NEW YORK (CNNMoney.com) -- The "Pledge to America" spells out what House Republicans would do if they were in charge, and the economy is issue No. 1. The 48-page document is full of broadly worded ideas (not to mention glossy photos of cowboys and Mt. Rushmore). We've compared their prescriptions with those of the White House. On many issues, the rhetoric is surprisingly similar, though on two, there is no middle ground: health care (the Pledge calls for full repeal) and stimulus (Republicans want to put a halt on all unspent funds). -- Charles Riley
|Extend tax cuts for (almost) everyone
The Obama plan would extend the Bush tax cuts for almost all Americans, but would let them expire for families earning more than $250,000. Taxing the rich would raise $700 billion, helpful on the deficit front. But extending for 98% of the country would still cost $3 trillion. "Extending these tax cuts is right. It is just. It will help our economy because middle-class folks are the folks who are most likely to actually spend this tax relief." – President Obama.
|Bush Tax Cuts||Extend Bush tax cuts for everyone
The Pledge says extending the tax cuts will help protect "middle-class families, seniors worried about their retirement, and the entrepreneurs and family-owned small businesses." Total cost: $3.7 trillion. That’s a big part of the reason why budget experts say the Pledge will not reduce the deficit.
|We will restore fiscal discipline
Obama wants to cut the deficit to 3% of GDP by 2015. To help restore fiscal discipline he has, among other things, called for things like a 3-year nondefense discretionary spending freeze (not too unlike the GOP pledge in nature), and thrown his support behind new pay-as-you-go rules, so that many (although far from all) new measures will be paid for and therefore not add to the deficit. Nevertheless, his most recent budget proposals only would get the deficit to 4.3% of GDP by 2015, and overall would add $10 trillion to the nation’s debt over the next decade, according to the CBO. Roughly a third of that $10 trillion is attributable to the permanent extension of the middle class tax cuts, which Obama wanted to be exempt from pay-go rules.
|Spending||Roll back government spending
The Pledge promises to put the country "on a path to balance the budget and pay down the debt." Just how that would be accomplished however is far from clear. The pledge calls for spending cuts of at least $100 billion in the first year, but there are no details on what specifically would be cut. It also calls for the cancellation of all unspent Recovery Act funds and for the establishment of budget caps to limit federal nondefense discretionary spending. But budget experts say limiting the cuts to such a small slice of the federal budget is not likely to make enough of a dent to compensate for the $3.7 trillion that would be added to the country’s debt by making the Bush tax cuts permanent.
|TARP is already ending. And you started it!
Treasury Secretary Tim Geithner argued recently that TARP has been a huge success: "If you are a conservative Republican, you can celebrate the fact that we solved the most dangerous part of this financial crisis largely with private capital, not public capital." Meanwhile, the plan to end TARP is already underway, with the program set to expire Oct. 3.
The GOP says it will "end TARP once and for all," and that "Americans are rightly outraged." But TARP was started during the Bush Administration, many congressional Republicans voted for it, and it was largely successful at stabilizing financial markets. What’s more, current losses are estimated at less than $100 billion. And, by the way, it’s already set to end on Oct. 3.
|Reform Fannie and Freddie
Like the Republicans, the White House wants to change Fannie Mae and Freddie Mac. "We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support," said Geithner recently.
|Fannie Mae and Freddie Mac||Reform Fannie and Freddie
The GOP is calling for the privatization of Fannie Mae and Freddie Mac, the twin mortgage giants that were taken over by the government in the midst of the financial meltdown. The Pledge says: "We will reform Fannie Mae and Freddie Mac by ending their government takeover, shrinking their portfolios, and establishing minimum capital standards."
|Protect, review programs
Obama wants increased oversight of Social Security, Medicare, and Medicaid to make sure that these programs are run "efficiently and effectively." More importantly, the White House understands the need to fix the programs’ long-term solvency, something the bi-partisan commission appointed by Obama is expected to address in a report on Dec. 1. Recommendations will likely include a combination of tax increases and benefit cuts.
|Social Security and Medicare||Protect, review programs
The Pledge calls for the protection of entitlement programs for both today's seniors and future generations. And that means "a full accounting of Social Security, Medicare, and Medicaid, setting benchmarks for these programs and reviewing them regularly, and preventing the expansion of unfunded liabilities." Everybody – including Democrats – wants that, but accomplishing it is no small feat.