Going over the cliff allows Congress to technically say that it isn’t raising taxes, but is cutting them instead. CBO’s score backs them up on this by scoring the Senate bill as a $3.6 trillion tax cut. No one should fall for this. The Senate bill is a tax hike because it allows taxes to go up from 2012 to 2013. The tax increases in the bill will reportedly raise about $600 billion over the next 10 years.
Also of note in the CBO score is that the Senate bill increases spending by around $330 billion by extending expanded unemployment benefits, a temporary “doc fix” patch to prevent cuts to Medicare, and extension of the agriculture programs.
There was some good in the Senate bill — the harmful defense sequester cuts were postponed and most tax hikes were avoided. But there was bad — tax hikes that will hurt the economy and do little to tame the deficit, especially factoring in the spending in the bill.
The budget deal passed by the U.S. Senate today would raise taxes on 77.1 percent of U.S. households, mostly because of the expiration of a payroll tax cut, according to preliminary estimates from the nonpartisan Tax Policy Center in Washington.
More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes. Among the households facing higher taxes, the average increase would be $1,635, the policy center said. A 2 percent payroll tax cut, enacted during the economic slowdown, is being allowed to expire as of yesterday.
According to the CBO, the deal would raise taxes by $41 for every $1 cut from the budget. Have we really dodged a fiscal cliff?
The President, while not presenting concrete proposals, has been quite clear on what he wants: to raise taxes on the top two percent, keep the Bush tax cuts for everyone else, offer only vague promises of future spending cuts, and gain the unprecedented authority to raise the debt limit without Congressional approval. He does not plan to reform the entitlements so dear to his heart and his base’s. Instead of less spending, he would like to spend more on “stimulus” and “investments.” Obama knows that physicians will desert Medicare if he cuts their compensation by the scheduled 26.5 percent. That is simply not going to happen.
Here are Obama’s desired alternative fiscal policies to avoid the fiscal cliff in order of their effect on the five-year budget as estimated by the CBO:
1. Preserve Bush tax cuts and other tax provisions for everyone except the top 2 percent: Raises the five-year deficit by $2.0 trillion.
2. Drop the fiscal-cliff sequestration of spending and expand discretionary spending by the rate of inflation: Raises the five-year deficit by another trillion dollars.
3. Raise the tax rate on the top 2 percent: Lowers the five-year deficit by $300 billion.
4. Extend enhanced unemployment benefits: Raises the five-year deficit by $200 billion.
5. Do not cut Medicare payment rates to physicians: Raises the five-year deficit by some $100.
Four of the five fiscal policies on Obama’s wish list raise the deficit. Only one – the vaunted tax on the rich on which he based his campaign – lowers the deficit, but only by a miniscule $300 billion ($60 billion per year). If Obama gets the tax and spending changes he wants, his 2017 successor will inherit a national debt in excess of $20 trillion.
A warning: The 2013-2017 budget deficits could be much higher. No one knows what the costs of Obama Care will be. By 2017, the federal government will be spending more on health care than on social security. The CBO projection assumes that the costs of Obama Care come in on target. If Obama Care cannot contain health care costs, we could easily see a five-year deficit well in excess of $5 trillion, for an annual deficit of more than a trillion dollars. The CBO also uses a historically low rate of increase of discretionary non-defense spending equal to the rate of inflation. If we return to “business as usual” in Washington, the discretionary spending figure could also be blasted out of the water.
Obama based his re-election campaign on “the rich should pay their fair share” and “I killed Osama.” Well before the election, it was clear from the government’s own figures that taxing the top two percent would make only a tiny contribution to solving our deficit problems.
Why was this not pointed out by the media, who played along with the “tax the rich” fairy tale? Why was this not the central theme of the Republican campaign?
I think that point I highlighted in bold deserves emphasis. Obama ran up over $6 trillion in new debt – pushing us to a $16.5 trillion dollar debt. His “balanced approach” will generate a measly $60 billion a year in “new revenues”, assuming that “the rich” don’t just curtail their productive activities and shift their operations elsewhere (Canada). If you generate $60 billion in revenues, there is NO WAY that this is going to pay for a trillion dollars a year in new debt. So we are on track to hit over $20 trillion in national debt in Obama’s second term, taking us into Greece-like territory.
And that is according to the official CBO numbers.
On Fox News Sunday, Speaker John Boehner said Republicans have offered a balanced approach to averting the fiscal cliff but the president is “not being serious about coming to an agreement.” Boehner says the White House is holding tax increases over the heads of the middle class while demanding more spending and tax rate hikes that will hurt small businesses.
Here are some of the highlights:
Boehner: President Obama’ s Fiscal Cliff Offer is “Nonsense,” a “Non-Serious Proposal”:
“A non-serious proposal. The president was asking for $1.6 trillion worth of, uh, new revenue over 10 years, twice as much as he’s been asking for in public. He has stimulus spending in here that exceeded the amount of new cuts that he was willing to consider. It was not a serious offer. … I looked at [Secretary Geithner] and I said, ‘you can’t be serious?’ … You know, we’ve got several weeks between Election Day and the end of the year. And, uh — and three of those way — weeks have been wasted, uh, with the — with this nonsense.”
Boehner: President Obama Asked for More New Spending Than Spending Cuts:
“We’ve put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They have actually asked for more revenue than they’ve been — been asking for the whole entire time. … And all of this new stimulus spending would literally be more than the spending cuts that he was willing to put on the table. … Look at the fact that they put $400 billion worth of unspecified cuts up that they’d be willing to talk about, but yet, at the same time, that’s over $400 billion over 10 years. Uh, while he wants over $400 billion in new stimulus spending. And this is — this is — it’s a non-serious proposal.”
Boehner: What Will President Obama Do With $1.6 Trillion? Spend It!
“I mean think about the — the proposal we got from the president. If we gave the president $1.6 trillion of new money, what do you think he’d do with it? He’s going to spend it. It’s what Washington does. … They’ll spend it.”
Boehner: Raising Tax Rates Will Hurt Small Businesses and Destroy Jobs:
“Now, listen, I believe that raising tax rates hurts our economy, hurts the prospects for more jobs in our country. And I realize that the president may disagree. But the fact is, is that if there’s another way to get revenue, uh, from upper income Americans, that doesn’t hurt our economy, then why wouldn’t we consider it?”
Boehner: Spending Cuts & Reforms Must Exceed Any Increase in the Debt Limit:
“Forever. Silliness. Congress is never going to give up this power. I’ve made it clear to the president that every time we get to the debt limit, we need cuts and reforms that are greater than the increase in the debt limit. It’s the only way to leverage the political process to produce more change than what it would if left alone.
Boehner: Going Over the Fiscal Cliff Will Hurt Our Economy, Is Not Fair to the American People:
“[T]his isn’t an issue about Democrats and Republicans. My goodness, this is about our country. And we get — ought to get serious about dealing with the problems at the end of the year. And we need to get serious about our deficit and our debt, uh, that are burying our children’s future. … [G]oing over the cliff will hurt our economy, will hurt job creation in our country. It’s not fair to the American people. … This agreement should come sooner rather than later, because just the threat of the fiscal cliff is already hurting our economy.”
That’s where the Republicans stand. They did offer to tax the rich by capping tax deductions, so that the very wealthy would pay more in taxes. But Obama turned down that offer. That was a solid offer, and Obama turned it down.
Right now, I am just sick of the American people who re-elected this spendthrift. I want the Republicans to let all the tax cuts expire. It will be good for the American people as a whole to see the importance of not re-electing an ignorant fool. Maybe we have to hit the bottom of how much we can borrow before the people who voted for “Obamaphones” will feel the effects of their economic ignorance.
House Speaker John Boehner (R-OH) today released a list of 132 American economists who believe the job creation strategy used in the House GOP Plan for America’s Job Creators will do more to boost private-sector job growth in America in both the near-term and long-term than the “stimulus” spending approach favored by President Obama.
“This list underscores the need for immediate action on the now-22 bipartisan jobs bills passed by the Republican-led House that are awaiting a vote in the Democratic-controlled Senate,” Boehner said. “All 22 of these bills passed the House with bipartisan support, but to date have not been brought to a vote by Senate Democrats. To help support job creation in both the short-term and long-term, we need bipartisan action to halt unnecessary government regulations and fix the tax code to help private-sector job creators. Our plan does that. The Senate needs to pass these 22 bills and send them to the president’s desk.”
Last month, Boehner asked a group of economists across the nation: which do you believe is more likely to provide a boost for private-sector job growth in America in both the near- and long-term: a plan focused on billions of dollars in additional “stimulus” spending by government – or a plan focused on halting excessive government regulations and fixing the tax code to help private-sector job creators? A total of 132 economists indicated they clearly favor the latter strategy. The list of 132 economists includes experts from Stanford University’s Hoover Institution, Carnegie Mellon University, and Harvard University; economists from the American Enterprise Institute (AEI), the Manhattan Institute, and the American Action Forum; and many others.
On Friday, in response to the U.S. Department of Labor’s announcement that October 2011 marked the 33rd consecutive month in which the national unemployment rate exceeded eight percent, Boehner asked President Obama to prod the Democratic-controlled Senate for action on the stalled jobs bills. Boehner and other Republicans have called for President Obama to be more engaged in the legislative process this fall and less focused on his re-election campaign.
“I urge the president to call on Senate Democrats to bring these common-sense jobs bills to a vote,” Boehner said. “As long as these bipartisan jobs bills are stalled in the Senate, it is unacceptable for the White House to be anything less than 100 percent engaged in the legislative process.”
Here’s the plan:
Empower Small Business Owners and Reduce Regulatory Burdens:
Require congressional review and approval of any government regulations that have a significant impact on the economy or burden small businesses.
Audit existing and pending regulations to identify and address those that hinder economic growth.
Fix the Tax Code to Help Job Creators:
Increase American competitiveness to spur investment and create more American jobs by streamlining the tax code and lowering the tax rate for businesses and individuals including small business owners to no more than 25%.
Reform the tax code to allow American businesses to bring back their overseas profits without having to pay a tax penalty so they can invest in our economy and create American jobs.
Increase Competitiveness for American Manufacturers:
Pass the three pending free trade agreements with Colombia, Panama, and South Korea to create up to 250,000 jobs.
Continue to open new markets to American made products. Encourage Entrepreneurship and Growth:
Modernize our patent system to protect our nation’s innovators, discourage frivolous lawsuits, and expedite patent reviews.
Re-Authorize and improve federal programs and approval processes to streamline development of new products.
Remove barriers to building a first class workforce so that the United States can compete in the global marketplace and lead the way in technological development and growth.
Maximize Domestic Energy Production to Ensure an Energy Policy for the 21st Century:
Promote lower energy prices through increased domestic production.
Encourage all forms of energy production.
Pay Down America’s Unsustainable Debt Burden and Start Living Within our Means:
Build upon the House Republicans’ Budget by enacting significant spending cuts.
And they already passed about 20 bills through the House with bipartisan support.
Have you heard about “The Forgotten 15“? Here’s a news article by the Washington Times that explains it.
Excerpt:
Last week, the House passed a strongly bipartisan bill which would prevent a job-killing 3 percent withholding tax on all government contractors from going into effect. Even though the White House supports the measure, Mr. Reid, a Nevada Democrat, has chosen instead to bring another “small bite” from the president’s failed American Jobs Act to the floor. He wants to hike taxes on business owners so he can blow $60 billion in more stimulus for bike paths, choo-choo trains and bus stops.
Mr. Reid can’t even round up all the Democrats behind his partisan plan, but he continues to drag his feet on items that could pass because the last thing he wants to do is adopt legislation that gives the GOP the chance to take some credit with the public.
The Senate has not been this inactive in at least a quarter-century. As of Tuesday, the Senate had held 194 votes for the year, 54 fewer than at this time last year.
The intransigence has real-world implications. In March, the House passed a strongly bipartisan bill which would have stopped a court order from imposing duplicate and expensive regulations on farmers and ranchers. The Senate never brought the bill up for a vote, and on Monday a key deadline passed, allowing new regulations on pesticide applications to go into effect. That’s bad for jobs.
House Republican leaders want the public to know that they aren’t to blame for the stalemate on Capitol Hill. Speaker John A. Boehner produced a card listing the “forgotten 15” jobs bills that have passed the House but not the Senate. The Ohio Republican gave the card to members, telling them to carry it with them, hold it up at events at home, and flash it during interviews to remind Americans that Republicans are doing everything they can to address the employment situation.
The Democratic strategy is to set up Republicans as a foil for their 2012 re-election bids. Even though the congressional approval rating is down in the single-digits, Mr. Reid wants to draw a distinction between his party and the GOP by only bringing up bills that Republicans will oppose so his caucus can send out accusatory press releases.
The messaging is carefully crafted to fit with Mr. Obama’s latest campaign trail slogans about how “we can’t wait” for Congress to act. He showed his true motives on Tuesday when the president invited congressional Democrats to the White House to ostensibly talk about the jobs agenda. He has no plans to invite Republicans over to chat.
Projected vs Actual Unemployment With Stimulus 2011
Back in 2007, when the Republicans controlled the House and Senate, the unemployment rate was near 4%. FOUR PERCENT. And we had a deficit of $160 billion – NOT 1.6 TRILLION.
Campaigning for another failed stimulus and more job destroying taxes, President Obama has repeatedly—and falsely—asserted that “Congress isn’t willing to move” legislation to facilitate job growth. While the president plays politics, House Republicans have been working and approving legislation to promote economic growth and job creation. The House has approved more than 15 bills that, if enacted, would immediately help to grow the economy without more failed stimulus spending. These bills are currently stalled in the Democrat-controlled Senate and the president has not encouraged the Senate to act.
Here is a sample:
4) H.R. 1230—Restarting American Offshore Leasing Now Act: H.R. 1230 would require the Department of the Interior (DOI) to auction offshore oil and gas leases in the Central and Western Gulf of Mexico, as well as in an area off the coast of Virginia. The bill would help to reduce energy prices and promote job creation by expediting offshore oil and natural gas exploration in the Gulf of Mexico and the Virginia coast.
6) H.R. 1231—Reversing President Obama’s Offshore Moratorium Act: H.R. 1231 would require that each five-year offshore oil and gas leasing program offer leasing in the areas with the most prospective oil and gas resources, and would establish a domestic oil and natural gas production goal. The bill would essentially lift the President’s ban on new offshore drilling by requiring the Administration to move forward on American energy production in areas estimated to contain the most oil and natural gas resources.
7) H.R. 2021—The Jobs and Energy Permitting Act of 2011: H.R. 2021 would eliminate needless permitting delays that have stalled important energy production opportunities off the coast of Alaska. The bill would also eliminate the permitting back-and-forth that occurs between the EPA and its Environmental Appeals Board. Rather than having exploration air permits repeatedly approved and rescinded by the agency and its review board, the EPA will be required to take final action – granting or denying a permit—within six months.
10) H.R. 1938— North American-Made Energy Security Act: H.R. 1938 would direct the President, acting through the Secretary of Energy, to coordinate with all federal agencies responsible for an aspect of the President’s National Interest Determination and Presidential Permit decision regarding construction and operation of Keystone XL, to ensure that all necessary actions are taken on an expedited schedule. The bill would promote job creation and energy security by ending the needless delay of the construction and operation of the Keystone XL pipeline.
16) H.R. 2433—Veterans Opportunity to Work Act: H.R. 2433 would create or modify programs that provide employment and training services to veterans and service members separating from active duty. The bill would also make changes to programs that offer home loan guarantees, ambulance services, and pension payments to qualifying individuals. Among other things, the bill would provide up to 12 months of Veterans Retraining Assistance to no more than 100,000 unemployed veterans that enter education or training programs at community colleges or technical schools to prepare them for employment in an occupational field that is determined by Department of Labor to have significant employment opportunities.
17) H.R. 674—To amend the Internal Revenue Code of 1986 to repeal the imposition of 3 percent withholding on certain payments made to vendors by government entities: H.R. 674 would permanently repeal the imposition of 3 percent withholding on certain payments made to vendors by government entities. Currently, the imposition of the 3 percent withholding is set to take effect on January 1, 2013. If the 3 percent withholding tax were implemented as scheduled, government entities would be required to withhold 3 percent of payments to persons providing property or services to the government. For example, on an invoice for $20,000 the government would pay the business $19,400 and withhold $600 as a preemptive tax. These added costs would almost certainly translate into fewer private-sector jobs and higher costs for the government and taxpayers.
They are actually up to 17 jobs bills now.
And finally, I have to post this funny John Boehner clip:
We need more of that Mr. Boehner. I think that was a good opportunity to say “freaking” as well. Because he should be pissed off with this Solyndra-bailout President.
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