Blinder: GOP budget plan 'mean-spirited'

WASHINGTON, April 19 (UPI) -- President Barack Obama's U.S. deficit-reduction plan is a "huge improvement" over the House Republican plan, a former Federal Reserve official said.

The GOP plan that House Republicans passed Friday, promising to cut the deficit $5.8 trillion in 10 years through program cuts, "is breathtakingly mean-spirited" and actually trims the budget only $4.3 trillion, "barely enough to cover the tax cuts," Princeton University economics and public affairs Professor Alan S. Blinder said in an op-ed article in The Wall Street Journal Tuesday.

The $1.5 trillion difference between $5.8 trillion and $4.3 trillion comes from the GOP plan's overstatement of interest savings by $200 billion and incorrect assumption the Iraq and Afghanistan wars will "go on forever at current spending rates, rather than phasing down in accord with current policy -- a $1.3 trillion error, said Blinder, who served on President Bill Clinton's Council of Economic Advisers in 1993 and 1994 and was vice chairman of the Federal Reserve System's board of governors from June 1994 through January 1996.

The true agenda of the Republican budget blueprint, prepared by U.S. Rep. Paul Ryan, R-Wis., is "to shrink the government drastically" to levels last seen in 1951, "before Medicare and Medicaid, before the departments of Health and Human Services, Housing and Urban Development, Education, Energy, Transportation, Veterans Affairs and Homeland Security," Blinder said.

Ryan's office did not immediately respond to United Press International phone and e-mail requests for comment on Blinder's assessment.

"Within days of Mr. Ryan's announcement, President Obama chimed in with his own ideas on deficit reduction -- another huge improvement over the Ryan plan," Blinder said after praising last year's bipartisan presidential commission plan that failed in the Senate.

Obama's plan -- which the president outlined April 13 and planned to tout in three campaign-style meetings Tuesday through Thursday this week, would achieve "comparable deficit reduction [to that of Ryan's plan] without further gilding the New Gilded Age," Blinder said.

Blinder said Ryan's plan would create a time similar to the original Gilded Age in the late 1800s, when super-rich industrialists and financiers such as John D. Rockefeller, Andrew Mellon, Andrew Carnegie and J.P. Morgan were attacked as "robber barons" by critics for allegedly cheating ruthlessly to get their money and corrupting lawmakers.

Obama's plan promises to reduce the deficit $4 trillion over 12 years, while retaining "core Democratic values," through a mix of deep cuts in military and domestic spending, higher taxes on the wealthy and changes to social-welfare programs.

Obama's first town hall meeting is to be held Tuesday morning at Northern Virginia Community College, 12 miles southwest of Washington, the White House said.

This will be followed Wednesday with a similar session at Facebook Inc. headquarters in Palo Alto, Calif., and Thursday in Reno, Nev., which Obama hasn't visited since running for president.