CBS News, Chris Usher, Associated Press
The day after the Greek Parliament approved another round of deep spending cuts in the face of violent protests, President Obama released a budget proposal for the coming fiscal year that offers no real solution to the United States' long-term fiscal problems. This country is hardly Greece, but Washington's current policies put it on a path to accumulate far too much debt. With the U.S. economy improving, it's past time for the administration to lay out a credible plan for bringing the deficit and debt under control. Sadly, Obama's budget proposal shows that he'd rather wait until after the election to have that reckoning.
Congress makes the ultimate decisions about taxes and spending, so the annual budget proposal from the White House typically serves as the opening bid in a months-long debate. This president, however, has waited for Republicans and Congress to go first on the tougher fiscal issues. On Monday, Obama even called on Congress to reverse one of the more difficult decisions it had made, which was to impose $1.2 trillion in across-the-board spending cuts on discretionary programs over the next decade.
In place of those cuts, the president offered a mixture of real steps to reduce the deficit — including nearly $2 trillion in additional taxes over the coming decade, mainly at the expense of high-income Americans — and bogus ones, such as almost $850 billion in "savings" from the previously planned end of foreign combat operations, a chunk of which would be spent on infrastructure and jobs programs. The one bright spot: Obama didn't ignore the rapid and unsustainable growth in health-care entitlements, as he did in last year's budget. Instead, he called for saving about $360 billion over 10 years on those programs, in part by paying drug companies less for medicines prescribed to low-income Medicare patients.
There's little chance this Congress will agree to many, or even any, of those suggestions. Tax increases seem particularly unlikely. But even if lawmakers were to adopt all of Obama's deficit-cutting measures, they wouldn't go far enough to set the budget on a path toward balance. Obama's proposals would stop the debt from growing faster than the economy eventually, but inexorably rising healthcare costs would make the respite temporary. All told, his proposal comes up about $2 trillion short of the savings his own deficit-reduction commission called for over 10 years. The economy may not be ready yet for a stiff dose of austerity, but the government needs a better plan for putting its fiscal house in order than Obama offered Monday.
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