The Plan
by digby
CBPP gives a good overview of the president’s plan here. It’s worth reading for both the good points and the bad points. This is the conclusion:
The President’s plan represents an important step forward in the debate. But it should be recognized that this plan is a rather conservative one, significantly to the right of the Rivlin-Domenici plan. While we worry about some particular elements of the President’s plan, we worry much more that the deficit-reduction process that’s now starting could produce an outcome that is well to the right of the already centrist-to-moderately-conservative Obama proposal, by reducing its modest revenue increases and cutting more deeply into effective programs that are vital to millions of Americans.
The “revenue increases” are very dicey in my opinion. They are based on a reformation of the tax code that includes the elimination of middle class deductions like the mortgage interest deduction which is hardly likely to pass, and the closing of corporate loopholes which will be deftly reinstated in new forms by lobbyists. But what strikes me as the strangest thing about it is that it seems to have baked into it the idea that it must also contain lower tax rates, which strikes me as bizarre if the intent is to close the deficit.
I realize that it may make it all more politically enticing to the right, but if they can’t actually raise taxes then the ratio of cuts to revenue is very likely to be far higher than 3:1 when all is said and done. This revenue side of the equation is the major weak spot in all these “deficit” plans. The press should quiz the politicians very, very closely about just what they mean when they sign on to “raising revenue” and ask them why they think it’s necessary to lower rates as part of the package. The answers will be interesting.
Oh, and by the way, the president isn’t counting the 500 plus billion Bush tax cuts not being extended in his figures. I don’t know why.
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