Obama vs Ryan: A Comparison Of Two Utterly Unbelievable Deficit Cutting Plans

Tyler Durden's picture

Lately everyone and their kitchen sink is coming up with one after another grandiloquent deficit cutting plan, one more unbelievable than the next. At this point nobody believes that either administration can cut $4 million let alone $4 trillion, which seems to be the bogey targeted by both the Obama and the Ryan budget proposals. Too bad no one can explain just how we get from point A to point B. But the show must go on until America finally depletes the good will of the once-reserve currency which now has become a bigger funding currency than the Yen, and pulls the plug. Until then, here is a comparison of the two most recent plan proposed to get America from its current deplorable state, which for those paying attention is located some $27 billion dollars away from the official debt ceiling following today's $13 billion auction. Courtesy of Reuters, we present a compare and contrast of the Obama and the Ryan plans. Feel free to heckle at will.

Comparing Obama, Ryan budget plans, from Reuters

DEFICIT REDUCTION

  • Obama calls for $4
    trillion in deficit reduction to be phased in over 12 years or less.
    Three-fourths would come from spending cuts and interest savings and the
    rest by streamlining the tax code. A "fail-safe" would trigger
    across-the-board spending cuts if debt reduction goals are not met.
  • It calls for reducing deficits as a percentage of gross domestic
    product from around 10 percent currently to 2.5 percent in 2015 and 2
    percent by the end of the decade.
  • Ryan's 2012 budget reduces
    deficits over the next decade by $4.4 trillion, calls for $5.8 trillion
    in spending cuts and lowers tax rates for businesses and individuals. It
    would set a binding cap on government spending to keep it below 20
    percent of the $14 trillion U.S. economy.
  • Ryan's plan brings the deficit as a share of the economy to 2.4 percent in 2015 and 1.6 percent in 10 years.

MEDICARE, MEDICAID, SOCIAL SECURITY

  • Obama says Social Security is not contributing to the current debt
    and its financial future should be dealt with separately with bipartisan
    agreement.
  • On healthcare, his plan calls for $480 billion in
    Medicare and Medicaid savings by 2023. He would strengthen Medicare's
    Independent Payment Advisory Board and save Medicaid money by
    streamlining the formula for giving federal funds to states.
  • Obama's plan emphasizes improving care quality to achieve savings for
    the Medicare healthcare program for the elderly. He would allow Medicare
    to use its purchasing power to negotiate lower costs on prescription
    drugs and he would speed up the availability of cheaper generic drugs.
    He wants upper limits to be set on Medicaid payments for durable medical
    equipment.
  • Ryan would repeal the healthcare overhaul enacted
    into law last year. He wants to eventually eliminate the current
    fee-for-service program for Medicare. Instead, future retirees would get
    a federal subsidy based on income and health status to shop for medical
    coverage from private insurers. Medicaid would become a block grant
    program where the federal government gives states a chunk of money to
    run the health program for the poor without federal interference.
  • Ryan calls for bipartisan negotiations on Social Security.

TAXES

  • Obama calls for ending Bush-era tax cuts for the wealthiest. He wants
    Congress to overhaul the tax code to make it simpler and fairer and
    reduce the number of tax breaks that favor one taxpayer over another. He
    calls for a corporate tax overhaul to help lower the corporate tax
    rates.
  • Ryan also calls for a tax law overhaul. His plan would
    cut the top corporate and personal tax rates to 25 percent, down from 35
    percent.

DEFENSE AND OTHER DISCRETIONARY SPENDING

  • Obama
    wants a fundamental review of U.S. military missions and capabilities
    around the world. His plan proposes some $400 billion defense spending
    cuts that would not compromise U.S. defense capabilities.
  • On
    non-security discretionary spending, Obama's plan seeks another $200
    billion in savings beyond the $400 billion proposed in his February
    budget blueprint for fiscal 2012, which begins Oct. 1.
  • Ryan's
    budget leaves military spending mostly untouched. But it does reflect
    $178 billion in savings identified by Defense Secretary Robert Gates.
    Some $100 billion is reinvested in combat capabilities and the rest is
    used for deficit reduction. Ryan calls for bringing other spending down
    to 2008 levels and freezing it there for five years.

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mynhair's picture

Sellout budget passed House.

-Michelle-'s picture

Lord, what fools these mortals be...

Thomas's picture

I won't believe anything until I see a plan that is front-loaded with the pain.

Cdad's picture

Why would you believe that even?  How about one year budgets...a spending cut fight each year...until the thing is balanced?  Who actually believes that Congress will direct its spending to meet Congressman Ryan's expectations...FOR THE NEXT TEN YEARS?  You have to be kidding me.  As much as I think he is actually a decent fellow, it is nonsense to proceed with a 10 year budget. That trick has been used too many times already.

That's like investing in JP Morgan shares based on J. Dimon's qrtly reports....useless.

Ben Fleeced's picture

Would this work for you?

An appropriate budget for next fiscal year would be a simple bill:

1)      Approved Federal positions would be returned to the level on January 1, 2006.

2)      The budget total would be set to the total Federal revenue received in the fiscal year ending October 1, 2011. 

3)      The President would be authorized to set the priorities as to how this money would be allocated among the agencies and departments with the restriction that the military budget could not decline below their actual expenditures for Fiscal 2010.

4)      The President would be required to present to Congress by January 1, 2012, the agency-by-agency and department-by-department spending allocations or the agencies not so allocated would have their budgets set to $0.00 for the fiscal year.

5)      All moneys would be assumed to be appropriated for only one fiscal year with no money being allowed to be rolled over to another year in not spent.

6)      The Judiciary’s budget would be set to the same amount as appropriated for fiscal 2008.

PD Quig's picture

I carry no water for the GOP, but to compare O'Buttfucker's absence of a plan to Ryan's printed and observable plan is really quite inane. What Obumble slung last night was a bunch of class warfare bullshit unencumbered by even the barest hint of reality. Even as was his "budget" of a few months ago. Obama is an economic illiterate of the first order (“profits to earnings ratio”) and has demonstrated that he has no intention or ability to lead on this issue.

Obviously, the wheels are going to have to come off before anything is done—and I, for one, am ready for it. A few bankers hanging upside down from lampposts along with a few congressmen would do the country a world of good.

Henry Chinaski's picture

This will pass with compromises on both sides.  Taxes and spending will increase.

fbrothers's picture

More jibber jabber from the kings of BS in D.C.

hedgeless_horseman's picture

It would set a binding cap on government spending to keep it below 20 percent of the $14 trillion U.S. economy.

Binding, like the current debt ceiling?

LawsofPhysics's picture

Everyone needs to ask themselves one simple question, do you support the bankers or the republic?

LawsofPhysics's picture

One you work for as a slave and the other as a free person.  Admittedly, neither promises that you will survive.  People have forgotten that bit and everyone today wants a guaranty.  Sorry, nature doesn't work like that.

Joe Davola's picture

No problem - I get your point.  What I meant to imply was in our current configuration the republic is a wholy owned subsidiary of the banks.  So the republic debases the currency to the benefit of the banks and our 'coins' are constantly being clipped.  It isn't direct slavery, but the effects are pretty similar.

LawsofPhysics's picture

Sounds like it is time for a new republic.

UGrev's picture

Comparison? really? That mother fucker, Ryan, voted FOR TARP. There is no comparison. They are the same fucks on a stick. 

Wake me up when the food riots start and bullets start flying.. 

Hexus's picture

What's so hard to believe? Ryan voted for TARP because he's a cum slut for the oligarchs. They want to do away with social programs so that there's more delicious tax payers money to steal.

If you hadn't noticed yet the Tea Party is controlled by Koch, one of the richest men in New York, if you think they are sticking up for the working man/middle class you are wrong. Ryan wants to cut taxes for the super wealthy while cutting services and increasing taxes for everyone else, enough said.

PuppetRepubl1c's picture

"he's a cum slut for the oligarchs."

 

LOL +1!

 

A lot of people haven't read Paul Ryans plan, he wants to INCREASE taxes for the middle class.  His previous plan called for doing away with corporate taxes and introducing a national sales tax.  Wake up people this is a shakedown!

Shameful's picture

So we have two phoney visions of the future, ok. Since it's as binding as any other political promise this is really just another boring piece of fiction. Should at least spice it up with a murder mystery...or is that Zimbabwe Ben's job "Who Killed King Dollar?".

Audacity17's picture

The "tax rate" is totally separate and apart from the "effective tax rate"...which includes exemptions, credits, deductions etc.  Corporations have high rates.....wait, what did GE pay again?? So Reuters blithely reporting that Ryan cuts the "rates" without any more detail is propaganda.

Argonaught's picture

Ding ding ding.  The exact same juvenille game is played by local gvt's with property tax.  The rate is irrelevant.  It's the levee that matters.  My property taxes have increased 3 years in a row all while my the trustees claim to have fought the good fight and held the line on the tax rate.  And people fall for this shit?  Oh...doesn't help that the appraised value of my home for tax purposes is also marked-to-myth.

youngman's picture
  • Obama wants a fundamental review of U.S. military missions and capabilities around the world. His plan proposes some $400 billion defense spending cuts that would not compromise U.S. defense capabilities.
  • how do they know this?  How would Obama know this..he was a community organizer..that is all.  He will still order them to war..but he will not give them supplies or the ROE´s to fight it....think Clinton and Blackhawk down.....what a crock.....and Obama says Social Security does not affect the "current" budget deficit...its the 5 years from now that it is the gorillia in the room...its over folks..plan for collapse

    vxpatel's picture

    i hope you go to afghanistan/iraq, your country needs you...

    LawsofPhysics's picture

    America better get its own house in order otherwise terrorists 6,000 miles away will be the least of its worries.

    If anyone wants to go to war, let them fund it with their own money.

    surfersd's picture

    If Omama had come up with any kind of cogent argument to meet half way the markets would be acting a lot differently. His speech just took the last legs out of $$ support. Not that it matter, but it is just as well we get on with it.

     

    Silver Bitchez.  Paas becomes a huge buy in here somewhere.

    Deepskyy's picture
  • Obama says Social Security is not contributing to the current debt and its financial future should be dealt with separately with bipartisan agreement.
  •  

    That is the only point you need to look at to understand just how doomed we are.  We have elected an idiot, an empty suit, a rabble rouser, and a bankster shill depending on which day of the week it is.

     

    OldTrooper's picture

    No, we've elected at least 530 idiots, empty suits, rabble rousers and bankster shills.

    Deepskyy's picture

    I stand corrected and retract my previous statement. 

     

    Dan Alter's picture

    Social Securuty is a pension insurance fund with about 2.5 trillion of US govt IOUs in it paying 2% interest. Pay the 30 year rate of over 4% and we would be talking about a SS tax decrease and a benefit increase. It is not broke, our country is because our politicians have literally stole our savings. Any private pension fund earning 2% would have its trustees put in jail for deliberately stealing the trust funds monies.

     

    In short Social Security is not an entitlement. It is massively over funded.

    jkruffin's picture

    So far, I only see two guarantees:

     

    1.  QE3 is now guaranteed

    2. Gold is now guaranteed $2000

     

    The Debt Limit ceiling is not going to be raised in time, and that is going to send yields soaring, and metals soaring to higher highs.

    Confused's picture

    "Ryan also calls for a tax law overhaul. His plan would cut the top corporate and personal tax rates to 25 percent, down from 35 percent."

     

    Why is this not surprising. 

    Audacity17's picture

    Please review my comment above before you make any more stupid ass comments.

    Confused's picture

    Yes. I'm familiar with the GE situation. My comment was more based on the fact that not only is this unrelated, but its the same old argument/point that gets trotted out all the time. The logic is laughable. 

     

    But thanks for your kind words. Its always nice to have a civil conversation that starts this way. 

    Audacity17's picture

    Please elaborate on this same old argument/point.

    Confused's picture

    Really? Tax cuts are often offered for the top earners and corporations. When we both know (as you were so eager to point out, but is common knowledge for most here) that large companies can easily minimize their tax liability. And the same applies for most top earners. 

     

    I appreciate the somewhat subdued tone this time. 

    Audacity17's picture

    It seems you have completely missed my point.  Reuters has mislead thousands of people, including you, by implying in their article that the Ryan plan just lowers the "rates".  Period, end of story.  It also eliminates "loopholes"...so the effective rate PAID could be HIGHER.  So this drivel from Reuters serves only to stoke class warfare, ie. Marx, and doesn't inform anybody.

    Confused's picture

    Again. I understand your point. My last comment was a response to your question. 

    And my original comment was more of a, rolling of the eyes, at the "lower rates" as part of the fix. Would you disagree that this often gets thrown out there as an option? After all, the article is about "Unbelievable" cuts. Suffice to say, I didn't start reading it expecting real solutions to the charade. 

    Thanks for responding. I see that you were only trying to inform me. And it is appreciated. 

    Audacity17's picture

    Apparently I mistook the meaning of your bold lettering.  I apologize.  I, for one, would throw out the whole tax code and replace the 16th amendment with a national sales tax at 20%.  Only a congressional supermajority of 3/4 would enable it to be changed.  This would be coupled with a constitutional amendment that limits spending to 18% of last year's GDP.  GDP would be clearly defined obviously to eliminate the game playing.

    Dionysus's picture

    Your civil discussion was refreshing, given some of the comment threads on this site.  Thank you both!

    OldTrooper's picture

    We should start a pool on how long the 'elimination of loopholes' lasts (if this passes - which is a big if).

    The Profit Prophet's picture

    The only concept crazier than trickle-down economics is unending Keynesian stimulus to support government largess.  There has to be a financially moral foundation for either of these concepts to work.....but all the US has is GREED!!! Wake-up dim bulb, for the next "stupid-ass" comment may be your own!

    T.E.I.N. everyone! 

    SayTabserb's picture

    Check the latest Treasury Statement for the month of March. $150 billion in income, $330 billion in outlays. $180 billion in one month, which you can annualize to $2.1 trillion. That is not 10% of GDP, and the GDP figure, in a classic of circular reasoning, is pumped up by govt. borrowing because of the deficit. We're in a state of exsanguination, and they know it but can't say it. There is no way to reduce the deficit without massively reducing the American standard of living, so both parties are just going to play an absurd game of pretending that it makes sense to run a budget where we spend $330 billion in March and take in $150 billion. The two figures don't even belong on the same balance sheet. The income should be from Belize and the outgoes should represent the entire European Union. We've had it. That's the budget plan.

    molotov's picture

    This is theatre for fools, the only topic is class warfare of the rich against the poor. 110 trillion dollars siphoned off through the federal reserve to the corporate kleptocracy and you morons are arguing about 4 trillion proposed deficit cuts. ... and the politics of right and left. What a fucking joke!

    economessed's picture

    Having the country we want will not come about because we vote for it.  Especially when we are presented with the false choice of "Democrat" or "Republican."

    Commander Cody's picture

    Obama: Pretend to support the poor and middle class while giving good head to the rich.  Ryan:  Give good head to the rich, screw everyone else.  Questions?

    weinerdog43's picture

    Nope.  Pretty darn succinct.  Thanks.