Pres. Obama “Placater-in-Chief”
This year is a little different. Fewer cheerleaders are out, probably because this budget is a joke; nothing more than a political shout out to critical and favored liberal voting blocks. For example, last year, Senate Majority Leader Harry Reid called President Obama’s FY2012 budget a “serious attempt” (a link to this press release no longer exists, surprised?). This year, however, Senator Reid has remained silent. In addition to Senator Reid, other Senate Democrats have changed their tune on the President’s budget:
Senate Budget Chairman Kent Conrad (D-ND):
Then: “The President’s budget gets it about right in the first year.”
Now: “We will need to do more to put the nation on a sustainable long-term fiscal path.”
Senator Tom Udall (D-NM)
Then: “…it’s a solid starting point”
Now: “While I don’t agree with the entirety of his request, his budget works toward deficit reduction by meeting the deep automatic spending cuts that were set into motion last year.”
Additionally, Senators who were silent last year – such as Sens. Joe Lieberman (I-CT) and Mark Pryor (D-AK) – came out against the budget this year. Senator Pryor (up for re-election) even said, “This budget proposal is simply a case of misplaced priorities when it comes to Arkansas.”
Why should they embrace a proposal that the Washington Post claims, “begins with a broken promise, adds some phony policy assumptions, throws in a few rosy forecasts and omits all kinds of painful decisions.” The Washington Examiner explained the bottom line:
“Over the next decade, Obama’s budget raises taxes by $1.9 trillion, raises spending $2.7 trillion, and increases the debt $3.6 trillion. Higher taxes, higher spending and more debt — that is Obama’s plan for the United States.”
And they’re right. The President’s budget will increase the national debt to $25 trillion by October of 2021 – which is far above what our economy actually produces. It predicts massive deficits each year that never fall below $575 billion – about $125 billion higher than President Bush’s highest deficit.
That takes care of the overall takedown. But in addition to that, we had to go through the President’s speech yesterday and comment on his remarks:
“Now, the truth is, the skills and training you get here will be the best tools you have to achieve the American promise — the promise that if you work hard, you can do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.”
Once you work hard and achieve the American dream, be prepared for the President and the left to vilify you and try to take more of your money away.
“Because we’ve got a choice: We can settle for a country where a few people do really, really well, and everybody else struggles to get by. Or we can restore an economy where everybody gets a fair shot, everybody does their fair share, everybody plays by the same set of rules — from Washington to Wall Street to Main Street. That’s the America we believe in.”
That is the America we believe in; that if you work hard you can succeed. Unfortunately, it does not appear that is the America that President Obama believes in. He seems to believe that you can only succeed if someone who has already succeeded loses some of their success. He seems to believe that doing your fair share doesn’t mean actually working hard and contributing to society (as opposed to letting the government take care of you); he believes it actually means that the successful among us – those who create jobs and pay the most in income taxes – should simply pay even more.
We want everyone in America to have the same opportunity. How they use that opportunity all depends on how hard you work.
“But over the last 23 months, we’ve added 3.7 million new jobs.”
Okay, but the economy has lost a net 1.5 million jobs.
“The last thing we need is for Washington to stand in the way of America’s comeback.”
Agreed! Now if only Washington would get out of the way and stop threatening higher taxes, more regulations and stonewalling domestic energy exploration and the Keystone XL pipeline that would create jobs and lower energy costs.
And speaking of Washington standing in the way, isn’t it interesting the economy has started – albeit minimally – to recover quicker once Republicans got in and stopped President Obama and the left’s intrusions into the economy?
“Part of our job is to bring down our deficit. And if Congress adopts this budget, then along with the cuts that we’ve already made, we’ll be able to reduce our deficit by $4 trillion by the year 2022 — $4 trillion.”
Not so fast. As we posted yesterday, the President’s budget claims reductions already enacted by the Budget Control Act of last year, and it actually replaces those savings with new spending. It also assumes that the 2001 and 2003 tax cuts for successful Americans will expire, and that the only effect that will have on the economy is higher revenues. In truth, that big of a tax hike will likely decimate hiring practices, leading to higher unemployment and less revenues.
The majority of the remaining deficit reduction comes from massive tax hikes. The budget does cut spending in some areas, but increases spending in others, for a grand total of $273 billion of future deficit reduction. Far from $4 trillion, and an embarrassment to the problems we face as a nation; problems made worse by this administration.
The budget also assumes savings from winding down the wars. These “savings” are pure gimmickry, as that money was borrowed to begin with. The Committee for a Responsible Federal Budget put it best:
“When you finish college, you don’t suddenly have thousands of dollars a year to spend elsewhere — in fact, you have to find a way to pay back your loans.”
But that is the strategy behind using war “savings” to pay for other spending programs.
“I’m proposing some difficult cuts that, frankly, I wouldn’t normally make if they weren’t absolutely necessary. But they are. And the truth is we’re going to have to make some tough choices in order to put this country back on a more sustainable fiscal path.
“By reducing our deficit in the long term, what that allows us to do is to invest in the things that will help grow our economy right now. We can’t cut back on those things that are important for us to grow. We can’t just cut our way into growth. We can cut back on the things that we don’t need, but we also have to make sure that everyone is paying their fair share for the things that we do need.”
He basically admits the liberal “reform” agenda in these two paragraphs: “cut” spending, so that you can spend that money elsewhere. It’s not a “cutting” strategy,” it’s a “shifting” strategy. And sometimes, what is cut in favor of what is spent seem astounding.
Take yesterday’s blog from The Heritage Foundation, where it is exposed that the President’s budget eliminates funding for at-risk children in the D.C. Opportunity Scholarship Program, which has helped over 1,600 low-income children attend better schools for a brighter future. While this funding is eliminated, the taxpayer subsidy to purchase a Chevy Volt will increase from $7,500 to a whopping $10,000!
Now, keep in mind that the average income of someone who purchases a Chevy Volt is $175,000 per year. So, the budget actually subsidizes successful people while those struggling in subpar schools get the boot. What was that about “fairness”? I guess that only applies outside of the “green” energy industry.
So, we don’t need scholarships for students who want a better education, but we do need to pay people to buy an expensive, underperforming vehicle?
“We need to restore American manufacturing by ending tax breaks for companies that ship jobs overseas, giving them to companies that are creating jobs right here in the United States of America.”
In addition to this further cluttering of the tax code, the President’s budget wants to provide tax cuts for those who invest in companies here in America. Wait, what? With all of his rhetoric against the 15% capital gains tax (an investment tax which he wants to increase to 30%) he’s okay with a lower tax, so long as investors invest in American companies?
The President essentially wants to punish companies who take advantage of global competition. Some American companies find it difficult to make a profit with the high U.S. corporate tax rate, so they ship jobs and capital overseas to take advantage of lower tax rates. This is how competition is supposed to work: because we are losing jobs to countries with lower tax rates, we should lower our tax rate so that companies will want to come here for the lower rate. In President Obama’s world, however, companies should be forced to pay the higher U.S. tax rate no matter where they set up their business.
“We need to reduce our dependence on foreign oil by ending the subsidies for oil companies, and doubling down on clean energy that generates jobs and strengthens our security.”
We could increase our access to all types of energy and create jobs (which is supposed to be the central theme of the President’s agenda) by approving the Keystone pipeline. But alas, the President said no, favoring to drive up gas prices with tax hikes and force the American people into costly alternatives that are unaffordable at the moment.
“So I want this Congress to give our schools the resources to keep good teachers on the job, and reward the best teachers. And in return, they also need to give schools the flexibility to stop just teaching to the test, and replace teachers who aren’t helping kids learn.”
That sounds like merit pay, but the teachers unions will never allow it. It is also a renewed call for his education stimulus that claims to pay to keep teachers on the job, when in reality the money would be used to hire administrators, since school budgets are decided in the summer. Also, as we’ve said over and over again, when the money runs out, the teachers will be let go anyway, because local budgets can’t afford to keep them without the federal funds.
“We’re saying to Congress, now is not the time to make school more expensive for young people.”
As we outlined two weeks ago, the President’s “plan” for higher education costs will actually inflate tuition costs. By increasing education funding, colleges have no incentive to cut costs. The President says colleges that don’t slow the rate of tuition costs won’t receive federal aid, but all that does is get those colleges to reduce their spending in order to get the federal aid, and then use that money to spend more anyway. It doesn’t fix the problem.
“Right now, we’re scheduled to spend nearly $1 trillion more on what was intended to be a temporary tax cut for the wealthiest 2 percent of Americans. We’ve already spent about that much. Now we’re scheduled to spend another trillion. Keep in mind, a quarter of all millionaires pay lower tax rates than millions of middle-class households. You’ve heard me say it — Warren Buffett pays a lower tax rate than his secretary. That’s not fair. It doesn’t make sense at a time when we’ve got to pull together to get the country moving.”
How can the President continue to perpetuate the lie that the 2001 and 2003 tax cuts cost money when it’s been discredited? Oh wait, that’s because the left refuses to believe the truth. The President also continues the myth that Warren Buffett pays a lower tax rate than his secretary. We took this apart in our State of the Union breakdown last month.
It is also dubious to claim that a quarter of all millionaires pay lower tax rates than millions of middle-class Americans. The effective tax rate of those earning between $50,000 and $75,000 a year is about 15%, according to the Tax Policy Center. The average effective tax rate of those earning more than $1 million is 29.1%, nearly double.
“I don’t need a tax break. We don’t need to be providing additional tax cuts for folks who are doing really, really, really well.”
Mr. President, if you feel you don’t pay enough in taxes, you can donate directly to the treasury. Or better yet, you can donate more than 1% of your income to charities!
“Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep investing in everything else — education, clean energy, a strong military, care for our veterans? We can’t do both — we can’t afford it.”
We also can’t afford to pay for education, the President’s clean energy utopia, a strong military (not the President’s vision of a hollow military somehow able to fight all the threats we currently face) and total care for our veterans simply by raising taxes on the wealthy. This is an absurd claim that he is making to the American people: that we can pay for everything in the world if job creators would just pay more in taxes. In order to pay for all of the President’s spending, his targets would need their effective tax rate to hover around 100%, assuming they would work just to give the government all their money. It’s ludicrous and dangerous to make that claim to the American people.
“That’s not class warfare. That’s common sense. That’s common sense.”
No, commonsense is knowing that you cannot raise taxes on successful Americans to fund the country as President Obama sees it.
“Everybody here — I want everybody here to go out there and do great. I want you to make loads of money if you can.”
He forgot to add, “so I can take it.”
“And given where our deficit is, it’s just a matter of math that folks like me are going to have to do a little bit more.”
It’s not a matter of math. In the 1980’s and the early 90’s, Republicans were told that for every dollar of tax increases, they would receive 2 or 3 dollars worth of spending cuts. And what happened? The tax increases went into effect, but the spending cuts never emerged; in fact, spending increased!
We’re not falling for that again! Show us the meaningful spending cuts first.
The President’s entire budget serves a single purpose: getting him re-elected. It’s filled with handouts to his key voting blocks, like unions and younger Americans.
While running in 2008, he promised to cut the deficit in half by the end of his first term. At that time, the highest deficit was about $450 billion, meaning his goal was a deficit of around $225 billion. Hah! His lowest deficit was $1.29 trillion, nearly 6 times higher than his goal. Notice what he promised: to cut the deficit (which we all took to mean Bush’s deficit) in half, not to dramatically increase the deficit and then cut his own deficit in half.
In the next ten years, the President doesn’t get to his assumed goal. He doesn’t even get to half of his own current deficits until after he’s left office. So the moral of his re-election budget?
Re-elect me, and hopefully my successor will deal with the debt and deficit.