Tag Archives: Barack Obama

The Buck Doesn’t Stop Here

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From the Wall Street Journal:

The Buck Doesn’t Stop Here
President Obama is applying ‘a scalpel to the discretionary budget, rather than a machete.’

By STEPHEN MOORE

We hear that the White House was caught off guard by the near-universal panning of President Obama’s budget proposal. So yesterday morning Mr. Obama was rushed in front of the TV cameras for a press conference to rebut the wave of negative reaction to his status quo spending plan released on Monday.

The press was unusually harsh in its questioning, and Mr. Obama was clearly on the defensive. At one point he even said that the media is too “impatient” for budget cuts. Asked why he isn’t willing to cut more spending to bring the deficit down faster, he said he’s applying “a scalpel to the discretionary budget, rather than a machete.”

What has the White House worried is not the negative reaction from Republicans but criticism from fellow Democrats and friends in the media. MSNBC, for example, called the budget “the big punt.” The Los Angeles Times said that it “landed with a thud.” Even the New York Times groused that “the budget is most definitely not a blueprint for dealing with the real long-term problems that feed the budget deficit.” During a Senate Budget Committee hearing yesterday, North Dakota Democrat Kent Conrad said that the president’s budget “cannot be the answer for this country’s fiscal future.”

The overarching problem for Team Obama is that the budget contains trivial cost savings. In the first two years the deficit is actually worsened. Democratic deficit hawks are upset about the total absence of savings in Medicare, Medicaid and Social Security. Mr. Obama explained his whiff on entitlement reform by saying it should “be a negotiation process” and that Republicans and Democrats need to get “in that boat at the same time so we don’t tip over.” It was hardly Harry Truman saying “the buck stops here.”

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The Cee Lo Green Budget

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From the Wall Street Journal:

The Cee Lo Green Budget
The cynical and unrealistic White House budget.

This was supposed to be the moment we were all waiting for. After three years of historic deficits that have added almost $4.5 trillion to the national debt, President Obama was finally going to get serious about fiscal discipline. Instead, what landed on Congress’s doorstep on Monday was a White House budget that increases deficits above the spending baseline for the next two years. Hosni Mubarak was more in touch with reality last Thursday night.

The White House actually touts as tight-fisted a budget proposing a record $1.645 trillion deficit for fiscal 2011, due largely to a new surge in spending to 25.3% of GDP. That’s more spending than in any year since 1945. Federal debt held by the public—the kind we have to pay back—will rise to 75.1% in 2012, which is the highest since 1951 and more than double what it was as recently as 2007. (See the nearby chart.)

Senior Economics Writer Stephen Moore breaks down the President’s spending and taxing plans. Also, Anne Jolis, editorial writer for WSJ Europe, has the surprising data on extreme weather events.

This $3.73 trillion budget does a Cee Lo Green (“Forget You,” as cleaned up for the Grammys) to the voter mandate in November to control spending. It leaves every hard decision to the new House Republican majority. And it ignores almost entirely the recommendations of Mr. Obama’s own deficit commission. No wonder the commission’s Democratic co-chairman, Erskine Bowles, said Monday that this budget goes “nowhere near where they will have to go to resolve our fiscal nightmare.” And he’s an ally.

How unserious is this budget? Although the White House trumpets $2.18 trillion in deficit reduction over the next decade, those savings are so far off in the magical “out years” that you can barely see them from here. More than 95% of the savings would happen after Mr. Obama’s first term in the White House is over, and almost two-thirds of the promised deficit reduction would arrive after 2016. Pretending to cut deficits by pushing all real cuts into the future is Budget Flimflam 101.

From hard experience, we know that what matters are the cuts and reforms a White House is willing to make now. The Obama budget doesn’t cut a penny from the deficit in the last seven months of fiscal 2011. Over the next three years—through 2013—the spending reductions in this budget add up to a paltry $20 billion net, out of a projected $3.5 trillion deficit. That’s a 0.57% reduction in red ink and less than what the feds spend every two days.

As for Medicare, Medicaid, Social Security and other entitlements, which account for roughly 60% of federal expenditures, the proposed savings are close to zero. The President would allow these programs to continue on automatic pilot, meaning they nearly double to $2.7 trillion in 2021 from $1.4 trillion in 2010.

Every serious analyst agrees that the time to fix these retirement programs is before 75 million graying baby boomers start collecting the benefits and voting as beneficiaries rather than as net payers. Meanwhile, Medicaid spending would grow by 115% over the next decade thanks to that renowned deficit reducer, ObamaCare.

The proudest White House boast is that its budget would cap domestic discretionary spending at current levels for five years. These are programs ranging from NASA to the Washington Metro to school lunch programs to wind turbine grants, which overall and including stimulus expanded by more than 80% in Mr. Obama’s first two years. This spending freeze would cut these programs from 2011-2013 by a grand total of $14 billion.

By contrast, the plan now emerging from House Republicans would cut about $80 billion immediately, and nearly $280 billion over three years—some 20 times the White House savings. Mr. Obama’s budget also assumes annual economic growth of more than 4% from 2012-2014. That’s far more robust than anything this recovery has produced so far, and it is at least a percentage point higher than most private economists or the Congressional Budget Office predict.

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Debt now equals total U.S. economy

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From the Washington Times:

Debt now equals total U.S. economy

President Obama projects that the gross federal debt will top $15 trillion this year, officially equalling the size of the entire U.S. economy, and will jump to nearly $21 trillion in five years’ time.

Amid the other staggering numbers in the budget Mr. Obama sent to Congress on Monday, the debt stands out — both because Congress will need to vote to raise the debt limit later this year, and because the numbers are so large.

Mr. Obama’s budget said 2011 will see the biggest one-year jump in debt in history, or nearly $2 trillion in a single year. And the administration says it will reach $15.476 trillion by Sept. 30, the end of the fiscal year, to reach 102.6 percent of gross domestic product (GDP) — the first time since World War II that dubious figure has been reached.

In one often-cited study, two economists have argued that when gross debt passes 90 percent it hinders overall economic growth.

The president’s budget said debt as a percentage of GDP will top out at 106 percent in 2013, but only if the economy booms.

“I still don’t see a sense of urgency from the president about the massive federal debt,” said Sen. Lamar Alexander, Tennessee Republican. “His budget calls for too much government borrowing – even though the debt is already at a level that makes it harder to create private-sector jobs.”

Speaking on MSNBC on Monday, Jacob “Jack” Lew, the White House budget director, said their long-term plan to lower deficits will stabilize the debt.

“When we came into office, when President Obama took office, the deficit was climbing to over 10 percent of the economy. We have a plan that would bring it down to 3 percent,” he said. “That is the most rapid reduction in the deficit in history. It is what we have to do to be able to say we’re paying our bills and we’re not adding to the debt.”

The administration said debt as a percentage of GDP will stabilize at about 105 percent in the middle of this decade, though those calculations assume economic growth levels significantly above projections of the non-partisan Congressional Budget Office.

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WSJ: Runaway Trains Obama’s high-speed rail plan is a fiscal pipedream

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From today’s Wall Street Journal:

Runaway Trains
Obama’s high-speed rail plan is a fiscal pipedream.

We suppose every President is entitled to a pipedream, but President Obama’s vow in his State of the Union address that 80% of Americans should have access to high-speed rail in 25 years is a doozy. Vice President Joe Biden has followed up by proposing $53 billion in high-speed rail funding over the next six years. Seriously?

On recent evidence, this train is running in reverse. Though the Obama Administration has allocated more than $10 billion for high-speed rail projects the past two years, the new Republican governors of Wisconsin and Ohio, Scott Walker and John Kasich, have rejected the federal money. They don’t want to put their taxpayers on the hook for projects destined for Insolvency Junction. Florida Governor Rick Scott is also reconsidering his state’s proposed Orlando-Tampa line.

Even California, that famous incubator of pipedreams, is having second thoughts. The state has proposed an 800-mile high-speed rail plan from San Diego to San Francisco. Bay area residents are now protesting that the line will damage property values, while Central Valley farmers complain the line will ruin their land. The greater wonder is how the state will pay for a $43 billion train even as it’s facing a $28 billion budget gap over the next 18 months and $20 billion annual deficits four years after that.

Two years ago California taxpayers approved a $9.95 billion bond initiative to fund the train, buying the pitch that it would create hundreds of thousands of jobs and attract 94 million riders. The state’s high-speed rail authority told voters a one-way ticket from San Francisco to Los Angeles would cost $55—about the price of a Southwest flight. They said private equity firms were dying to invest, and that the train would operate without a public subsidy.

Studies by economists and financial consultants Alain Enthoven, William Grindley and William Warren have since debunked the rail authority’s claims. Based on the costs of high-speed rail lines in Europe and Japan, the price tag likely will fall between $62 billion and $213 billion. A one-way ticket from San Francisco to Los Angeles will cost about $190, which means more people will choose to fly.

Because of uncertainty over costs and ridership forecasts, private equity firms say they won’t invest without a revenue guarantee, i.e., an operating subsidy. Even if the state somehow manages to attract $10 billion in private equity, its business plan calls for another $5 billion in local grants and $15 billion more in federal funds. The $15 billion that they want from the feds would be nearly a third of Mr. Biden’s $53 billion figure. Maybe high-speed rail is a back-door bailout for California.

Messrs. Obama and Biden argue that the U.S. has to invest in high-speed rail to stay competitive with the world. Only if we’re competing in the Debt Bowl. Two high-speed railways in the world have broken even, and those are in densely populated areas of France and Japan where people drive less because gas prices are twice as high as in the U.S., and many foreign intercity highways levy tolls.

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IBD Editorial: Obama’s Big Lie On Taxes

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A large and ongoing problem with our public discourse is the dishonesty and disinformation foisted on an unsuspecting public. That’s certainly the case when it comes to taxes.

Sometimes, politicians claim things that just make you turn your head and say, “huh?” That’s what happened last Sunday when President Obama, in a pre-Super Bowl interview with Fox TV’s Bill O’Reilly, said the following:

“I didn’t raise taxes once. I lowered taxes over the last two years. I lowered taxes for the last two years.”

It was a great quote, very dramatic and emphatic. It was also quite wrong. Tax watchdog groups and think tanks have looked at the record and found just the opposite — that Obama has raised taxes numerous times, and that taxes did in fact rise during the first two years of his presidency.

Indeed, in 2009 one of the first things Obama did after entering office was to slap a 156% increase in the federal tax on tobacco — about 62 cents a pack — to pay for the children’s health insurance program.

Whether you think this is a good idea or not, it is a tax.

Please recall the president’s solemn promise in the 2008 campaign that families earning less than $250,000 a year wouldn’t see “any form of tax increase.” As Americans for Tax Reform (ATR) noted, the median income of smokers is “just over $36,000.”

But the granddaddy of them all was the health care bill that the president signed into law last March.

ObamaCare, the Heritage Foundation calculates, “contains 18 separate tax increases that will cost taxpayers $503 billion between 2010 and 2019.” And at least seven of those tax hikes are clear violations of the president’s vow not to raise taxes on the middle class.

So the president not only raised taxes more than once, he raised them massively to help fund his unpopular takeover of health care.

In further assessing Obama’s tax record, one also must look at intent. The White House and Democrats in Congress had explored the possibility of letting all the Bush tax cuts expire last year, which would have been a huge tax hike on all Americans.

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Constitutional Scholar was Against Obamacare Before He was For it

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In 2008 a noted Constitutional scholar made the case against the government compelling people to purchase medical insurance:

Roger Vinson, the Reagan appointed federal judge who ruled that Obamacare is unconstitutional, actually cited Obama’s statements in his ruling:

I note that in 2008, then-Senator Obama supported a health care reform proposal that did not include an individual mandate because he was at that time strongly opposed to the idea, stating that, ‘If a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house,’”

The Washington Times reports:

The footnote was attached to the most critical part of Judge Vinson‘s ruling, in which he said the “principal dispute” in the case was not whether Congress has the power to tackle health care, but rather whether it has the power to compel individual citizens to purchase insurance.

The Left is out claiming that Judge Vinson’s decision was an example of judicial activism. Interesting that the Left supports discovering ‘rights’ that “emanate from penumbras” in the 14th Amendment, but call any decision made against them ‘judicial activism.’

Since Marbury v. Madison, the court has had the responsibility of judicial review. If a law is unconstitutional it would be an activist decision for the court to rule it constitutional. In the case of Obamacare, the individual mandate is unconstitutional. Nowhere in the Constitution does the federal government have the right to compel citizens to purchase medical insurance. If the commerce clause is going to be used to justify the individual mandate, the Constitution might as well be thrown out, because such a decision would give the federal government unbridled power.

Thankfully, we can turn constitutional expert Barack Obama, who explained all of this just over two years ago.

Reagan and Obama – NO COMPARISON

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With President Obama’s non-pivot to the center, the Left is claiming that Barack Obama is really the second coming of Ronald Reagan. TIME magazine even featured a picture of Presidents Reagan and Obama photoshoped together, with the caption “Why Obama loves Reagan.”

Any comparison of Obama to Ronald Reagan is patently absurd. The two men are diametrically opposed on just about every issue.

The best example of the difference between the two presidents is their admiration for the United States:

Ronald Reagan saw the United States as a “shining city on a hill.” As president, Reagan told the rest of the world of the greatness of his country, extolling the American values of freedem and liberty. On the other hand, Barack Obama has gone around the world trashing his country, and heaping praise on every tin pot dictatorship in sight. President Obama even denigrated the idea of American Exceptionalism in a foreign country. Jimmy Carter would be a more fitting forefather for Barack Obama.

Can anyone imagine Ronald Reagan bowing before foreign autocrats?