WASHINGTON — President Obama wants Americans to foot the bill for the first $4 trillion budget in U.S. history, which will drive our country ever more deeply into debt.
This isn’t all that’s at stake in the fiscal 2016 budget he sent Congress on Monday. It calls for major new taxes on our fragile economy that will hurt America’s businesses, stunt wage growth and further weaken job creation.
Obama made it crystal clear in his first year in office that raising federal spending was at the core of his presidency. And he’s kept that promise.
In 2009, his first year in office, he called for $3.6 trillion in spending in fiscal year 2010. In 2011 that figure shot up to $3.7 trillion, continuing its ascent to nearly $3.8 trillion in 2014.
His spending trajectory continues to rise, culminating in the highest total ever, spiraling over the $4 trillion mark for the first time in our history.
The budget was about $1 trillion less in the last year of George W. Bush’s presidency. The year before, Bush’s budget deficit was a tame $162 billion, before the recession came, shrinking tax revenues and ballooning the deficit.
Still, Obama has no peer in the record books for piling up high budget deficits over the course of his presidency.
They were $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, $1 trillion in 2012, $676 billion in 2013, and close to half a trillion bucks in fiscal year 2014.
His latest budget would produce a nearly similar deficit, according the White House’s Office of Management and Budget (OMB).
All of this money is sucked out of our economy, which leads to slower economic growth, less capital investment, fewer jobs and lower or stagnant wages.
If you’re looking for major new proposals from Obama on how to eliminate the deficits and dramatically pay down debt, forget it.
The OMB forecasts that over the next 10 years, under the spending curve Obama has put us on, the national debt will balloon by $6 trillion.
To quote Yogi Berra, this is “deja vu all over again.” More infrastructure spending, higher taxes on business and the rich, and lots of new spending initiatives. Just like the $800 billion economic stimulus law that turned out to be a dud and left us in the midst of a long, painfully sluggish, jobless recovery.
This latest budget calls for a whopping $478 billion in public works spending to improve roads, bridges, ports and other projects. It isn’t going anywhere in Congress. Been there, done that. It didn’t work.
As for his proposal to slap a 14 percent tax on overseas profits by U.S. corporations in a brutal global recession in Europe and Asia, House Speaker John Boehner responds “no … dead!”
Ditto for Obama’s attempt to raise the capital gains tax on upper-income Americans to 28 percent, which would kill job-creating investments in new start-up firms seeking to expand. Or imposing higher estate taxes, another one of his soak-the-rich ideas. Dead on arrival.
“What I think the president is trying to do here is to, again, exploit envy economics. This top-down (income) redistribution doesn’t work,” House Ways and Means Committee Chairman Paul Ryan said Sunday on NBC’s “Meet The Press.”
“It may make for good politics, (but) it doesn’t make for good economic growth,” Ryan said.
The Wisconsin Republican similarly dismisses Obama’s idea to hook the capital gains tax to inherited wealth — saying that it would make it “really hard for a family to pass on a family business to the next generation.”
Obama also wants to give well-paid federal workers a 1.3 percent pay raise (after 1 percent raises in the last two years). But that’s something many millions of unemployed or underemployed lower-income private-sector workers will find hard to swallow after going so many years without any wage growth in their paychecks — if they are lucky to have a job.
Ryan’s top goal this year will be to enact tax reform by cleansing the tax code of loopholes and other credits and exemptions, while lowering the rates across the board for businesses and individuals.
He’s working with Orrin Hatch of Utah, his counterpart on the Senate Finance Committee, but both men know they face a huge obstacle: Obama.
Obama says he wants corporate tax reduction, but is opposed to cutting individual tax rates or the capital gains tax. Both would make the tax code simpler and pro-growth and create more jobs.
As of now, I don’t see Obama changing his mind on the kind of economic reforms that we need to get our country growing again.
He is a prisoner of his party’s ideological addiction to the politics of redistribution, public works and big spending. He’s anti-capitalism, anti-wealth formation and anti-free market — institutions that made the American economy the innovative economic giant it has become.
But over the last six years, Obama’s policies have not worked. The big-spending stimulus program enlarged the government, not the job market. Infrastructure projects did not work in the Great Depression, and they didn’t work in the Great Recession.
So instead of thinking anew, he has locked himself into a state of delusion, believing that he pulled the economy out of its lethargy and everything’s OK. But it’s not even remotely OK.
Economic growth fell in the fourth quarter to a dismal 2.6 percent, whereas the Reagan tax-cut economy saw GDP rates soaring to 5.6, 7.7, 8.5 percent growth — and created monthly job numbers in the 400,000 to 500,000 range and higher.
Oh, we’ll muddle through somehow, but it’s not going to get significantly better until a new, pro-capital investment president sits in the Oval Office and sets the economy free to grow and prosper once more.