President Obama has ferociously resisted tax cuts, trade agreements and spending cuts—that is, right up until the moment he supports them. Once again, during the last-minute wheeling and dealing over a budget proposal to avoid a government shutdown, Obama swooped in to bargain with Republicans, struck a deal and then praised the compromise as an "historic" accomplishment.
All this brings us to this week when Obama will unveil his own spending plan on the heels of Rep. Paul Ryan's 2012 budget proposal. What will that proposal look like? The WSJ offers a sneak peek:
President Barack Obama will lay out his plan for reducing the nation’s deficit Wednesday, belatedly entering a fight over the nation’s long-term financial future. But in addition to suggesting cuts—the current focus of debate—the White House looks set to aim its firepower on a more divisive topic: taxes.
In a speech Wednesday, Mr. Obama will propose cuts to entitlement programs, including Medicare and Medicaid, and changes to Social Security, a discussion he has largely left to Democrats and Republicans in Congress. He also will call for tax increases for people making over $250,000 a year, a proposal contained in his 2012 budget, and changing parts of the tax code he thinks benefit the wealthy.
“Every corner of the federal government has to be looked at here,” David Plouffe, a senior White House adviser, said Sunday in one of multiple television appearances. “Revenues are going to have to be part of this,” he said, referring to tax increases.
What the president doesn't seem to understand is that the U.S. doesn't have a revenue problem -- it has a spending problem -- and raising taxes will only make things worse:
Eliminating the Bush tax cuts for the highest earners, however, will only put a small dent in the projected deficit.
Republicans contend that raising top rates would hurt small businesses and cut into cash that might otherwise turn into consumer spending. Mr. Ryan said on NBC’s “Meet the Press” Sunday that “If you go down the tax increase path you’re sacrificing the economy.”
WSJ's David Wessel looks President Obama's deficit-reduction plan that would cut into entitlements and raise taxes: