On February 13, President Obama unveiled his proposed federal budget for fiscal year 2013, which begins October 1, 2012. This $3.8 trillion absurdity includes $1.3 trillion of new deficit spending. It is the fourth year running in which the deficit will exceed $1 trillion. Remember shortly after his inauguration, when Mr. Obama pledged he would cut the budget deficit in half (i.e., to less than $650 billion) by the end of his term? Have his priorities changed? Not really.
Obama and Democrats will never cut spending
The President and his allies in Congress have never been serious about meaningful cuts in federal spending. Like many politicians, their primary concern is re-election. Though absolutely necessary, spending cuts and entitlement program reforms are difficult and therefore jeopardize votes. So President Obama and Democrat leadership are talking the talk while putting off economic solutions until some undetermined time in the future.
It’s the same old game. Washington, D.C. elites take the stage and make campaign-style speeches with platitudes about fiscal responsibility, economic recovery, and jobs for teachers and firefighters. These words are cover for the true objective; job security for incumbent politicians. As far as President Obama is concerned, power is fortified by a welfare state full of indentured voting blocks. Taxpaying Americans end up holding the brown end of the stick.
The U.S. national debt has surpassed $15.4 trillion. That’s over $136,000 per taxpayer. Yet, the Obama budget is comprised of unfunded entitlements, endless deficits with undefined payment terms, and immense tax increases on the entrepreneurial class.
A budget farce instead of fixes
President Obama claims his administration is making “very difficult choices”. He proclaimed, “Every department will feel the impact of these reductions as they cut programs or tighten their belts.” We are told his plan will cut the deficit by $4 trillion over the next decade. Yeah, right!
Did you know that $2 trillion of the President’s claimed deficit reduction measures were already enacted into law under the Budget Control Act of 2011? You can’t count them again in fiscal year 2013. Besides, Mr. Obama is not even responsible for these measures. Tea Party Republicans forced those spending cuts on the President last year as conditions to approve the debt ceiling increase he wanted.
Another $1 trillion of Mr. Obama’s so-called savings comes from winding down the wars in Iraq and Afghanistan. But these funds were never requested or authorized. It’s like a minimum wage worker declaring, “I’m not going to buy a Lamborghini next year, so I’m cutting spending by $400,000.”
Taxing the “rich”
Can President Obama and his cohorts get away with a budget farce instead of fixes? It depends on whether the White House can convince lower and middle class voters that it’s all for them. Thus, the extensions of payroll tax breaks and unemployment insurance. These could provide an economic boost that lasts until Election Day.
More importantly, the budget proposal is a collection of $1.9 trillion in new taxes on “the rich”. One tenet is that the Bush tax cuts should expire at the end of 2012. That would result in a 13 percent increase in income taxes paid by households making more than $250,000. Additionally, capital gains taxes would rise from 15 to 20 percent. Estate taxes (i.e., death taxes) will increase from 35 to 45 percent.
Mr. Obama’s so-called Buffett Rule will ensure that every household earning more than $1 million pays at least 30 percent in federal income taxes alone. Beyond stunting economic growth, the entire tax menagerie won’t generate enough revenue to pay the interest on our current national debt.
Future generations pay for self-serving politicians
President Obama’s budget for fiscal year 2013 demonstrates a lack of interest in fiscal responsibility. Worse, it promotes the false premise that America can regain financial footing without cutting dependency on the welfare state. Growing reliance on government for everything from medical care to mortgage bailouts is pushing our nation to the brink of bankruptcy.
American voters must stop re-electing self-serving politicians, starting with President Obama, who simply voice support for budgetary prudence and reform while racking up debt with abandon. Government has run out of “other people’s money”. That means the Obama budget is another big bill to be paid by our future generations.