This is from an editorial entitled “Obama's Not So Grand Offer” from the March 7 issue of The Wall Street Journal — so you know it won’t be pro-Obama.
It’s about the lack of seriousness with which Obama approaches government budget problems (having said that, we’re in the position we’re in because just about no one has approached them seriously for decades … so why should Obama be any different),
Here’s an idea we’re going to come back to later in the semester:
Mr. Obama says he's prepared to make tough choices on Medicare and other entitlements … with his plan to save $400 billion. …
To put $400 billion in perspective, Medicare's long-term "unfunded liability"—the gap between promised benefits and the program's ability to fund them—is roughly $42.7 trillion. …
You think the government has a spending problem now? What about the far larger amount of spending they’ve already signed off on, without figuring how to pay for it (or even if they can)?
Earlier in the semester I explained how the CPI is constructed with the Laspeyres’ method, which is biased on the high side. This means that every time social security payments are adjusted for inflation they are adjusted upward by too much: in short, a free lunch for seniors:
Outside of the left-right fringes, there is broad bipartisan agreement about changing the consumer price index slightly to more accurately measure real inflation in the economy. … But Mr. Obama can't bring himself to support it, while pretending that he does.
Known as "chain weighted" CPI, this index reflects how consumers change their purchasing habits when prices change. The Congressional Budget Office says Social Security and other benefits would fall by about $216 billion over a decade.
So Obama is against making sure that seniors aren’t compensated less for the costs of inflation than the taxpayers who usually aren’t compensated at all. That should tell you who’s side he’s on.
These last two points are just trivia compared to the rest:
… Some $120 billion, or 30% of the package [devoted to reducing healthcare spending], comes from a catch-all category called "other health savings" filled with initiatives that are so micro the White House doesn't itemize them. [emphasis added]
Yep … $120B they can’t even be bothered to itemize. You know … when I catch my kids in a fib the first thing I ask them is to start itemizing the details. It works every time.
Then there’s this part of the plan:
He can save $45 billion in part by reducing "improper payments," the Washington euphemism for cutting checks in the wrong amount, to the wrong person, for the wrong reason or all three.
It's good to know the President is in favor of the bureaucracies not accidentally sending money to people who didn't earn it …
That one’s a real sign they’re thinking outside the box.