Obama Claim of $1.8 Trillion Deficit Cuts Open to Question
President Barack Obama's budget is relying on a series of familiar accounting tricks to show $1.8 trillion in deficit reduction over a decade, an amount that would shrink by almost half if they were excluded.
But so-called "pay-go" rules officially require tax cuts and new spending on the mandatory side of the ledger to be balanced by new revenues or spending cuts elsewhere. Mandatory spending, like fees that Medicare pays to doctors, runs on autopilot.
The accounting steps essentially inflate the White House's "baseline" predictions of future deficits. Then the White House claims greater deficit savings than it otherwise could if it played by the budget rules followed by the Congressional Budget Office, whose estimates lawmakers have to follow.
That's according to a study by the budget sleuths at a Washington think called the Committee For a Responsible Federal Budget, a business-funded group that advocates cutting deficits.
Here's how:
MANDATORY AUTOMATIC CUTS
In the budget table summarizing the $1.8 trillion in deficit cuts, there's a line that adds back funds to replace the automatic, across-the-board cuts to a variety of mandatory programs, including a 2 percentage point cut in payments to doctors who treat Medicare patients.
That's a major assumption on Obama's part about the fate of the automatic cuts, part of the deal he struck with Congress in August 2011.
Cost: $185 billion over 10 years.
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Obama Claim of $1.8 Trillion Deficit Cuts Open to Question