Obama’s deficit plan is more conservative, less ambitious than Simpson-Bowles
In my previous post, I mentioned the Committee for a Responsible Federal Budget’s effort (pdf) to produce an apples-to-apples comparison between the Obama plan, the Ryan budget and Simpson-Bowles. They find that over the next 10 years, the president’s plan saves about $2.5 trillion, while Ryan and Simpson-Bowles both save about $4 trillion (this leaves out the Obama plan’s trigger, which theoretically forces higher savings than the plan achieves under CRFB’s model). But let’s leave Ryan out of this for a moment, in part because his plan is based on some assumptions that aren’t credible, and in part because I want to make a different point.
Superficially, the Obama plan and Simpson-Bowles are very similar. So I called Marc Goldwein, policy director at the Committee for a Responsible Federal Budget, to better understand where they diverge. His numbers surprised me. The White House’s plan is, if anything, substantially more conservative than the Simpson-Bowles framework. Here’s how it breaks down:
Over the next 10 years, Obama cuts $600 billion less from defense and $250 billion less from health care. He raises taxes by $450 billion less, and because Simpson-Bowles includes a Social Security reform while Obama merely calls for Social Security talks, he gets $300 billion from that pot. So of the $1.5 trillion difference, about a trillion dollars come from Obama’s more modest defense cuts and tax increases — both of which are normally understood as liberal priorities — while the remainder is a mix of Social Security and health-care reforms, some of which conservatives like, some of which liberals like.
You can take this information in a couple of different directions. It shows, for instance, how dependent policy analysis is on rhetoric and symbolism. The Simpson-Bowles report was greeted as a centrist document, while Obama’s plan was seen as a confrontational, Democratic proposal that relied almost exclusively on tax increases. In fact, it was less reliant on tax cuts than Simpson-Bowles. It also shows, depending on your perspective, either a relative lack of ambition on the White House’s part or a sensible judgment that the deficit can be attacked more gradually.
But no matter your take, it underscores the point I made in my earlier post: the White House has come out with not only a centrist proposal, but a proposal that is a bit to the right of the leading centrist proposal. The Republicans, meanwhile, have produced a document that’s much, much further to the right than either the Obama plan or Simpson-Bowles. The two parties are taking very different approaches to addressing the deficit, and that’s not something I think the commentary — including, perhaps, mine — has done a good job reflecting.