Prospects for grand bargain after Obama speech: dismal 

Keith Hennessey,  veteran of federal budget making in both the executive and legislative branches, pays Barack Obama a compliment by taking seriously the proposals he outlined in his partisan and petulant (my adjectives, from my Sunday Examiner column speech last Wednesday. But he has few compliments to hand out on the (apparent) specifics of Obama’s proposals. He notes that Obama’s trigger proposal, to take effect if federal budget deficits don’t fall below a certain level of gross domestic prouduct, is in effect a giant tax increase. He considers dubious Obama’s reliance on an Independent Payment Advisory Board to cut Medicare spending dubious and the credibility of his proposals for cuts in “other mandatory spending” as “zero.”

“This is a short-term budget, not a long-term budget,” he says in a final analysis. “There are three forces driving our long-run government spending and deficit problem: demographics; unsustainable growth in per capita health care spending; and unsustainable promises made by past elected officials, enshrined in entitlement benefit formulas. The President’s proposal addresses none of these forces.” Final sentence: “But the chances of a long-term grand bargain in the next two years just plummeted from an already low starting point.” And, as Hennessey points out in a subsequent blogpost, they will remain just as dismal if (as gambling markets suggest) Obama is reelected and Republicans retain control of the House of Representatives.

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Michael Barone

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