Sunday, October 02, 2011

Schmidt: Debt Plan Must be "New Math"

From OH-2 Congresswoman Jean Schmidt:

President Obama tossed around some big numbers earlier this week, when he shared details of his plan to reduce the federal government's debt burden through a combination of spending cuts and tax increases.

The president said his plan would call for twice as much in spending cuts over tax increases.

Not so, according to an analysis by the Heritage Foundation, which says the White House is counting on tax increases of $1.57 trillion and spending cuts of $130 billion.

The administration's proportions are a little off. Instead of $2 in spending cuts for every $1 in tax increase, Heritage found about $12 in tax increases for every $1 in spending cuts.

"This is not class warfare," President Obama said in his Rose Garden speech. "It's math."

Perhaps it's some kind of new math. It's confusing for folks used to traditional arithmetic. Some analysts call it double-counting.

If any of this looks familiar, it's because this isn't the first time the president has trotted out these proposals.

In fact, it's the fourth time.

So far, the president has run into a brick wall every time he's proposed a version of this plan - and Congress has sent him home empty-handed.

There's more at work here than a political disagreement over the wisdom of raising taxes versus cutting spending.

The Congressional Budget Office has said for years that these government-sponsored investments don't work.

The reasons are simple:

• The benefits are small, and sometimes their unintended effect is to suppress economic growth.

• Federal money is often used by states and cities to pay for programs they would have implemented anyway, but now they don't have to spend their own money to do it.

• The federal goal sometimes has nothing to do with economic growth.

I agree with the president that we have to get control of the runaway government spending that threatens to further damage our nation's credit rating.

The way forward requires that we stay focused on creating the conditions that promote the growth of our businesses, just as sunlight and water do for the crops in our fields.

Not gimmicks or smooth talk or the high-pressure sell.

Just the truth. We can take it.