 billion in "health savings," 30% are lumped in a bucket labeled "other."

Worse, Obama's "balanced" plan actually counts hundreds of billions of new revenues from taxes, fees and rebates as "spending reductions." Examples:

• His plan to "strengthen" unemployment insurance is labeled as a cut, but it's really a $50 billion tax hike.

• The $35 billion from the federal worker retirement programs involves boosting worker contributions.

• Most of the $35 billion in Medicare savings comes from charging wealthy seniors more.

• The $140 billion in "reduced payments to drug companies" are in fact rebates Obama wants drugmakers to pay Uncle Sam for selling drugs to poor seniors.

• Then there's the $45 billion in spectrum fees and asset sales that Obama lists as spending reductions.

Viewed correctly, it turns out that more than $300 billion — about a third — of Obama's proposed "spending cuts" are actually revenue increases.

As a result, instead of $1.2 trillion in spending cuts called for by the sequester over the next decade, Obama would add more than $1 trillion in revenues, while cutting outlays only about $600 billion. And much of those aren't real cuts, but tiny reductions in projected spending growth over the next decade.

And in the end, his plan, such as it is, will do nothing to forestall the nation's oncoming debt crisis.

After four years, Obama's unseriousness as a president continues to surprise us.

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