Fox News covered up President Obama's willingness to compromise in the ongoing deficit negotiations, suggesting that he has put "nothing on the table" with regard to spending cuts. In fact, Obama has offered a proposal to Congress that includes $400 billion in savings to social insurance programs.
Loading the player ...
Fox News Whitewashes Proposed Spending Cuts In Deficit Negotiations
Bob Cusack: On Spending Cuts, "There's Nothing On The Table." On the December 7 edition of Fox News' Happening Now, during a discussion of negotiations between the White House and Republicans on federal spending and budgets, The Hill's Bob Cusack said Obama had put "nothing on the table" in regards to spending cuts. From Happening Now:
HEATHER CHILDERS (guest-host): Let's talk a little bit more about entitlement reforms. As it stands right now, the president's plan, it calls for 1.6 trillion in tax increases. And it roughly doubles what was previously suggested. And 200 billion in new stimulus spending. So what guaranteed cuts is the president offering?
CUSACK: Nothing yet. He put a lot on the table in the summer of 2011. Boehner again, and Obama, they almost got a grand bargain. Raising the Medicare eligibility age to over 67 after a certain amount of time. Making some changes to cost of living. Payments for Social Security. But right now, there's nothing on the table. [Fox News, Happening Now, 12/7/12]
But Obama's Proposal Includes Both Revenue Increases And Spending Cuts
Obama Offered $400 Billion In Cuts To Social Insurance Programs. The Huffington Post reported that "Republicans in Congress reacted angrily to an Obama administration proposal delivered Thursday by Treasury Secretary Timothy Geithner that offered to avert the fiscal cliff by raising $1.6 trillion in new taxes, in exchange for some $400 billion in cuts to entitlement programs to be negotiated next year":
Republicans in Congress reacted angrily to an Obama administration proposal delivered Thursday by Treasury Secretary Timothy Geithner that offered to avert the fiscal cliff by raising $1.6 trillion in new taxes, in exchange for some $400 billion in cuts to entitlement programs to be negotiated next year.
Geithner's offer would delay the sequester -- automatic spending cuts to the Pentagon and social programs -- for a year, and effectively eliminates the congressional requirement to lift the debt ceiling in perpetuity. The offer included an extension of unemployment insurance, the payroll tax and even money to help homeowners modify mortgages and invest in infrastructure. "I think there was a leprechaun in there somewhere, too," quipped one GOP aide.
The proposal is based on a two-step plan that would decouple the high-end tax and capital gains rates from the middle-class rates, extending only those for the middle class. It would revert estate taxes to their higher 2009 level, and raise an additional $600 billion in taxes elsewhere, according to the GOP summary. It then proposes tax reform required to raise at least as much as the tax hikes, and entitlement reform that would trim $400 billion from the programs. [Huffington Post, 11/29/12]
The White House's Proposal Comes On Top Of $1.5 Trillion In Savings That Obama Has Already Signed Into Law. The Center for Budget and Policy Priorities reported that laws Obama has signed have already "produced $1.5 trillion in savings" over ten years:
Policymakers and budget experts generally agree on the need to reduce projected deficits and put the federal budget on a sustainable path. They have focused less attention, however, on the amount of deficit reduction that the 112th Congress and the President have enacted. Reductions in funding for discretionary (i.e., non-entitlement) programs enacted last year, primarily in the Budget Control Act, have produced $1.5 trillion in savings in discretionary spending for fiscal years 2013 through 2022.
These reductions will shrink non-defense discretionary spending to its lowest level on record as a share of GDP, with data going back to 1962. [CBPP, 11/8/12]
Fox News Also Used Misleading "8.5 Days" Talking Point To Downplay Impact Of Tax Increases On Deficit
Childers: Tax Increases On Wealthy "Would Only Generate About $85 Billion A Year," The Amount The Government Spends "Every Eight And A Half Days." On Happening Now, Childers said that raising rates for top earners would "only generate about $85 billion a year," adding that "the federal government spends that amount every eight and a half days" and asking Cusack, "Do you think the point is purely political for the president?" From Happening Now:
CHILDERS: Let's go back to these tax cuts you were talking about. President Obama, he wants to raise revenue by taxing those making about $250,000 or more a year. Rates for top paid Americans rise from 33 percent and 35 percent today to 36 percent and 39.6 percent, I believe. But that would only generate about 85 billion a year. According to the Treasury Department, the federal government spends that amount every eight and a half days. So do you think that the point is purely political for the president? Since that's what he campaigned on?
CUSACK: Well, that's what Speaker Boehner said, is that Washington has a spending problem, not a tax problem. But Speaker Boehner has a political problem in that their party's guy lost the election. So, there's no doubt about it that the math on both sides, they're far apart. And if you add up all the revenue, that's only going to last for eight days of funding the federal government. But there has to be compromise. [Fox News, Happening Now, 12/7/12]
But Experts Say Tax Increases For Top Earners Would Help Lower The Deficit ...
NY Times: President Obama's Proposal To Allow The Bush Tax Cuts To Expire For Wealthier Americans Would Raise $850 Billion In A Decade. The New York Times reported that "economists estimate that letting the cuts expire for people above that threshold would generate $850 billion over 10 years":
President Obama, drawing a contrast with what he called Republican trickle-down economics, called on Monday for temporarily extending the Bush-era tax cuts for people making less than $250,000 while letting the taxes of the wealthiest go up.
A one-year extension for people making under $250,000 would cost the government $150 billion in revenue, the administration estimates, an amount that would be added to the deficit. In a point of comparison, economists estimate that letting the cuts expire for people above that threshold would generate $850 billion over 10 years. [The New York Times, 7/9/12]
Robert Reich: "The Only Way America Can Reduce The Long-Term Budget Deficit ... Is By Raising Taxes On The Super Rich." In a Huffington Post blog post titled "Why We Must Raise Taxes On The Rich," former Labor Secretary Robert Reich argued that "[t]he only way America can reduce the long-term budget deficit ... is by raising taxes on the super rich":
Here's the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich. Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma -- even if we cut back on our bloated defense budget -- it wouldn't be nearly enough. [The Huffington Post, 4/4/11]
CBO: Extending The Bush Tax Cuts Would Increase Deficits By $2.6 Trillion Over 10 Years. In January 2010, the nonpartisan Congressional Budget Office estimated that extending the tax cuts enacted in 2001 and 2003 would increase deficits by $2.6 trillion between 2011-2020. [Congressional Budget Office, January 2010]
For more on Fox defending the wealthy from tax increases with the misleading "8.5 days" talking point, click here.
... And Economists Agree Revenue Must Be Part Of A Balanced Solution To Lowering The Deficit
Former Bush Economic Adviser Believes "Both Tax Increases And Spending Cuts Are Required" To Lower Deficit. The Hill reported that former Bush economic adviser N. Gregory Mankiw believes "both tax increases and spending cuts are required" to deal with the deficit problem:
America has both a spending problem and a revenue problem -- too much of the former and too little of the latter. Every serious student of the federal budget, right, left and center, agrees that any realistic solution requires a combination of spending cuts and revenue increases.
Democrats and Republicans on the Simpson-Bowles Commission knew that both revenue increases and spending cuts were necessary to deal effectively with our deficit problem.
N. Gregory Mankiw, the chairman of George Bush's Council of Economic Advisers, knows both tax increases and spending cuts are required. Indeed, Mankiw argues, "The distinction between spending and taxation is often murky and sometimes meaningless." [The Hill, 6/28/11]
Former Reagan OMB Official: "I Think The Biggest Problem Is Revenues." In an interview with Talking Points Memo, David Stockman, a former Office of Management and Budget director under President Reagan, responded to Rep. Paul Ryan's (R-WI) budget plan and stated: "I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn't part of the solution. It's a measure of how far off the deep end Republicans have gone with this religious catechism about taxes." [Talking Points Memo, 4/11/11]