PROMISES, PROMISES: When Obama's Promises Conflict
A look at Obama's leading promises and what's happening with them:
The promise: Cut deficits by $4 trillion over a decade.
Prospects: Deals with Congress to cap spending and raise taxes on wealthier people, along with the resulting savings on interest payments on the debt, have already achieved a projected $2.6 trillion in deficit reduction for the years ahead. But the rest of the $4 trillion will be tough. To get there, he proposes a 10-year $583 billion tax increase, an additional layer of tax increases from slower indexing of tax brackets for inflation and modest curbs to federal health care programs, all helping to produce further interest savings.Republicans are so far standing firm against further tax increases and liberal Democrats are a tough sell on trimming entitlement programs and other spending. This, as the Congressional Budget Office warns that "such high and rising debt would have serious consequences" if unchecked. Among those consequences are reduced national savings and investment, a potential fiscal crisis and higher interest costs for the government. ___ Economy: The promise: An approach to deficit reduction that doesn't undermine the recovery or unduly burden the middle class. Also, cut some corporate tax rates, penalize those who shift work overseas and create 1 million manufacturing jobs by 2016. Prospects: Obama has had mixed success cutting the deficit without slowing growth. He struck a deal with Congress to avoid the "fiscal cliff," a set of tax increases and spending cuts in January. Businesses responded by stepping up hiring and spending. But he and Republican leaders allowed Social Security taxes to rise, cutting take-home pay for nearly all working Americans. He wasn't able to avoid $85 billion in automatic spending cuts that started March 1. Manufacturing has been creating more jobs but adding 1 million more by 2016 is unlikely. That would require 250,000 new factory jobs per year, nearly double the current pace. Overall, the unemployment rate dropped to 7.5 percent in April, the lowest in four years of recession and ragged recovery. The economy is growing modestly but steadily. It expanded at a 2.5 percent annual rate in the January-March quarter.
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