Cutting the federal deficit

Thursday, April 14, 2011 | 2:01 a.m.

President Barack Obama on Wednesday called for shared sacrifice as he outlined a budget plan that he said would cut the deficit by $4 trillion over the next 12 years. Obama drew on the suggestions of his deficit commission and offered a combination of spending cuts and tax increases to deal with the ballooning deficit. A White House official said three-quarters of the president’s plan would come from various reductions and savings with the rest coming from changes in the tax code.

“We have to live within our means, reduce our deficit, and get back on a path that will allow us to pay down our debt,” Obama said. “And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs, and win the future.”

The nation needs an all-encompassing approach to handling the budget. It can’t be dealt with, as the Republicans demand, by eviscerating domestic spending on programs they disagree with and handing out tax breaks for the rich. The president said the nation can cut the deficit without gutting federal health plans and services that Americans have come to count on, but to do that, everything must be on the table for discussion.

Obama said he would reduce spending on defense and domestic programs. He said he would also work to eliminate wasteful spending and increase efficiency to save money, particularly in federal health care programs. He also would end tax breaks and close loopholes that have given the wealthy lucrative benefits.

The tax rate on the rich is the lowest it has been in half a century, the president said, adding that the wealthy certainly could — and most would — pay more. As well, Obama called for simplifying the tax code to make if fair “so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.”

The president decried the costly Bush tax cuts that last year he agreed to extend. He said he did so because it was the only way he could prevent a tax increase on the middle class and vowed not to do it again. Republicans disgracefully refused to extend tax breaks for the middle class without an extension of the Bush tax cuts for the wealthy.

The Republicans’ allegiance to the rich, not to mention their demands that the president acquiesce to their desires, will be troublesome in the debate over the deficit. Rep. Paul Ryan, chairman of the House Budget Committee, has taken the lead for the Republicans on the issue with the budget plan he issued last week. He complained that the president’s plan was “excessively partisan, dramatically inaccurate, and hopelessly inadequate.” He should know — that description fits his plan.

The two proposals couldn’t be more different. Ryan’s plan puts the burden of cutting the deficit on the poor and middle class while benefiting the rich. As the president noted, it would give the wealthiest Americans a tax break of more than $200,000 a year and, at the same time, increase seniors’ Medicare costs by more than $6,000 a year.

Republican leaders in Congress defended tax breaks for the wealthy — the “job-creators” — as necessary for the economy. But trickle-down economics doesn’t work. It’s galling that they would revive failed policies and call themselves fiscally responsible. But they have been disingenuous throughout the debate.

For example, Republicans have tried to hang the blame for the deficit on Obama and the Democrats. However, the budget surplus George W. Bush inherited from Bill Clinton quickly evaporated after Bush launched two wars and offered lucrative tax cuts for the rich — without paying for them. That sent the deficit skyrocketing. Now, the interest payments on the money the country has borrowed threaten to eat up the budget.

The nation doesn’t need any more of the Republicans’ foolish ideology. It needs a serious debate and a balanced approach on the deficit, and Obama opened the way to that with his plan.