Obama deficit reduction plan leaves deficits

Obama will announce goal of reducing deficit by $4 trillion over 12 years CBS

Obama discusses his deficit reduction plan, April 18, 2011.
CBS
Even if every provision of President Obama's deficit reduction plan is enacted - and he concedes it won't be - there still won't be a balanced budget on the horizon. And the National Debt will continue to expand by trillions of dollars.

The Obama plan is designed to reduce deficit spending over the next 12 years by $4 trillion dollars. If every penny of that $4 trillion in deficits is eliminated, the government's own budget projections show that trillions of dollars more in deficits would remain in place.

Obama's goal: Cut deficit by $4T over 12 years

Budget totals issued by the Office of Management and Budget (OMB) in February project 10 years of deficits totaling $7.2 trillion between 2012 and 2021. Another two years at that rate would bring the 12 year total to $8.6 trillion.

The Obama 12-year plan would cut the projected deficit total in half, but would leave another $4 trillion in deficits that would be added to the National Debt, which now stands at $14.27 trillion.

Separately, OMB expects the Debt to double over the next ten years to a mind-boggling total of $26.3-trillion in 2021. It's estimated the Debt that year would cost U.S. taxpayers $928-billion in interest payments. Four trillion dollars in deficit reduction would reduce the Debt to just over $22-trillion, and still inflict $700-billion in interest on the federal budget.

Mr. Obama has made a point of designating some programs as sacred cows that he puts off limits to budget cuts.

"I will not sacrifice the core investments that we need to grow and create jobs," he said in his 44-minute speech at George Washington University.

(Watch the speech in full at left.)

By that he means programs funding education, clean energy technology, construction of roads, airports, broadband access and medical research. He also reaffirmed his commitment to Social Security, Medicare and Medicaid.

Is Social Security on the table as Obama, Congress tackle the deficit?

Mr. Obama also made his case for raising taxes on the rich.

"I don't need another tax cut. Warren Buffett doesn't need another tax cut. Not if we have to pay for it by making seniors pay more for Medicare."

It's on: Obama takes iron fist to GOP

But top Republicans are adamant in their opposition to any tax hikes. House Speaker John Boehner said he made it clear to Mr. Obama in their meeting this morning that raising taxes cannot be part of any deficit reduction program Republicans will embrace.

"Washington has a spending problem," said Boehner, "not a revenue problem."

Take politics out of that assertion and it's undeniable that America has both problems. No one can say the government couldn't use more revenue.

Both economic and political considerations will play a role in what parts if any of the president's proposals are enacted.

But for the moment, he's done what a president seeking re-election needs to do. He's on the scoreboard with a deficit reduction plan that pursues its objective on his terms. If it goes nowhere, he's gets to blame Republicans.

Did Biden fall asleep during Obama deficit speech?

  • Mark Knoller On Twitter»

    Mark Knoller is a CBS News White House correspondent.

Comments

CBSN Live

pop-out
Live Video

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.