Obama to outline plan to confront long-term debt crisis -- and this time he really, really, means it 

I wrote last week that for President Obama, it's never the right time to deal with the long-term debt crisis. But senior adviser David Plouffe took to the Sunday morning shows to announce that Obama would give a major speech outlining his plan on Wednesday.

Obama has been deferring a discussion of the issue and didn't address the problem in a serious way in the budget he unveiled in February, in which he actually ignored the recommendations of his own Fiscal Comission. Perhaps he needed Rep. Paul Ryan to go first. But either way,  it's hard to see what Obama would do to achieve the level of deficit reduction Ryan does in his plan.

While short on details, Plouffe said Obama would argue for raising taxes on higher income levels once the current tax deal expires at the end of 2012 – but that's already accounted for in the budget he released, in which deficits are $4.4 trillion higher than Ryan's over the next decade.

On the spending side, Obama has already either ruled out many of the obvious entitlement reforms or is using them to finance the health care law.

For instance, in his State of the Union address Obama had this to say about Social Security:

      To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.

If you aren't going to to touch benefits, that implicitly means no changes to the retirement age either. So the only thing that leaves is raising taxes. Yet Obama's big Social Security plan during the campaign – to raise the payroll tax on higher incomes – was already used to help finance ObamaCare.

At the same time, the health care law squeezed hundreds of billions from Medicare. It's hard to see where Obama would come up with additional savings.

The only options that would evidently be open to Obama is to find more ways to raise taxes beyond merely cutting some loopholes and rescinding the dreaded Bush tax rates on higher incomes, and to slash defense spending significantly when the nation is fighting three wars. Both of these options carry political risk.

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Staff Report

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A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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