President Obama's fiscal policy speech

Here's a live video feed of President Obama's fiscal policy speech:

I'll be making updates throughout the speech, including adding the full transcript when it is available for posting. For now, here's a fact sheet from the White House offering an overview of President Obama's plan.

The fact sheet asserts the goal of the plan is to reduce the deficit by $4 trillion over the next 12 years. It's not entirely clear from the document what the baseline is for those projections, but according to a senior administration official, it is the CBO's alternative fiscal scenario baseline. (Paul Ryan touted a number of $6 trillion, but he wasn't using the CBO's baseline, he was using a modified version of that baseline developed by Heritage.)

The Obama fiscal plan's central mechanism for ensuring a reduction in both spending and tax expenditures is a "debt failsafe" trigger that would require national debt to be declining as a percentage of GDP by the second-half of the decade. The failsafe would trigger automatic spending cuts, but Social Security, Medicare, and low-income programs would be exempted from those cuts.

Obama's plan calls for increased revenue, achieved in tandem with tax reform. Obama's plan calls for no more than one-quarter of the deficit reduction to come from increased revenues from tax reform?three-quarters must come from spending cuts and interest savings. According to a senior administration official, that would mean 25% from tax reform, 50% from spending cuts, and 25% from interest savings.

Obama will also say he opposes extending the Bush tax cuts for the wealthy. According to a senior administration official, the baseline assumption for tax revenue takes that into account, so the additional revenue from tax reform would be above and beyond the revenue from expiring the Bush tax cuts for the wealthy. That's an important point.

Other key points from the fact sheet: The plan calls for $770 billion in savings from non-security discretionary spending by 2023; $400 billion in savings from security spending by 2023; and $480 billion in savings from federal health care expenditures. It would accomplish this last point by building on the health reform law and seeking reductions in excess expenses through reforms to Medicaid, reducing the cost of the prescription drug program, and strengthening Medicare's Independent Payment Advisory Board.

The fact sheet also says President Obama does not believe Social Security is in crisis nor is it a driver of our federal deficit, though he would support a long-term bipartisan plan to strengthen it.

Update: And we're underway. I'll post the remarks as prepared shortly.

Update: As President Obama starts his speech, it's worth remembering the central irony of the debate over fiscal policy: if we did absolutely nothing but continue current law, the deficit would more or less take care of itself. Why? Because the Bush tax cuts would expire in their entirety. Fundamentally, the entire reason we are having this debate is because there is a lack of political courage to return to Clinton-era tax rates for everybody. In his speech today, President Obama will go part of the way towards that goal, but Republicans have vowed to obstruct any plan to raise revenue. Absent their cooperation, letting the Bush tax cuts lapse is our only viable fiscal policy option.

Update: The first part of the speech is less about our what to do going forward than it is talking about about President Obama's view of the American vision of government, and a history of how we got to the point that we are at today. The central problem, he says, is that we expanded what government was doing with two wars and a prescription drug benefit for Medicare while simultaneously slashing taxes, particularly on the wealthy. Making things worse: the emergency spending and lost revenue brought on by the recession and financial crisis. Now, going forward, we need to get back on a path that will allow us to pay down our debt, Obama says.

Update: Unlike Republicans, Obama argues that we need a sound fiscal policy because without a sound fiscal policy, we cannot have a government that does the things we want it to do. To him, government isn't the problem. The problem is if we have a fiscal policy that doesn't adequately cover the cost of government.

Update: President Obama says the GOP's plan to reduce debt would "fundamentally change America"?for the worse. "These are the kind of cuts that tell us we can?t afford the America we believe in.  And they paint a vision of our future that?s deeply pessimistic," he says. "It?s a vision that says if our roads crumble and our bridges collapse, we can?t afford to fix them."

Source: http://feeds.dailykos.com/~r/dailykos/index/~3/cUeKOQGlmVo/-President-Obamas-fiscal-policy-speech

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