Today President Obama is expected to unveil a deficit-reduction plan for the budget supercommittee – $3 trillion over 10 years, with a populist appeal to raise taxes on the wealthiest Americans and a way less populist move to trim Medicare, Medicaid and military pensions. (Risk your life for your country and get a 401K-ish thing?)
The White House says the president will threaten to veto any plan from Congress that cuts entitlements without also raising taxes on the rich. Seeing as how House Speaker Boehner has already said tax increases “are not a viable option,” this one might be a tough go. But in the same address, the speaker also said he’s open to closing loopholes, so there’s that.
The situation is quite clear: the Bush tax cuts created the deficit. The nonpartisan Congressional Budget Office calculates that either we let go of the Bush tax cuts and “the debt held by the public recedes,” or we keep them and the deficit grows to 82 percent of our economy. That would be the highest level since 1948, when we were paying off World War II. That’s what the CBO means by “continuation of certain policies,” the blue line that goes upward. It’s also what they mean by the light blue chunks below: