President Obama’s recently released fiscal year 2013 budget is full of gimmicks, half-truths, over-optimistic assumptions and questionable policies. Here is the grim list of the budget travesties:
1. Tax hike mania
President Obama is seeking nearly $2 trillion in new taxes, including doubling the top capital gains and dividend rates, and sharply increasing the estate tax. The White House wants to hit the airline industry with a “takeoff fee,” the banking industry with a “financial crisis responsibility fee,” and the oil industry with billions of dollars in new hikes. The budget foresees the end of both the temporary payroll- tax cut and the Bush tax cuts—giving a double blow to the economy at the start of 2013.
The president continues his out-of-control spending agenda — $47 trillion over 10 years — funding frivolous projects, Utopian dreams, and wealth redistribution policies. He wants billions of dollars in new funding for renewable energy programs, unemployment assistance, jobless training, and infrastructure rebuilding. Obama continues his love affair with high-speed rail, asking for billions in new funding. He even wants U.S. taxpayers to pony up $800 million to aid the “Arab Spring.”
3. War savings
Somehow the president is counting as budget cuts the almost $1 trillion that he is “saving” in money that won’t be spent in Iraq and Afghanistan. By the same logic, think how much can be “saved” by counting as future budget cuts the money we won’t be spending for wars in Germany, Japan, Korea, and Vietnam.
4. Over-optimistic forecasting
One way to make a budget look good is to make rosy economic assumptions, as a growing economy brings in revenue and curtails many expenses, such as unemployment benefits and food stamps. While most economists are predicting a 2 percent growth rate at best for the U.S. economy next year, the White House is boldly predicting a 3 percent gain in 2013 and 4.1 percent by 2015. As the Obama tax hikes kick in, watch for any recovery to whither.
5. Deficit inaction
Not content with the trillions of dollars of debt he has already racked up, the president’s budget forecasts another $6.7 trillion in deficit spending over the next decade. With no real deficit reduction plan on the table, it won’t be long before interest payments on the national debt crowd out much of the funding needed for discretionary spending programs.
6. Entitlement ennui
President Obama doesn’t even pretend to deal with the burgeoning entitlement crisis in his budget other than to take a whack at senior’s health benefits. The president offered no plan to keep Social Security solvent, even as the two-year payroll tax cut propels the system closer to bankruptcy. His Medicare savings don’t come from reforms containing health costs, but by giving power to Washington bureaucrats to deny coverage to senior citizens.
7. Class warfare
President Obama brings his class warfare tirade from the campaign trail to the budget plan as the “wealthy”—generally defined by families with an income of over $250,000—will be hit with multiple tax increases. The end of the Bush cuts will raise the top marginal tax rate to 39.6%, the tax on investment income will rise sharply, there will be a 3.8% surtax imposed by ObamaCare, and a “Buffet rule” requiring a higher minimum tax. Obama even goes after charitable giving and homeowners, limiting the value of itemized deductions for the “wealthy” in those categories.
8. Political document
Rather than offering a serious spending plan, the president’s budget is a political roadmap for his 2012 re-election campaign, reinforcing his “tax-the-rich” rhetoric. The phony numbers are so obvious that Senate Democrats aren’t even going to bother to take up the measure, extending their streak to four years without producing a budget.
9. Budget ignorance
It is clearly amateur hour at the White House. When Obama’s chief of staff, Jack Lew, went on the Sunday talk shows to defend the president’s budget, he predictably attacked Republicans for the inability to get a spending plan through the Senate, decrying the 60 vote threshold needed to get something passed in the upper chamber. How is it that the president’s key aide doesn’t know that Senate rules forbid a filibuster on a budget, meaning that passage requires a simple majority of 51 votes?
10. Bogus savings
The president claims he is cutting $4 trillion in spending over 10 years, but as the House Budget Committee points out, $2 trillion of that comes from measures already enacted into law. Double counting is a tried and true method of accounting sleight of hand. Only in Obamaland, does increasing spending by $7.3 trillion, instead of $9.48 billion, constitute fiscal restraint.