Obama's Budget

[jgaffney]

It seems that President Obama is doing everything he can to make it the Republicans' fault if things go sideways on a budget deal. The Wall Street Journal explains it all:

Barack Obama was in full-scold mode Friday night, summoning Congressional leaders to the White House to "explain to me how it is that we are going to avoid default." It's a terrific question, albeit one the President refuses to answer. He remains far more interested in maneuvering to blame a default or credit downgrade on Republicans than in making himself part of any plausible solution to a crisis he insists is imminent.

Senate Minority Leader Mitch McConnell, who figured out earlier than most that the President wasn't serious, long ago turned to crafting a deal within Congress. He's now been joined by John Boehner, who was prepared to take political risks to reach for the "big deal" only to tire of White House antics. Now House Republicans and Senate Democrats are each working to craft their own plans, and it says something that the country has a better shot of getting something out of a divided Congress than it does out of the Oval Office.

Then again, it has long been clear that Mr. Obama isn't interested in spending reform. In February he proposed a budget that spent more than any in U.S. history. In April he demanded that Congress pass a "clean" debt ceiling hike that included no spending cuts whatsoever. Only after House Republicans unveiled their own sweeping budgetary reforms did the White House rush to also claim it wanted deficit reduction as part of the debt-ceiling debate.

In June, the President dispatched Joe Biden to negotiate spending cuts, only to have the White House insist at the last minute that modest trims be accompanied by significant new taxes. Mr. Boehner and the Senate's bipartisan Gang of Six produced plans that would have acceded to that White House demand in exchange for substantive tax reform that would have lowered individual and corporate rates. Yet last week the White House backtracked on its agreement for the lower tax rates and demanded another $400 billion in tax revenues above the $800 billion the Speaker had already conceded.

The President insists his party is offering serious spending cuts and entitlement reform. He also likes to talk about "balance," which to him means real tax increases immediately and speculative spending cuts some time in the distant future. Behind the scenes the White House has only ever agreed to token reform and cuts. Here's a number for the debt history books: Mr. Obama's final offer in the Biden talks was a $2 billion cut in 2012 nondefense discretionary spending. The federal government spends more than $10 billion a day.

Now we're days from the August 2 default deadline set by the Treasury Department, and the President's only response has been to blame everybody else for deficient seriousness.

Lest we forget, the Pelosi/Reid Congress completely ignored it's constitutional duty to pass a budget, leading to the series of continuing resolutions since November 2010. According to Sen. Jeff Sessions (R-AL), it has now been more than 800 days since Harry Reid has allowed a budget bill to come to the floor of the Senate. According to Rep. Nancy Pelosi (D-SF), entitlement cuts are off the table, in spite of the fact that the three main entitlements - Social Security, Medicare and Medicaid - are the main drivers in the country's budget deficits. Oh, and let us not forget that Obama's Healthcare Bill proposed to cut $500 billion from Medicare and transfer most of that over to Medicaid. According to Pelosi, "You have to pass the bill in order to find out what's in it."

[jgaffney]

I watched the president's Address this evening. After choking on my beer when he spent the first five minutes blaming everything on Bush (when will he finally use that up?), he got down to the nitty gritty of running for re-election. Commentary Magazine explains it all:

President Obama’s speech tonight on the debt ceiling debate was not an attempt to bridge the gap between his position and that of his congressional opponents. By repeating the rhetoric he has been using all through this debate by attempting to demonize Republicans, it was clear his goal was not to make a deal but to exacerbate a situation he has already described as a crisis.

Rather than continue to negotiate and accept–as Senate Democrats already have–that there will be no debt deal that includes higher taxes, Obama has doubled down on his position. That he has done so even though he is now the only one left in Washington who says a deal must include tax increases speaks volumes about his own intransigence. If he really wanted a solution, he wouldn’t have spent the weekend trying to torpedo talks between the two parties in Congress in order to assert his power. Nor would he have gone on TV tonight to play the class warfare card again ( and again, and Again, and AGAIN) in order to intimidate Republicans into giving in on their core issue.

In response, House Speaker John Boehner’s short speech simply indicated the Republicans understand Obama is either bluffing or actually wants a default because he believes it is in his political interest. The problem for Obama is that although he has thought all along he can repeat Bill Clinton’s 1995 triumph over Newt Gingrich on a government shutdown, this time it is more than likely in order to prevent a deal that is not “balanced,” he will have to veto it. If so, it will be Boehner who will have outmaneuvered the president, not the other way around. Though Obama believes the American people like his ideas better than those of the Republicans, it is hard to believe he is really willing to risk the disaster of a default in order to exploit those positive polling numbers.

It seems to me that the Republicans have formulated and published not one, not two, but three different budget proposals this year alone. Yet, the President continues to get away with talking about a "balanced approach" without putting anything on paper. Obama knows that the moment he publishes a budget with his "balanced approach," the progressives will go ballistic on him.

Class, who can tell me what happened the last time that the President published a budget? That's right! It failed 97-0 in the Senate! Even the Democrats hated it. So, where's Obama's budget leadership now?

The last straw was when Obama tried to compare himself with Reagan. I don't think anyone outside of the NY Times and MSNBC believes that line of poop.

[subdjoe]

Jul 25, 2011 22:14:42 GMT -5 jgaffney said:

I watched the president's Address this evening. After choking on my beer when he spent the first five minutes blaming everything on Bush (when will he finally use that up?),

That would be "What is the day of the general election in 2012?" Alec.

Just watch, whoever the GOP runs, Barry Steve will still run against Bush, just as he did in 2008. And I bet most of the Dems will also run against Bush, as they did in 08.

[jgaffney]

The WSJ explains it all:

The Obama Presidency has been unprecedented in many ways, and last night we saw another startling illustration: A President using a national TV address from the White House to call out his political opposition as unreasonable and radical and blame them as the sole reason for the "stalemate" over spending and the national debt.

We've watched dozens of these speeches over the years, and this was more like a DNC fund-raiser than an Oval Office address. Though President Obama referred to the need to compromise, his idea of compromise was to call on the public to overwhelm Republicans with demands to raise taxes. He demeaned the GOP for protecting, in his poll-tested language, "millionaires and billionaires," for favoring "corporate jet owners and oil companies" over seniors on Medicare, and "hedge fund managers" over "their secretaries." While he invoked Ronald Reagan, the Gipper would never have used such rhetoric about his opposition on an issue of national moment.

So, would it be fair to say that, even three years into his presidency, Obama knows how to run but he still doesn't know how to lead?

BTW, where are Mink, Heckle, et al, on this issue? Under the bed?

[jgaffney]

Roger L. Simon characterizes President Obama as "The Man Without A Plan":

President Obama’s been taking a lot of flak lately for not having a plan. First it was about Libya, but now — even more importantly because, as we know, all politics is local (until it’s not) — about the budget.

The latest White House porte-parole Jay Carney has consequently been taking all kinds of in-coming himself about “where’s the President’s budget plan,” “why doesn’t he have a plan,” etc.

Well, the reason for the latter is simple: because he can’t. The minute the president evinces a budget plan, the game is up. No liberal budget will stand up to scrutiny. There is no money left for deficit spending in our aging society. The welfare state is kaput. It’s gone — probably for generations to come.

Of course, there’s always that canard about taxing the rich. That will save things. But the truth is even if you tax the rich at 100%, it barely sets back our entitlement crisis a year or two, while virtually bankrupting the few job creators who remain.

So no wonder Obama doesn’t have a plan. What would it be?

It would be massive tax increases, because everyone who bothers to look knows that increasing taxes on "millionaires and billionaires", or whatever focus-group-tested phrase the Democrats come up with, will not be enough to avoid spiraling debts. Unless we can live with a national debt that is far greater than our GDP, the tax increases will have to work their way down the chart to the "middle class." Hello, reality.

[jgaffney]

This chart, from the WSJ pretty much says it all.



The accompanying article states:

Then came Mr. Obama, arguably the most spendthrift president in history. He inherited a recession and responded by blowing up the U.S. balance sheet. Spending as a share of GDP in the last three years is higher than at any time since 1946. In three years the debt has increased by more than $4 trillion thanks to stimulus, cash for clunkers, mortgage modification programs, 99 weeks of jobless benefits, record expansions in Medicaid, and more.

The forecast is for $8 trillion to $10 trillion more in red ink through 2021. Mr. Obama hinted in a press conference earlier this month that if it weren't for Republicans, he'd want another stimulus. Scary thought: None of this includes the ObamaCare entitlement that will place 30 million more Americans on government health rolls.

This is the road to fiscal perdition. The looming debt downgrade only confirms what everyone knows: Congress has made so many promises to so many Americans that there is no conceivable way those promises can be kept. Tax rates might have to rise to 60%, 70%, even 80% to raise the revenues to finance these promises, but that would be economically ruinous.

Yet Mr. Obama and most Democrats still oppose any serious reform of Medicare, Medicaid and Social Security. This insistence on no reform reinforces the notion that our entitlement state is too big to afford but also too big to change politically. This is how a AAA country becomes AA, the first step on the march to Greece.

As the man said in "Jurassic Park," "Hold on to your butts!"

[jgaffney]

And, now, the kabuki theater of our debt has finished the second act. The House has passed their version of a bill, which the Democrat-led Senate immediately killed. John Hinderaker explains it all:

President Obama and Harry Reid keep saying they want to make a “deal.” But that isn’t how it works. The Senate needs to pass a bill. Next, leaders of each chamber appoint representatives who participate in a conference committee. The conference committee comes up with a compromise between the House bill and the Senate bill, and that conference bill goes back to each chamber for approval. It will be appropriate for Harry Reid to negotiate with Mitch McConnell over a Senate bill, but Boehner should go on vacation unless and until the Senate acts.

What the Democrats are trying to do, of course, is gain absolution for all of their fiscal sins by negotiating a cosmic deal with the GOP that, as I once put it, would put Republicans in the position of going over the waterfall holding hands with the Democrats. If Republicans are dumb enough to let that happen–which I doubt–then it will indeed be time for a third party.

The Democratic Senate has now gone for more than two years without adopting a budget. That is not only poor practice, it violates federal law. Why won’t the Democrats adopt a budget? Because they don’t dare put down on paper, for the American people to see, what they really want: skyrocketing spending, higher taxes and spiraling deficits. Forever. The Democrats don’t want to commit to anything until they have bullied the Republicans into signing onto it.

Please, Mr. Reid, show us what you feel is an appropriate debt reduction bill. Please, give us something to comment on, instead of continually branding the Republicans as too rigid because they will no compromise. Compromise with what, Mr. Reid? Show us the bill!

Mr. Hinderaker goes on to say:

One of the little-known features of Harry Reid’s “compromise” proposal–no detailed version of which exists–is that it would “deem” budgets to have been enacted for fiscal years 2012 and 2013. In that event, our government would go a full four years without a lawful, statutory budget being in place. Today, the Republican members of the Senate Budget Committee sent a letter to Reid protesting this procedure. You can read the letter here. It says, in part:

This is an abrogation of the responsibilities of the Senate Committee on the Budget and the U.S. Senate. We were not elected to this body and chosen to serve on the Committee on the Budget to see most of the budget levels automatically set based on spending growth projections made by staff. It is this kind of process that has placed the country in a fiscal crisis.

While we have other objections to your proposal, we specifically ask that you remove this provision from your amendment and allow the Committee to fulfill its duties and responsibilities, as set out in law, by allowing the markup of a fiscal year 2012 budget resolution in Committee and, once adopted, its immediate consideration in the Senate.

You could say that the Democratic Party is fiscally irresponsible, but that would be an insult to irresponsible people everywhere.

Let's see if that little detail makes it into the PeeDee's coverage of events tomorrow.

[jgaffney]

I have emailed Sen. Jeff Sessions' office about the "deem" clause. I asked the Senator, who is the ranking Republican on the Senate Budget Committee and one of the signatories to the letter above, if the "deem" clause was in the final bill that was sent to the President for signature. More later...

[jgaffney]

Meanwhile, the WSJ explains what a triumph today's Senate vote was for Speaker John Boehner:

Even from this sunny perspective, it's hard to look at the debt-ceiling compromise and see it as anything but a conservative victory. It's not just that Speaker of the House John Boehner succeeded in imposing some conditions in exchange for an increase in the debt ceiling. It's that the deal has Democrats, including the president, essentially signing on to the Republican framework for defining the Beltway's budget problem: spending that is too high rather than taxes that are too low.

For the moment, the press focus remains on the intra-conservative spat between Republicans who favor Mr. Boehner's deal and tea partiers who largely oppose it. These disagreements will fade, however. And come the 2012 elections this deal will help force the debate that all conservatives have wanted all along—about the size, scope, and proper mission of our federal government.

That's a striking achievement, especially if you remember how this year started. We began the debt-ceiling debate on Democratic terms, with President Obama and Treasury Secretary Timothy Geithner insisting on a "clean bill" that had no conditions attached. Then came threats about grandma not getting her Social Security check if Republicans didn't do as the president demanded, and folks likening Republicans and tea partiers to terrorists.

Last night on O'Reilly, Bernie Goldberg pointed out that the very same liberal pundits who could not name the shooter at the Army base as a "terrorist" now want to use that label against Republicans who want to balance the budget. One of the readers to Goldber's website added:

Remember how much negative press Sarah Palin got for simply posting ‘targets’ on a congressional district map? But somehow, left-wing pundits can actually compare people to terrorists merely because they want our country’s budget balanced. Something tells me that if some nut ever opens fire on people at a tea-party rally, none of these pundits and politicians will be taken to task for fueling hate against the tea-party.

[jgaffney]

Rep. Paul Ryan, in today's WSJ explains why the President has not put forth his spending plan:

Nevertheless, the president still hasn't shown us his cards. He still hasn't put forward a credible plan to tackle the threat of ever-rising spending and debt, and his evasiveness is emblematic of the party he leads.

Ever since they abused the budget process to jam their health-care takeover through Congress last year, the Democrats have simply done away with serious budgeting altogether. The simplest explanation—and the president's real bluff—is that they don't want to commit publicly to the kind of tax increases and health-care rationing that would be required to sustain their archaic vision of government.

The president's February budget deliberately dodged the tough choices necessary to confront the threat of runaway federal spending. It was rejected unanimously in a Senate controlled by his own party.

Since then he has offered a lot of rhetoric but no real plan to avoid a spending-driven debt crisis. His speeches and press conferences are no substitutes for actual budgets with specific numbers and independently verified projections of future deficits and debt. Meanwhile, it has been over two years since the Democrat-controlled Senate passed any budget at all. This is a historic failure to fulfill one of the most basic responsibilities of governing.

So, President Obama gets a lot of press for forming a Fiscal Responsibility Commission - hell, they even have their own web page! - then completely ignores their recommendations. The President submits a budget in February that is so far out of whack that even a Democrat-controlled Senate votes it down flat. But, now, he's a champion budget cutter? Puh-leese!

BTW, a Republican Senator was being interviewed by Greta last night and made a reference to the 2010 debt ceiling increase being "airdropped into the Healthcare Bill at the last minute." I'm trying to find a reference to that.

[jgaffney]

Here's a taste of the headwind that the President is facing. This is from Reuters:

U.S. incomes plummeted again in 2009, with total income down 15.2 percent in real terms since 2007, new tax data showed on Wednesday.

The data showed an alarming drop in the number of taxpayers reporting any earnings from a job -- down by nearly 4.2 million from 2007 -- meaning every 33rd household that had work in 2007 had no work in 2009.

Average income in 2009 fell to $54,283, down $3,516, or 6.1 percent in real terms compared with 2008, the first Internal Revenue Service analysis of 2009 tax returns showed. Compared with 2007, average income was down $8,588 or 13.7 percent.

Average income in 2009 was at its lowest level since 1997 when it was $54,265 in 2009 dollars, just $18 less than in 2009. The data come from annual Statistics of Income tables that were updated Wednesday.

The average tax rate was 11.4 percent, up from 10.5 percent in 2007, the Internal Revenue Service data showed.

Then, of course, to remind us all of the inequaity of incomes in the US, Reuters continues with:

No income tax was paid by 1,470 of the 235,413 taxpayers earning $1 million or more in 2009, compared with the 959 taxpayers with million-dollar-plus incomes who paid no income taxes in 2007.

I wonder if that list of 1,470 millionaires who didn't pay any taxes includes Jeff Immelt, or George Soros, or Bill Clinton, or Matt Damon... I guess we'll never know.