Another Obama Lie -- the deficit reduction plan

While I deny being a masochist, I do have to report that I went to the white House website and read the president's plan for deficit reduction that he unveiled today. It is long and wordy and it supposedly will result in a cut to the deficit of 4 trillion dollars over ten years. The problem with the plan, however, is that the calculation it puts forth is a lie. In actual fact, the Obama plan will result in an increase to the deficit of about a 166 billion dollars. Let me explain:

The key section of the plan is this Obama proposal:

"Allow the 2001 and 2003 high-income tax
cuts to expire and return the estate tax
to 2009 parameters. The tax cuts for those
with household income above $250,000 per
year passed in the Bush Administration were
unfair and unaffordable at the time they were
enacted and remain so today. In December
2010, congressional Republicans insisted on
extending them through 2012 and threatened
to allow taxes to increase on middle-class
families if the Administration did not agree.
Not extending the middle-class tax cuts would
have hurt our nascent economic recovery, and
would have imposed an enormous burden on
working families. The Administration remains
opposed to the extension of these high-income
tax cuts past 2012 and supports the return of
the estate tax exemption and rates to 2009
levels. This would reduce the deficit by $866
billion over 10 years."

So Obama is claiming a credit of 866 billion dollars over ten years if the bush tax rates for the "wealthy" are allowed to expire at the end of 2012. The reality, however, is that these tax rates are already supposed to expire at that time. All of the deficit calculations from the government include that change in the tax rates. In other words, there is NO SAVINGS from the expiration of the Bush tax rates on the wealthy.

Going further, however, we should all remember that the overwhelming bulk of the Bush tax cuts did not go to the wealthy, but to the middle class. These lower tax rates also are scheduled to expire at the end of 2012, but Obama wants to make them permanent. If these rates are made permanent, it will cost the treasury about 3.2 trillion dollars over ten years. Obama, however, IGNORES this added cost that would be the result of his plan.

So, the actual calculation is not a 4 trillion dollar savings as Obama claims. That amoung includes 866 billion dollars of supposed savings that are already in the original budget deficit number. The Obama calculation also omits 3.2 trillion dollars of additional deficits due to making the rest of the Bush tax cuts permanent. When you add all of these together, you find that the Obama plan results in an increase of the deficit of 166 billion dollars over ten years.

How is it possible that the White House can put out such a flawed explanation of its plan? Is is impossible that they do not know that the plan is incorrect. I refuse to believe that the entire White House staff and the president are that stupid. I think it is intentional. They all know that the plan will never be implemented, so they are trying to put forth something that they can use in the campaign rather than thinking of what will help the country. It is outrageous.