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Clinton speech has some arithmetic issues
Former President Clinton blasted the budget plans of GOP candidate Mitt Romney on Wednesday night for lacking details and failing basic math, but his speech relied on some budget gimmicks as well.
Clinton touted President Obama’s 2013 budget proposal as a “reasonable” approach to the deficit and tried to link it to the bipartisan plan of Obama’s 2010 deficit commission.
“He has offered a reasonable plan of $4 trillion in debt reduction over a decade, with $2.5 trillion coming from — for every $2.5 trillion in spending cuts, he raises a dollar in new revenues, 2.5 to 1,” Clinton said.”
“That’s the kind of balanced approach proposed by the Simpson-Bowles commission, a bipartisan commission. Now, I think this plan is way better than Governor Romney’s plan. First, the Romney plan fails the first test of fiscal responsibility: the numbers just don’t add up,” he said.
Clinton was repeating Obama White House figures for the latest Obama budget, but those figures have come under scrutiny from independent deficit hawks as well as Republicans since February.
President Obama’s budget relied on some assumptions and when those are taken out, the 2.5 to 1 ratio is much different.
For starters, the budget assumes $848 billion in war savings. This is taking credit for not spending money on wars in Iraq and Afghanistan that was never going to be spent in any case.
The Obama budget also counts $1 trillion in deficit savings already achieved in the Budget Control Act of 2011 and reduced interest payments of $407 billion.
As the Center for a Responsible Federal Budget (CRFB) has said, if you add in the same assumptions, the Bowles-Simpson plan would be $6.6 trillion in deficit reduction over 10 years, not $4.3 trillion.
Clinton also did not mention that Obama does not have a plan on record to deal with the long-term growth of the debt in the next decade, mostly fueled by an explosion in Medicare spending due to the aging population.
While the Obama 2013 budget would stabilize the debt as a percentage of the economy, thereby checking its growth in the medium term, it does not to project a balanced budget.
The House-passed budget would balance before 2040 in its own projections. Authored by vice presidential nominee Paul Ryan, the plan would partially privatize Medicare to get savings and make deep cuts to Medicaid and food stamps.
The Ryan plan does differ from the sketch budget outlines from Romney. CRFB has estimated that in its most likely scenario, Romney’s plans would add to the deficit, mainly due to the size of his tax cuts and defense spending. Romney would add $250 billion to the deficit by 2021 in an intermediate scenario and as much as $2.2 trillion if he fails to close enough tax loopholes to pay for his cuts.
Republicans are pointing out that Obama’s budget won no votes in the House and Senate. The situation is more complicated than it seems. As a policy matter, the White House urged “no” votes on spending plans that just used the Obama numbers without the policy language accompanying it.
Politically, getting complete rejection was deemed better than seeing how badly the budget would split liberals, wanting more stimulus, and centrist Democrats, wanting more deficit reduction.
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