A trick question: If Congress takes no action in coming years, what will happen to the budget deficit? It will shrink — and shrink a lot. This simple fact may offer the best hope for deficit reduction. – David Leonhardt
Obama’s reelection econ speech teaser (the part released from embargo): The President is setting a goal of reducing our deficit by $4 trillion in 12 years or less, phased in over time.

I’m not sure today’s speech will help him in Pennsylvania, where his primary ’08 woes have returned, via PPP:
Obama has two major problems in the state: independents and white Democrats. A majority of independents disapprove of him- 54% give him bad marks to 39% who think he’s doing a good job. More concerning is that his approval rating with Democrats is only 68%, well below the 81% we find for him nationally. He’s doing fine with black Democrats- an 86% approval rating- but with white Democrats he’s at only a 64/27 spread.
…and in case you haven’t noticed, there’s been massive push back on the premise to what’s being written about the “liberal base” being disgruntled with Pres. Obama to the point of mutiny. As I’ve also written, there is still huge Democratic support among rank and file for Obama. But that activist base is another matter, which people writing the push back are discounting.
The big issue is the enthusiasm gap, which is why I cited current Pennsylvania polling.
Pres. Obama’s biggest problem on the economy is revenue and jobs, so adopting the Republican economic model is simply folly. But that’s what Independents want to hear, the White House is convinced, so this is where they’re going.
If Obama keeps making Independents out of Democrats, however, it could cause the mother of all blowbacks.
Segue to the the White House fact sheet on Pres. Obama’s fiscal framework.
FACT SHEET: THE PRESIDENT’S FRAMEWORK FOR SHARED PROSPERITY AND SHARED FISCAL RESPONSIBILITY
The President believes that we need a comprehensive, pro-growth economic strategy that invests in winning the future, lays the foundation for strong private-sector job growth and ensures that shared prosperity will keep the American dream alive for generations to come. A key component of that strategy must be a commitment to fiscal responsibility and to living within our means. Today, the President is laying out a comprehensive, balanced deficit reduction framework to cut spending, bring down our debt and increase confidence in our nation’s fiscal strength, while supporting our economic recovery and ensuring we are making the investments we need to win the future.
- $4 Trillion in Deficit Reduction: The President is setting a goal of reducing our deficit by $4 trillion in 12 years or less. This deficit reduction would be phased in over time to protect and strengthen our economic recovery and the recovering labor market.
- Debt on a Declining Path, Backed Up By An Across the Board “Debt Failsafe” Trigger: The President’s framework would require that, by the second half of the decade, our nation’s debt is on a declining path as a share of our economy. To enforce this requirement, the President is calling on Congress to enact:
Ø A Debt Failsafe that will trigger across-the-board spending reductions (both in direct spending and spending through the tax code) if, by 2014, the projected ratio of debt-to-GDP is not stabilized and declining toward the end of the decade. Consistent with prior fiscal enforcement triggers put in place by Presidents Reagan, George H.W. Bush and Clinton, the trigger should not apply to Social Security, low-income programs, or Medicare benefits.
- Balance Between Spending Cuts and Tax Reform: The President’s framework would seek a balanced approach to bringing down our deficit, with three dollars of spending cuts and interest savings for every one dollar from tax reform that contributes to deficit reduction. This is consistent with the bipartisan Fiscal Commission’s approach.
- Shared Sacrifice from All, Including the Most Fortunate Americans: The President believes strongly that, as we make difficult choices to live within our means, we cannot afford to make our deficit problem worse by extending the Bush tax cuts for the wealthiest Americans.
- Bipartisan, Bicameral Negotiations on a Legislative Framework: The President has asked Majority Leader Reid, Speaker Boehner, Minority Leader Pelosi and Minority Leader McConnell to each designate four Members from their caucuses to participate in bipartisan, bicameral negotiations led by the Vice President, beginning in early May. The goal of these negotiations is to agree on a legislative framework for comprehensive deficit reduction.
- Policy Highlights. The policy highlights in the President’s framework build on the down-payment included in his FY 2012 Budget. They include:
Ø Non-security discretionary spending: The President is proposing to build on the savings from the FY 2011 budget agreement, while investing in key drivers of economic growth like energy innovation, education, and infrastructure. This would entail cutting non-security discretionary spending to levels consistent with the Fiscal Commission, saving $770 billion by 2023.
Ø Security spending: The President’s framework will go beyond the Fiscal Year 2012 Budget to achieve deeper reductions in security spending. It sets a goal of holding the growth in base security spending below inflation, while ensuring our capacity to meet our national security responsibilities, which would save $400 billion by 2023.
Ø Health care: The President’s framework builds on the Affordable Care Act by including new reforms aimed at further reducing the growth of health care spending – a major driver of long-term deficits. The President opposes any plan that would simply shift costs to seniors and the vulnerable by undermining Medicare and Medicaid. Building on the foundation of the historic deficit reduction achieved through the Affordable Care Act, the framework would save an additional $340 billion by 2021, $480 billion by 2023, and at least an additional $1 trillion in the subsequent decade. These savings complement the new patient safety initiative that could lower Medicare costs by another $50 billion over the next decade by providing better care. The President’s framework includes initiatives that will:
CONTINUE READING Pres. Obama’s full fiscal fact sheet….
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