No president in our nation's history has spent as much as Obama or run up more debt. His plan would result in a monstrous $744 billion budget deficit in 2014. It projects the national debt would grow to an unprecedented $25 trillion over the next decade from today's $16.8 trillion.
That will further endanger the government's already shaky solvency and undermine our economic future.
Despite a weak economy that grew by only 0.6 percent in the fourth quarter of 2012, and the snail's pace job growth that shrank sharply last month, his budget calls for nearly $700 billion in new taxes on employers, investors, and households in the highest tax brackets. Even smokers would have to pay nearly $1 more for a pack of cigarettes.
If you thought Obama's class warfare ended with his re-election campaign, forget it. In addition to raising taxes on just about anything that moves, he wants to impose a new minimum tax rate of 30 percent on people who make more than $1 million a year.
And brace yourself, because he says he's not budging this time from his demand for higher tax rates. Any budget deal later this year, he said Wednesday in his remarks in the White House rose garden, must raise new tax revenue from "the wealthiest individuals and biggest corporations."
And that's on top of the $600 billion he has previously approved in higher income taxes on Americans earning more than $400,000 a year. In the space of two years, he will squeeze $1.3 trillion more out of our sluggish, over-taxed, under-invested economy when millions of struggling businesses are hiring less and many Americans can't find full-time jobs.
This is an economy that cries out for bold, new initiatives to boost venture capital investment for business expansion and new start- ups to put people back to work.But Obama's budget doesn't offer one substantive initiative that would do this.
Instead, he wants hundreds of billions in more spending -- at least $300 billion more just for additional public works jobs on top of the nearly $800 billion he poured into similar projects in his first term. All that spending had little if any lasting impact on the economy or the real unemployment rate, now estimated at nearly 14 percent if you add part-timers who need full-time jobs and discouraged adults who stopped looking for work.
His latest budget plan is bulging with new spending for the laundry list of initiatives he spelled out in his expensive State of the Union address, including an ambitious $77 billion expansion of pre- school education. And that's just for starters.
There's more money for his green energy boondoggles that have led to embarrassing bankruptcies and relatively few jobs. There's $100 billion for roads and railways, $1 billion for 15 new federal institutes to teach innovation to manufacturers, and $8 billion for community colleges to help students obtain jobs. The spending list is seemingly endless.
Ask economists what is driving the government's higher deficits -- besides entitlements and discretionary spending -- and they'll point to weak economic growth and the high unemployment rates that have squeezed government tax revenues. Obama's anti-job growth budget is Exhibit A in both cases.
His budget also calls for modest cuts in Social Security benefits by curbing the way annual cost of living increases are measured. But the Democrats will never vote to slow the growth in entitlements.
When Obama took office in 2009, he promised to cut the deficit in half by the end of his first term. He's never come close.
Obama's record-shattering deficits since he took office: $1.4 trillion in 2009; $1.3 trillion in 2010; $1.3 trillion in 2011; $1.2 trillion in 2012; and nearly $900 billion this year, according to the nonpartisan Congressional Budget Office.
Unprecedented federal spending levels, far in excess of the government's income, are also fattening the publicly held debt as a percentage of the U.S. economy. In 2010, that debt rose to more than 50 percent of the economy.
Under Obama's budget it would get worse, a lot worse. According to CBO, the ballooning debt will be 87.4 percent of the economy by 2021 if steps are not taken to slow the rate of spending and strengthen economic growth.
"Obama turned a temporary expansion of government, through TARP and the auto bailouts, into a permanent expansion of government," says Stanford University economist Keith Hennessey.
"Before Obama, federal spending averaged 20 percent of GDP (the economy's entire gross domestic product) for decades. Now he is presiding over a much bigger government, at 24 percent," Hennessey says.
Obama wasn't in a hurry to send this budget to Capitol Hill. He was no doubt taking time to ruminate about his politically risky proposal to cut into Social Security cost-of-living increases would fare in his own party. They didn't like it.
While the change in the inflation measurement sounds courageous, it would reduce future cost of living increases by a mere three-tenths of one percentage point annually, or about $13 billion a year. In terms of the huge insolvency gap we face from entitlements, his thimble-sized proposal hardly nicked the problem.
Or maybe Obama realized that presidential budgets, for all the media attention, are routinely ignored by Congress. In this case, though, the House and Senate budgets had already left the station before his plan got there.
Arriving 65 days late, this is the first time in almost 100 years that a president has sent his budget to the Hill long after House
Republicans and Senate Democrats adopted their own spending plans.
There's a vast difference between Congress's versions. The House raises no taxes, balances the budget and reforms Medicare, offering a choice between the existing system or a federally-assisted, less costly private plan.
The Senate's bill would raise taxes, doesn't balance the budget and ignores entitlements. In fact, four Democrats voted against it.
The unfathomable policy-making gulf between the two still seems beyond the reach of any possible compromise. There is no way the House will vote to raise either taxes or spending.
But with Obama's plan on the burial list, maybe there's a glimmer of hope that a scaled down budget with no new taxes can emerge later this year. We'll see.
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