Because the April Obama deficit reduction plan played out over a 12-year time horizon, and the deficit reduction plan released yesterday has a more traditional 10-year horizon, some of the presumed changes aren’t really big changes at all. In fact, the plan reads like a rehash of that April document, with the American Jobs Act attached to it (Importantly, this is a document to the Super Committee, meaning that the White House expects them to entertain the AJA in their final recommendations).

That means that a lot of the plans in there are familiar – and heck, there have been about eleventy-million deficit reduction plans by now, so it’s not clear there are any new ideas. But that doesn’t mean that none of these ideas are objectionable, even if the general strategy for the plan is to offer a maximalist solution rather than undertake a negotiation. In fact, because it’s a maximalist type of plan, we can see many of these ideas as an indication of true White House policy beliefs. Therefore, in addition to the plans for progressive taxation and jobs, you have to consider these bits:

• A couple things I missed from the health care trims: first, a $3.5 billion cut to the Public Health and Prevention Fund, which was just enacted last year as part of the Affordable Care Act. This fund would “assist state and community efforts to prevent illness and promote health”, and HHS has already started giving grants. It’s targeted at things like identifying chronic diseases and targeting specific actions, like poor diet, tobacco and alcohol use, or physical inactivity, that can lead to them. This is a pretty large hit to this fund, nearly 25%.

• There are specific cuts to veteran’s health care in the plan:

The Obama plan proposes a $200 annual fee for retired military families who want to continue coverage under a Tricare-for-Life program that supplements Medicare coverage for veterans over 65. The proposal would save the government $6.7 billion over 10 years, according to the White House.

The president’s proposal would also eliminate co-pays for mail-order drugs and institute a percentage co-pay rather than a flat-fee for in-pharmacy purchases. The White House says the move will encourage military families to use less expensive prescriptions, and save $20 billion over 20 years […]

“Failing to meet the promises we have made to our troops would be unjust and immoral,” (Presidential candidate Ron) Paul said in an open letter to Obama. “Our military men and women have fought bravely. In exchange, our country made a promise to them, and we must honor it.”

It’s fun to see libertarian Ron Paul vigorously defend socialized medicine, but this would have an impact on Tricare patients, even if it’s a minimal one.

• There’s a lot of folderol about waste, fraud and abuse in the plan, but one of those fraud-fighting steps would be to eliminate a provision in the Communications Act of 1934 that would allow US government debt collectors to contact cell phones for repayment of debts. Since the government owns or backs practically all of the nation’s mortgages, this would lead to higher harassment of troubled borrowers, among other things.

• There’s a postal service rescue plan in there, which would phase out Saturday delivery and raise the cost of stamps, as well as closing hundreds of offices and mail processing facilities. This stops short of an innovative re-imagining of the postal service as a site for simple banking or a provider of fiber-optic and Internet services (is broadband cable not a “Post Road”?). But it also refunds the postal service nearly $7 billion in overpayments it has made to its retiree fund.

• There are $130 billion in fees buried in the plan, not counting toward taxes. The fees would include a wage reduction for federal employees (they’re calling it a tax increase), who would have to pay more into their pensions (about $21 billion over 10 years), an increased airline security fee ($25 billion over 10 years) and an increase to mortgage fees charged by Fannie Mae and Freddie Mac. I actually like this one:

Another proposal would charge $4 an acre on non-producing oil and gas leases on federal lands, raising $1 billion over a decade. The idea is to prod energy companies to get their leases into production or give them up and allow others to develop them.

There are plenty of other ideas in there, from selling off “excess” federal property (easier said than done) and wireless spectrum to increasing fees on corporate jets with excise taxes to capping the pay on federal contractor executives to reducing subsidies to crop insurance plans and certain types of flood insurance to a commission to review military retirement benefits, a serious sacred cow. They even throw back in the Financial Crisis Responsibility Fee that they all but gave up on previously, to generate back all the losses from the TARP.

Some of these are good ideas, some not so much. But they are important as a signpost for federal policy and even what you might see out of a Super Committee recommendation in the next weeks and months.

UPDATE: This is important, from James Horney of CBPP:

The only people largely shielded from cuts under the President’s plan are the most vulnerable Americans — children, the disabled, the blind, and the elderly with very low incomes. In light of the recent Census data showing a historically high rate of poverty, the President wisely followed the core principle established by the Bowles-Simpson commission report that deficit reduction should not push more Americans into, or deeper into, poverty.

David Dayen

David Dayen

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