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Posted at 7:39 PM ET, 10/31/2008

Obama's Spending Cuts

By Web Politics Editor


Obama Infomercial.

"For my energy plan, my economic plan, and the other proposals you'll hear tonight, I've offered spending cuts above and beyond their cost."
--Barack Obama infomercial, October 29, 2008

Barack Obama has outlined a series of new spending initiatives ranging from health care to education to the war in Afghanistan that could end up costing $1 trillion over his first term, according to independent experts. In his half-hour infomercial on Wednesday evening, the senator from Illinois repeated earlier assurances that he had "offered spending cuts" to pay for every cent of the post-election bonanza that he plans to shower on his fellow Americans.

Do Obama's figures add up?

The Facts

Obama's claim is artfully worded. Note that, in contrast to his Republican rival, he does not claim that he will balance the federal budget after four years. That seems a virtually impossible task -- given the fact that he wants to extend most of the Bush tax cuts (for everybody making less than $250,000 a year) beyond their expiration date of 2010. The independent Tax Policy Center projects a budget deficit under Obama of $520 billion in 2013, compared to a presently projected deficit of $147 billion.

What Obama does say is that he will pay for his new spending plans with even bigger spending cuts.

Whether you believe that he will deliver on this pledge depends on how much weight you give to politicians' promises that are not supported by detailed explanations of how exactly they will be put into effect. On paper, the Land-of-Lincolner might be correct, says Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which has analyzed the two candidates' spending plans. By her calculations, Obama has promised $990 billion in new spending over his first four-year term -- to be offset by $989 billion in spending cuts.

The problem, however, says MacGuineas, is that Obama "is very specific on his spending proposals, but much less specific on his savings proposals." Furthermore, the Illinois senator has not made his new spending proposals contingent on securing the corresponding spending cuts.

Put another way, Obama's new spending plans are very concrete: a new College tax credit ($134 billion in 2013), expanded health care coverage ($115 billion), a refundable tax credit for workers ($72 billion). Many of his proposed spending cuts belong to the pie-in-the-sky category.

Take the proposal to cut health care costs by $2,500 per family per year through the adoption of new technologies, improved management techniques, and so on. "That's a real stretch," said John Sheils, senior vice president for the Lewin Group, a consultancy company that has studied the health care plans of the two candidates. By the Lewin Group's calculations, the savings are more likely to be in the region of $700 per family, based on the plans outlined by the Obama campaign.

"If you are going to be definitive about the savings, you have to be equally definitive about how you are going to achieve them," said Sheils. He said that Obama had "some interesting ideas" for health care savings, but had failed to outline enforcement mechanisms for patients and medical staff that fail to follow his guidelines.

Similar caveats apply to Obama's other savings promises, including reforming government spending ($17 billion in 2013), elimination of waste and obsolete programs ($50 billion) and a phased withdrawal from Iraq ($156 billion). Some of these cuts will depend on events at least partially outside Obama's control (like the war in Iraq), while others (such as the slashing of earmarks) will require concessions from Congress that no previous president has been able to achieve.

"Every president has a list of programs they would like to eliminate, but every one of those programs has a massive lobbying system in place to preserve it," said Thomas Schatz, president of Citizens Against Government Waste, a taxpayer watchdog group. "Members of Congress will readily create new programs, but they are very reluctant to cut old ones."

Schatz cites the example of Economic Development Administration, which Obama has talked about eliminating. The agency, which has the mission of generating jobs, has been slated for the chopping block for years. When it last came up for re-authorization, in 2004, the House voted 388-31 to keep it. Only one Democrat voted against.


The Pinocchio Test

Promises to cut government spending are pretty much worthless unless accompanied by convincing explanations of how precisely they will be implemented. Obama has failed this basic test. Vague targets are insufficient, particularly when there is no real link between the promised spending cuts and the new spending programs.

(About our rating scale).

By Web Politics Editor  | October 31, 2008; 7:39 PM ET
Categories:  Barack Obama, Economy  
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Next: Greatest Hits of the 2008 campaign

Comments

Basically, if you read the article, nothing Obama says is panning out as Obama says.
And the DEFICIT difference between Obama's claim of 147 BILLION verses the Tax Policy Center projection that it would be closer to 520 BIllion DEFICIT is huge, too. and that is deficit. Not even what will be spect. That is aroung 1 TRILLION. You left that out!

So why only 2 long noses?

We know who you endorsed, but please.

Posted by: Texan2007 | October 31, 2008 11:47 PM | Report abuse

Two Pinoccio's for not specifying where the cuts are, specifically, and for implying that they include the ongoing Bush deficit? How many does McCain get for claiming to balance the budget in 4 years? Ha Ha.

Fact is, the time to worry about deficits was over the last 8 years, when Bush and McCain were pushing through massively deficit budgets and off-budget wars.

With the current economic crisis, we NEED to have deficit spending, just not wasted on missiles in Iraq (or Iran, under a McCain administration). Obama recognizes that we need to invest money on research, infrastructure, education, and other things that make the USA stronger, and able to bounce back. New foreign wars and tapping the last drops of oil to extend our addiction by 2% won't do improve the USA materially.

We just spent $700B or more to shore up the banks, so that they can reward investors, nice plan (not). Let's spend whatever it takes to get America moving again, but put it in the hands of teachers, scientists, and construction workers, not Exxon execs and hedge fund managers.

Posted by: merleb | November 1, 2008 12:30 AM | Report abuse

Closer to $520 billion deficit according to the Tax Policy Center?

Tough, I look at the numbers and the Tax Policy Center did not take into account, among other things, the last stock melt-down that wiped out over $1 trillion dollars. That melt-down translated into roughly $300 billion in tax loss write-off for investors who will be filing tax returns for the next several years.

This meant $300 billion revenue short-fall to the federal coffer. So we will be looking at a minimum of $820 billion deficit in 2013 under Obama.

Posted by: peterdaol | November 1, 2008 12:58 AM | Report abuse

At least for a change, the FactChecker does note that the McCain-Palin claim of balancing the budget in four years is yet another fabrication (which should be worthy of a few Pinocchios).

Once again, the fact that Obama does not spell out his plans in detail merits the same two Pinocchios that McCain and Palin almost invariably get for out-and-out lies, known misrepresentations, and blatant distortions.

Posted by: edallan | November 1, 2008 1:47 AM | Report abuse

Isn't it a little late to be fact checking Obama's fantasy economics since he's been spouting them for months now? And as far as I can see there isn't one positive thing in there. And Obamabots, please stop changing the topic to McCain. It's about Obama now.

Posted by: BJLeone | November 1, 2008 8:45 AM | Report abuse

This is a case of guilt by association gone haywire. "Both President Bush and Secretary of State Condoleeza Rice have had extensive dealings with Palestinian Authority President Mahmoud Abbas, who is much more closely identified with the PLO than Rashidi ever was."

This is a poor comparison. There is a difference between shaking hands with someone out of diplomatic necessity and shaking hands with someone because he is your good friend.

Posted by: marksjo1 | November 1, 2008 8:55 AM | Report abuse

The media seems to have been covering for Biden for some time. While news stories still talk about Dan Quayle’s spelling mistake 18 years later, there has been almost no news coverage of Biden’s numerous wacky statements. What if Quayle had said something similar to Biden’s recent statement that, "When the stock market crashed, Franklin D. Roosevelt got on the television and didn't just talk about the, you know, the princes of greed. He said, 'Look, here's what happened.'" A neat trick given that Herbert Hoover was president in 1929 and no one was watching television.

It might not fit the simple template for a 36-year veteran of the Senate to not understand what vice presidents do (after all, eight vice presidents have served with him), but Biden knew less about this than the political outsider, Sarah Palin. Given that they are running to be vice president, why didn’t that story dominate the news coverage after the debate?
-- Finally, an amusing point as evidence that Biden is just one of the people he pointed to, inviting anyone to have a beer with him at "Katie's Restaurant" in Wilmington, Del. Unfortunately, people will have a hard time taking him up on his offer, since the restaurant hasn't had that name for probably 15 years.

Posted by: lucygirl1 | November 1, 2008 10:11 AM | Report abuse

Isn't it amazing that the mainstream media has not gone after Biden since being picked for Obama's VP about his lying. Yes, his lying. During the debates he has told us that Obama was not ready for the Presidency. Since being picked for the VP position, he tells us that Obama is by far the best. Which is it? Was he lying during the debates, or now? Can we trust the man who speaks with forked tongue to be a heartbeat from the White House?

Posted by: rex142 | November 1, 2008 12:49 PM | Report abuse

Republicans and conservatives have literally bankrupted this country, and the Tax Policy Center wants to criticize Obama's economic plan for being ineffective when (1) he has yet to take office, (2) he has yet to be afforded the opportunity to fully assess the damage caused by George Bush, Republicans and conservatives to the economy - after all, he has been campaigning the past 2 years, and (3) he has given a general outline of what he would do if he were to become president - which is different from being president and implementing an economic recovery plan. Give me a break.

Posted by: jkdealmeida | November 1, 2008 1:39 PM | Report abuse

Obama has raised phenomenal sums of money to promote himself, and is spending money like there is no tomorrow; which is true, as most of his hundreds of millions of dollars may not be used for non-campaign related things after Tuesday. I am wondering what wold they do wih all the millions left over; go on a shopping spree?

And this is the man who will rein in spending? What is the basis for that assumption?

Most candidates overestimate the waste and fraud in programs, overestimate their ability to eliminate them. They underestimate the 'real cost' in the process of elimination. They don't factr the cost of eliminating the waste. Just as in anything, after you pick the low hanging fruit, the cost and effort at reaching higher becomes ever larger.

Posted by: pKrishna43 | November 1, 2008 9:40 PM | Report abuse

This story was written by CBS News correspondent Wyatt Andrews.
________________________________________

Without question, the Barack Obama infomercial served as a very slick and powerful recitation of the biggest promises he's made as a presidential candidate. But the very bigness of his ideas is the problem: he seems blind to the concept his numbers don't add up.

Obama has already proposed a new stimulus package of $188 billion over two years. His tax cuts will cost $85 billion a year. His "army of new teachers": $18 billion; Renewable energy: $15 billion. CBS News and various independent experts estimate Obama's total first year spending could exceed $280 billion.

Still Obama repeated his claim he can find the money to pay for every proposal.

"I've offered spending cuts above and beyond their cost," he has said.

The fact is the savings Obama has identified do not cover his spending. According to a CBS News estimate, he's around $90 billion short. The Obama campaign disputes this, saying everything including the stimulus is paid for over 10 years. But other analysts say - even presuming Obama saves money in Iraq and chops the federal budget as promised - he falls short.

Let's break all of this down, starting with his highly suspect, and widely discredited, claim that he can find federal "spending cuts beyond the costs" of his promises. Very few independent economists believe he has identified the savings needed to offset his remarkable list of tax credits, tax cuts and spending pledges.
TO BE CONT...

Posted by: JANESCHE | November 1, 2008 9:55 PM | Report abuse

Fact: Even if you believe Obama intends to fix health care, most independent analysts say the cost is massive - $1.2 trillion over ten years, according to the highly respected Lewin Group. When the new Congress wakes up next year to a $1 trillion deficit, and answers the overwhelming new demands for another stimulus package, will the leadership really bite on a health care reform package that digs the deficit hole so much deeper?

And that's just the beginning of what Obama would spend.

Fact: The tax cuts he promises, which are mostly refundable tax credits (code for cash back), will cost $60 billion just in year one, according the National Taxpayers Union, though the Obama campaign's own estimates in July put that figure at $130 billion.

Fact: His new promise to give businesses a $3,000 tax credit for each new job created will cost $40 billion. But economists say this credit is far more likely to benefit companies already planning to expand and will likely not be enough to help companies create new jobs or forestall layoffs.

Fact: Obama's claim he will lower health care premiums by $2,500 is: 1.) guesswork, which is 2.) Based on health care savings that might, in a perfect world, happen over 10 years - a fact Obama neatly glosses over.

Fact: Obama, when referring to savings he can make by leaving Iraq ($90 billion, according to Congressional Budget Office estimates), has spent these savings several times over, across several different promises depending on the crowd he's addressing.

Posted by: JANESCHE | November 1, 2008 9:56 PM | Report abuse

Most of the time he spends the Iraq savings in the context of the roads he wants to build; sometimes it's for the teachers he wants to hire. Tonight, he riffed rhetorically on the savings, asking how many scholarships could be funded, or how many schools could be built. In the end though, presuming he really saves $90 billion, he can only spend it once.

Remember he also mentioned rebuilding the military ($7 billion/yr); his education initiative ($18 billion/yr); and his energy initiative ($15 billion/yr). He did not mention the $188 billion that he would spend on the brand new stimulus package he has proposed.

If he closes every loophole as promised, saves every dime from Iraq, raises taxes on the rich and trims the federal budget as he's promised to do "line by line," he still doesn't pay for his list. If he's elected, the first fact hitting his desk will be the figure projecting how much less of a budget he has to work with - thanks to the recession. He gave us a very compelling vision with his ad buy tonight. What he did not give us was any hint of the cold reality he's facing or a sense of how he might prioritize his promises if voters trust him with the White House.

Posted by: JANESCHE | November 1, 2008 10:18 PM | Report abuse

For a long time, Americans have tolerated the incessant whine from a portion of their fellow citizens whose innumerable complaints can be reduced to a single idea: life is not fair. Question: why would any rational American want to put these people in charge of the country? You can dress up the rhetoric of Barack Obama any way you want, but in the final analysis it is all about government imposing “fairness” upon us–by any means necessary.
The ascendancy of Americans who believe somebody “owes” them something without regard to mitigating factors such as hard work, ambition and personal responsibility is breath-taking. Yet it is hardly surprising. Years of sub-standard education have produced Americans whose misunderstanding of reality is profound. They truly believe that none of the problems they face are of their own making. They truly believe equality of opportunity and equality of results are one and the same. They truly believe self-esteem has no relationship to accomplishment.
In other words, it doesn’t matter what you do, it only matters what you want. And if you don’t get what you want, it’s because America is a rotten country.
By Arnold Ahlert –
http://politicalmavens.com

Posted by: JANESCHE | November 1, 2008 10:28 PM | Report abuse

I know this column is a tough job, but what's with this groove where you just give everyone two Pinocchios if they're somewhat wrong?

Seems this column has abandoned any sort qualitative judgment and retreated into a binary red/green fact-o-meter where any affront to facts is treated the same, where the mis-statement and the intentional distortion both are just 2 Pinocchios.

Posted by: nodebris | November 2, 2008 1:49 AM | Report abuse

I suspect the above analysis is as fragile as the Obama claim. No-one yet knows the size of the deficit that awaits the new President (likely to be some unpleasant surprises), and neither does anyone know how long it will take for the stimulus to kick in (assuming Obama gets elected).

If it kicks in quickly there will be more total tax revenue even though taxes are lower, because more people will be back at work. If it takes longer then income tax revenue will drop anyway.

If McCain gets elected, it will be a long and weary journey and I wouldn't hold my breath for economic recovery. He does not seem to understand what needs to be done to get the economy moving again.

Overall, though, it does seem that in America, there is more emphasis on personality. Do the candidates have the opportunity to examine in detail the current financial status of the government?

Where I'm from, the major parties submit their budgets to Treasury Department which analyses and reports back before the election, so there's a bit of a cross check. But then the public service here, while more politicised than it used to be, is still essentially non-partisan, unlike in the USA (from what I gather).

Posted by: Meem1 | November 2, 2008 7:04 AM | Report abuse

HENDERSON, Nev. — Barack Obama did not know a relative was living in the United States illegally for the past nearly four years prior to today's Associated Press report, "but obviously believes that any and all appropriate laws be followed," the campaign said Saturday in a statement.

The Democratic nominee last heard from Zeituni Onyango, who attended his swearing-in ceremony to the U.S. Senate in 2005 and is a half-sister of Obama's late father, two years ago, when she called to say she was in Boston, the campaign said. Campaign officials said they did not assist her in getting a tourist visa and had not known that she was living in America.

Posted by: DorchesterAndCongress | November 2, 2008 10:33 AM | Report abuse

This is truly one of the most ludicrous so-called fact checkers you have come up with for a good reason.

When this nonsense was tried in Australia last year it was discarded for a simple reason.

Neither Obama nor McCain have any idea of what programs are being funded and what aren't.

It is not a lie, it doesn't even rate a genuine mention and the Fact checker gets 4 pinnochios for their worthless effort.

Posted by: shepherdmarilyn | November 2, 2008 12:10 PM | Report abuse

Rashid Khalidi is an American, he is not in the PLO, has never been in the PLO and that story was crap.

Obama's aunt cannot be in America illegally as she came on a visa, is still seeking asylum and lives openly in state housing on welfare payments.

The US helped to write the refugee convention and knows very well that this woman would be in danger in Kenya today so why in god's name do toads here have to pick on her?

You need to get over this childish tripe - men and women are dying needlessly in Iraq, hundreds of thousands are injured and McCain voted against extended health care and so on.

Posted by: shepherdmarilyn | November 2, 2008 12:15 PM | Report abuse

I agree Obama has been vague. But McCain just straight out lied when he said he was gonna balance the budget. 4 Pinocchios for McCain.

Posted by: zosima | November 2, 2008 10:27 PM | Report abuse

Most Americans voting Democrat think they're punishing the Republicans for Bush/Iraq. Instead, they need to vote for the candidate who is capable of growing the economy, through job creation. This country will continue in a downward spiral
until we can replace all the jobs that went overseas.

Posted by: ohioan | November 2, 2008 10:51 PM | Report abuse

I would like to know how Obama is proposing a "95%% tax cut to all Americans" when only 65-70 percent (depending on the source) pay income taxes. Sounds like a form of increased welfare or a demogrant - basically paying people to stay home.

I would also like to give credit to Joe the Plumber eliciting the classic Obama and Democrat response that, "sharing the wealth is good for this country." Sharing the wealth is a joke. I work very hard for my income as most Americans do. Now we all have to work harder because we are about receive a candidate who would like take a portion of our hard earned dollars and give them to undeserving recipients. I am also appalled of all the Joe the Plumber's attacks by the left leaning media while the Democrats get free pass on all types of issues that would get a GOP candidate bbq'ed in the press.

I won't touch on the rest of Obama's unrealistic and fantasy spending proposals that will result in only increasing the deficit. Obama is a classic tax and spend liberal, not to mention he has never been in charge of anything.

These are only a few of the many reasons supporting Obama is one of the most unqualified candidates as President that this country has ever had. I apologize for the rant but it will be huge mistake to elect this liberal. I didn't even discuss his enemic foreign policy experience. I bet he would send the leaders of countries that want to harm Americans xmas cards and flowers.

Posted by: jason87 | November 2, 2008 11:32 PM | Report abuse

Oh look, another negative Michael Dobbs piece on Obama.

Dobbs' bias is what should be the focus of a "fact checker". I don't bother to read them anymore (as I didn't read this one), because I determined that bias a long, long time ago. A real newspaper would have done the right thing and traded this guy to the Washington Times for a half-used barrel of newspaper ink, but the WaPo stopped being a real paper a long time ago. CSM today, WaPo tomorrow (and not a minute too soon).

Posted by: gbooksdc | November 3, 2008 10:05 AM | Report abuse

How about giving us some real facts? The fact is that Obama is deliberately vague about how he's going to pay for all his "pie in the sky" schemes. If people had a fair shot at knowing the facts from the media, they would shy away from him as if he had the plague. I hope all these shills for Obama can live with themselves after he's polished off what's left of our economy.

Posted by: Lilycat1 | November 3, 2008 10:49 AM | Report abuse

SO GLAD Michael Dobbs and his sycophantic rants will be gone after tomorrow. This section has done the Post a great disservice and much harm to its credibility.

The readership sees through you, Mike, and we have from the start. Maybe you can sign up now to work for Palin's 2012 campaign.

Posted by: WilliamJ1 | November 3, 2008 2:58 PM | Report abuse

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