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HonestChieffan
02-15-2011, 09:53 AM
President Obama’s 2012 Budget Builds on Failures of the Past
Published on February 14, 2011 by J.D. Foster, Ph.D. WEBMEMO #3152

“Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt.”

These words, a quote from President Obama, were displayed prominently on the Office of Management and Budget Web site the morning his fiscal year (FY) 2012 budget was released. Fine words. Unfortunately, his budget is almost a line-by-line repudiation of this policy. Under the President’s budget, the deficit in 2011 will hit a new record of $1.645 trillion, and the national debt held by the public over the next 10 years would nearly double, rising by $7.2 trillion.[1]

The Tale of the Tape
The President’s budget is couched in terms of restraint and fiscal discipline. The numbers tell a different story, a story where past is truly prologue. A few of the vital statistics:
From 2009 to 2011:

Total discretionary spending soared from $1.2 trillion to $1.4 trillion, an increase of over 16 percent.
Total mandatory spending jumped from $2.1 trillion to $2.2 trillion, an increase of almost 4 percent.
The national debt jumped from $6.6 trillion to $9.5 trillion, a whopping increase of 43 percent.

Over the same period, the nation shed 3.3 million jobs despite a series of unprecedented attempts to stimulate the economy with deficit spending, which contributed significantly to this unfortunate fiscal record. The President cannot be blamed for the financial crisis and Great Recession that ensued, but he certainly shares in the blame for the failure of his debt-exploding policies in response.

Building on this dismal record, the President’s budget features these vital statistics:
FY 2012 Discretionary Spending. Having pushed discretionary spending up rapidly in the prior two years, the President proposes to reduce 2012 discretionary spending by 5 percent, though he does so only by virtue of three simple and obvious budget gimmicks:
Redefining Pell grants as mandatory spending. Stripped of this gimmick, discretionary spending jumps by $14 billion in 2012.[2]

Reclassifying $54 billion of surface transportation spending from discretionary spending to mandatory spending.[3]

Spending the peace dividend. The budget proposal includes spending for military operations in Iraq and Afghanistan, referred to as “overseas contingency operations,” as discretionary spending and reduces funding for these operations by $38.2 billion in 2012.[4]
Reversing these budget tricks lifts 2012 discretionary spending by $106.2 billion for an overall $31 billion increase in discretionary spending.

Earmarks. Once again, the President has promised to oppose earmarked spending. He also claimed that the 2009 stimulus bill was free of earmarks. One can only hope he is more vigorous in keeping his promise going forward than he was in the past.
Total Spending. Under the President’s budget, total spending would rise 49 percent over the next 10 years of the budget window. Even after inflation, this represents a 30 percent increase in spending.

Taxes. The President continues to play games with the scoring of tax policy. For example:
He proposes to raise the top tax rate on capital gains and dividends to 20 percent from 15 percent and lists this as a tax cut that reduces revenues by $124 billion over 10 years.
He proposes to extend the Bush tax cuts for low- and middle-income families and correctly includes this extension in the revenue baseline. But then, breaking with past practice, he leaves the tax relief for upper-income individuals and small businesses out of the baseline and thus conveniently has no reporting of the resulting tax hike.

He proposes to prevent the Alternative Minimum Tax from rising in 2013, and then in classic Washington style proposes $321 billion in new tax hikes to offset the cost of not raising taxes.

Debt. Under the President’s budget, despite the proposed tax hikes, publicly held debt (net of financial assets) rises from $9.5 trillion in the current year to $16.7 trillion by 2021.


A Most Forgettable Budget
Despite the passage of another year, a prodigious increase in the national debt, and a momentous election, the most substantial policy change in the budget from last year was the shift from a deep blue to a two-tone paler blue. The budget deficit is larger, blowing past 2010’s post-war record of 8.9 percent of our economy to hit a new high of 10.9 percent in 2011. The President continues to speak of painful spending cuts even as spending continues to soar. He continues his call for future tax hikes driven by ideology. He continues to express concern over budget deficits while offering only gimmicks in the short term and silence for the long-term problems for which he appointed a now-ignored deficit reduction commission.

A President’s budget is a comprehensive statement of the policies he favors, either by exercising the authorities he already has under current law or by working with Congress to provide new authorities for new policies. It is also a comprehensive statement of how he believes federal spending and revenues ought to evolve over the coming years in the aggregate, and by broad category, contingent on the enactment of his policies and the expected trajectory of the economy.

While a flood of details will be announced, discovered, and analyzed over the coming days and weeks, the initial impression of the budget must be based on broad strokes. The broadest stroke of all is that, under the President’s announced policies, the federal government would be expected to push total debt to $16.7 trillion over the coming decade.
It is readily apparent from this budget that the President simply did not get the message of the last election and intends to press forward unbowed and unchecked with his big government, big debt, high-tax agenda. The last election was largely and loudly a repudiation of the President’s approach to governing, and yet despite some atmospherics to the contrary, his budget makes clear that he intends no course correction, no mediation, and ultimately no compromise.

Congress should study the President’s budget carefully to understand in the main the path the country should not take. Then—beginning with the upcoming debate on a continuing resolution for appropriations, then the budget resolution, then the debate on the debt limit, and on through the year—Congress should chart a very different course, one of strong, immediate spending restraint and strong economic growth to restore the nation’s fiscal house to order.

The Deficit Reduction Commission
President Obama created the National Commission on Fiscal Responsibility and Reform by executive order on February 18, 2010, headed by former Senator Alan Simpson (R–WY) and Erskine Bowles, former chief of staff to President Bill Clinton. The Simpson–Bowles Commission’s mission, according to the executive order, was “to identify policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.” The history of such commissions in the modern era is long, distinguished, and discouraging. Despite the seriousness of the issue and the earnestness of the participants, the commission’s one fatal flaw at the outset was that it would not report until after the mid-term elections.

The delay worked—temporarily. The President’s 2012 budget ignores every essential observation and proposal advanced by the Simpson–Bowles Commission. The budget lacks any serious, substantive proposals to address runaway Medicare spending. It lacks any serious, substantive proposals to slow benefit growth and thereby strengthen Social Security. Ditto for Medicaid.

Despite his assertion in the Budget Message of the President that “growing the economy and spurring job creation by America’s businesses, large and small, is my top priority,” the President’s budget includes (yet disguises) a massive tax hike on small businesses and investors and is otherwise bereft of ideas for reforming the income tax to strengthen the economy in the future. Even the tax hikes included in the budget, unwise as they are, fail to reflect the vision and boldness of Simpson–Bowles.


Leadership Delayed Is Leadership Denied
In short, despite tax hikes and budget gimmicks, the President proposes a budget that keeps the federal government on a thoroughly irresponsible and unsustainable course. While acknowledging the looming red ink menace, it embraces rather than tackles it. His language says, “Go long, be bold”; his play call says punt on third down.
The American system of government is intended to compel opposing forces to struggle, for in the struggle is refinement, improvement, and a crude but effective system of checks and balances. However, this system generally cannot function to solve difficult problems when the President thoroughly abdicates his leadership role. With this budget, the President has done just that, and now Congress must find its own way to regain control of the nation’s finances.

J. D. Foster, Ph.D., is Norman B. Ture Senior Fellow in the Economics of Fiscal Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

The Mad Crapper
02-15-2011, 10:00 AM
“Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt.”

The man is a liar, who continues to destroy and deceive, and his little sycophants like amnoreek and dittsie continue to attack his critics.

HonestChieffan
02-15-2011, 10:10 AM
The man is a liar, who continues to destroy and deceive, and his little sycophants like amnoreek and dittsie continue to attack his critics.


Well one thing about a budget in writing, the silly its Bush's fault lines are no longer valid when discussing a budget that is all Obama's. So for all intents and purposes, unless you are discussing recent history and want an endless debate with no detail, those conversations are of no value.

fan4ever
02-15-2011, 11:37 AM
This is a little off topic, but what the hell is the Republican leadership thinking in verbalizing their intent on cutting Social Security as part of balancing the budget?

I mean of all the entitlement programs out there, naming SS in particular, they are cutting their own throats in 2012. I know realistic and drastic measures have to be taken, but alienating a base you have to count on for votes is going to put Obama back in office...especially if he's coming off protecting SS.

I don't get how these guys think politically.

Amnorix
02-15-2011, 11:43 AM
Any party who takes dramatic action on the deficit, short of something utterly stupid, is more likely than not to pick up my vote in 2012.

HonestChieffan
02-15-2011, 11:46 AM
This is a little off topic, but what the hell is the Republican leadership thinking in verbalizing their intent on cutting Social Security as part of balancing the budget?

I mean of all the entitlement programs out there, naming SS in particular, they are cutting their own throats in 2012. I know realistic and drastic measures have to be taken, but alienating a base you have to count on for votes is going to put Obama back in office...especially if he's coming off protecting SS.

I don't get how these guys think politically.


The opposition will position it as cutting. They will likely position it as taking away and make it out to be far worse than it is. Thats the sick part of the fix....it has to be fixed and there are only so many ways to do it. But SS is the easiest to do with a bit more on the FICA end, and start retirement benefits at a older age than is in place now. It can be stairstepped so no one above 55 is impacted, the next group would feel some moderate change and the youngest would have more options.


But my view is that the democrats will use anything they can get to scare the hell out old folks and demonize any republican effort no matter how good the idea is.

Donger
02-15-2011, 11:46 AM
This is a little off topic, but what the hell is the Republican leadership thinking in verbalizing their intent on cutting Social Security as part of balancing the budget?

I mean of all the entitlement programs out there, naming SS in particular, they are cutting their own throats in 2012. I know realistic and drastic measures have to be taken, but alienating a base you have to count on for votes is going to put Obama back in office...especially if he's coming off protecting SS.

I don't get how these guys think politically.

As you wrote, they are doing what has to be done. People who get that won't not vote for them because of it, quite the contrary. Those who choose to continue to ignore the problem?

I don't really care about them.

Donger
02-15-2011, 11:46 AM
Any party who takes dramatic action on the deficit, short of something utterly stupid, is more likely than not to pick up my vote in 2012.

:thumb:

fan4ever
02-15-2011, 11:57 AM
As you wrote, they are doing what has to be done. People who get that won't not vote for them because of it, quite the contrary. Those who choose to continue to ignore the problem?

I don't really care about them.

I agree with you guys 100%, but these guys are setting themselves up for being hammered by the left and the media...and it will work unfortunately because IMO a majority of the voting populace aren't aware that this is absolutely necessary, and they'll buy whatever half truths are spoon fed to them...and Obama's got a second term...which scares the hell out of me.

Mr. Kotter
02-15-2011, 12:06 PM
This is a mess that won't be fixed by focusing ONLY spending. Yes, targeted spending cuts need to be seriously considered along with entitlement reform. However, at some point the issue of declining revenues must be addressed.

Until we address BOTH sides of the ledger, we'll continue to demogue and demonize our political adversaries...while doing nothing substantive to really address the problem.

The most sad part of it is that no one....okay, virtually no one with real power at least, seems willing to admit that. Tax reform, entitlement reform, and military spending are sacred cows.

Until that changes, we are doomed to keep beating a drum that no one in politics seems to want to hear.

Donger
02-15-2011, 12:07 PM
I agree with you guys 100%, but these guys are setting themselves up for being hammered by the left and the media...and it will work unfortunately because IMO a majority of the voting populace aren't aware that this is absolutely necessary, and they'll buy whatever half truths are spoon fed to them...and Obama's got a second term...which scares the hell out of me.

They are going to get hammered regardless. May as well actually try to accomplish something in the mean time.

mnchiefsguy
02-15-2011, 12:09 PM
This is a mess that won't be fixed by focusing ONLY spending. Yes, targeted spending cuts need to be seriously considered along with entitlement reform. However, at some point the issue of declining revenues must be addressed.

Until we address BOTH sides of the ledger, we'll continue to demogue and demonize our political adversaries...while doing nothing substantive to really address the problem.

The most sad part of it is that no one....okay, virtually no one with real power at least, seems willing to admit that. Tax reform, entitlement reform, and military spending are sacred cows.

Until that changes, we are doomed to keep beating a drum that no one in politics seems to want to hear.

This may or may not be true, depending on your opinion, but I think it is reasonable to expect that the government cut it's budget as much as possible before implementing more taxes. That is what families do, they cut their budgets as much as possible, and if it does not work, then they start looking at second jobs, etc. to increase their income. The government should do the same. Until they start showing that they can responsibly spend the money they are already getting, people are going to be less inclined to want to give them more.

fan4ever
02-15-2011, 12:12 PM
They are going to get hammered regardless. May as well actually try to accomplish something in the mean time.

Well that's a good point...you just have to pick and choose how you're going to take you licking...and try to limit the damages.

Donger
02-15-2011, 12:18 PM
Well that's a good point...you just have to pick and choose how you're going to take you licking...and try to limit the damages.

Take a look at the other thread about Obama's proposal. The left is already vilifying HIM.

Amnorix
02-15-2011, 12:26 PM
Take a look at the other thread about Obama's proposal. The extreme left is already vilifying HIM.

FYP

The Mad Crapper
02-15-2011, 07:30 PM
The Presidents Budget Proposal: An Obamination of Progressive Profligacy

By Arnold Ahlert


http://www.JewishWorldReview.com |

In one of the most daunting "present" votes of his entire political career, president Obama had demonstrated that he is completely unserious about getting both the federal deficit and the federal debt under control. His proposal of $1.1 trillion dollars in deficit reduction over a ten year period makes a complete mockery of reality: the deficit this year alone is $1.67 trillion. Mr. Obama's "solution" would reduce it to $1.56 trillion. To put it in a perspective even progressives can understand, that is akin to bailing out the flooded staterooms of the Titanic — with a thimble — while telling everyone not to worry about the ship sinking.

Does anyone still remember when we measured deficit spending with the word "billions" instead of trillions? Government spending has literally doubled in the last ten years — from $1.9 trillion in 2001 to this proposed "austerity budget" of $3.7 trillion in 2011 — and yet progressives are still talking about "devastating cuts" to one program or another. Republicans? So far, the biggest thing they've come up with is $100 billion in cuts for the current year. You know what that is?

A bigger thimble.

Government is morbidly obese. Not chunky, not fat, morbidly obese. Anyone who tells you otherwise is an utter liar. Anyone who tells you that we can't cut ten percent or more of everything — without missing a beat — is a complete fraud.

We are a pivotal moment in this country, one where we're about to find out if the whiners whose entire lives revolve around sucking the government teat, outnumber those who provide the cow. If that is the case, we're through as a nation. Not floundering, not mucking about, not flailing away.

Through.

The Keystone Keynesians tried it their way. They "stimulated" us into a "recovery" in which progressive "expert" after progressive "expert" remains baffled by the "unexpected results" of chronic unemployment, rising prices and dismal growth. Their steadfast determination to keep doing that which has failed demonstrates nothing more than the bankruptcy of an ideologically incapable of dealing with reality. Their contention that government isn't spending enough on whatever pet project they deem "crucial" is obscene.

I'll tell you right now who the next president will be. He will be the one man with enough courage to take on the Sacred Cows, the Third Rail of Politics or whatever else you want to call the budget-crushing entitlements known as Social Security, Medicare and Medicaid. He'll be the man who can successfully convince Americans that the party is over, and that their unseemly whining about "their" Social Security or "their" medical benefits is nothing less than immoral. You want Soc Sec because "you paid into it your whole working career?" Fine. Take every cent you've contributed, plus the 2% compound interest rate most Americans were willing to settle for in leiu of privatizing the system, and that's it. Not a penny more, because once you cross that threshold, it's not Soc Sec anymore.

It's welfare — period.

And therein lies the crux of the problem. We've raised several million Americans who not only believe you can get blood from a stone, but that they're entitled to that blood. And they have plenty of allies in Congress and the White House more than willing to enable that which is nothing more than selfishness and greed, even as it's called "compassion" and "social justice."

Are those people a majority of the electorate? If they are, get ready for Third World living. Get ready for the crony capitalists at the top to keep currying government favor to protect themselves, just like GE, GM and Goldman Sachs have done. And get ready for the teeming entitlement crowd at the bottom to be told that government coercion, aka socialist/marxist progressivism, is the only way to extract enough money from the system to satisfy their needs. The people in between, the real capitalists and the real working men and women who forge their way through the world without a government fix?

An endangered species heading for extinction.

Any hope of sanity lies in the Republican House. It is a sanity which requires something completely inimical to a politician's instinct, as in putting the good of the nation above one's chances for re-election. If such a risk is daunting, consider the alternative: being forever known as people who promised the nation they would get government spending under control, but chose to punt in an orgy of self-preservation instead. The people who kicked the can down the road, even as they knew for certain they were running out of road.

And Republicans shouldn't kid themselves for a nano-second. The entitlement uber alles crowd and their Democrat/media enablers cannot be won over, any more than a drunk can be talked into going sober. Republicans must proceed based on the premise that the takers are still a minority of Americans. If they are not, the battle is already lost. Those of us who still believe this country can be saved will be watching. Not what you say, but what you do. A hundred billion dollars in savings is chicken feed, and chicken feed is for chickens. Stop patting yourselves on the back and get to work promoting serious cuts.

You'll either be rewarded for your success in 2012 — or it probably won't make the slightest difference who's running the country after that if you fail.



http://www.jewishworldreview.com/0211/ahlert.php3

http://www.moonbattery.com/obama-newsweek-cover-lord-shiva-the-destroyer-unicycle-american-flag-sad-hill-news.jpg

googlegoogle
02-15-2011, 09:39 PM
GREECE

The Mad Crapper
03-05-2011, 08:58 PM
Total discretionary spending soared from $1.2 trillion to $1.4 trillion, an increase of over 16 percent.
Total mandatory spending jumped from $2.1 trillion to $2.2 trillion, an increase of almost 4 percent.
The national debt jumped from $6.6 trillion to $9.5 trillion, a whopping increase of 43 percent.



This is how sick and twisted things have become; what we call "discretionary spending" are the things the founders intended the federal government to spend money on, AND ONLY THOSE THINGS:

National defense, foreign relations, and the judicial system.

tiptap
03-06-2011, 09:41 AM
Well one thing about a budget in writing, the silly its Bush's fault lines are no longer valid when discussing a budget that is all Obama's. So for all intents and purposes, unless you are discussing recent history and want an endless debate with no detail, those conversations are of no value.

But the debt introduced by the Republicans isn't. And please don't throw up the chart of budget debt unless they include the debt from the Wars as well for comparison. I am all for raising the Income Tax in a progressive manner to meet budget along with cuts in War and therefore the need for military build up.

The Mad Crapper
03-06-2011, 10:15 AM
Well there it is, the Left's Mantra: Blame Bush and raise taxes. :o)

But the debt introduced by the Republicans isn't. And please don't throw up the chart of budget debt unless they include the debt from the Wars as well for comparison. I am all for raising the Income Tax in a progressive manner to meet budget along with cuts in War and therefore the need for military build up.