Wednesday’s press conference marked the first occasion journalists have had to question the President directly – about anything – in eight months, and President Obama tipped his hat on his plans to confront the coming fiscal cliff with chastened House Republicans. In short, he will probably raise tax rates for the wealthy.
But thanks to an explosive and, as my colleague Donny Deutsch put it, testosterone-fueled defense of UN Ambassador Susan Rice, a lot of what the President also said about his plans to reduce the deficit went ignored. That’s a shame – they were quite illuminating.
Before Obama’s “bring it on” taunt to Senators John McCain and Lindsey Graham sucked all the oxygen out of the room, he was asked, if the wealthy must pay more, “would closing loopholes instead of raising rates for them satisfy you?” In the answer to that one question the President proved in four different ways that he just doesn’t get it.
Let’s start with this declaration: “What I’m not going to do is to extend further a tax cut for folks who don’t need it, which would cost close to a trillion dollars.”
The part to ponder there is the clause “who don’t need it,” which opens up a philosophical can of worms that conservatives tried – heroically but unsuccessfully – to litigate during the presidential election.
Basing an economic, monetary or tax policy purely on “need” is either an embarrassingly naïve or dangerously misguided interpretation of both collectivism and capitalism, which presumes that as free people we are only entitled to what we minimally require to survive. In addition to conjuring images of bread lines and rationing, the suggestion undermines and in fact undoes the philosophical foundations on which both our legal system and our economic system are based: property rights. John Locke and Max Weber would be perplexed, to say the least.
Wealthy, poor or middle class, no one benefits when the government can stipulate how much its citizens “need.”
The next juicy nugget is far more Earthly. In fact, it’s just about math. In Obama’s words, extending the Bush tax cuts would cost one trillion dollars, and we can’t make up that trillion dollars by closing loopholes and deductions. “You know, the math tends not to work.”
Oh? Although there are a number of independent think tanks who suggest that capping deductions and closing loopholes can, in fact, raise a trillion dollars, the idea that taxing the wealthy will get us there also, er, tends not to work.
According to the Congressional Budget Office, letting tax rates rise to Clinton-era levels for families making more than $250,000 a year would raise a mere $824 billion. Over ten years. As Conn Carroll explained in the Washington Examiner, that’s not enough revenue to cover the spending cuts in the sequester, effectively reducing the deficit by $0. Math.
The third item relates to Obama’s seeming Romnesia about his own campaign, which spent months upon months drawing deep trenches between the candidates that made the 2012 election seem like a choice between civilization and the Visigoths. The differences included their views on women (one hated them, apparently); their views on minorities (one hated them, apparently); their views on immigrants (one hated them, apparently); their views on the elderly (one hated them, apparently); and, well, you get the idea. For post-election Obama, it seems that the election boiled that hearty, rhetorical soup down to vapors. The thick identity politics bouillabaisse that defined the campaign has vanished into a faint wisp.
Now, we are to believe the campaign was singularly about a mandate to raise taxes on the wealthy. As Obama put it, “if there was one thing that everybody understood was a big difference between myself and Mr. Romney, it was, when it comes to how we reduce our deficit, I argued for a balanced, responsible approach, and part of that included making sure that the wealthiest Americans pay a little bit more.”
That was the “one thing” we should take away from the past year of campaigning? For an election that was supposed to be about the economy, we sure did spend a lot of time talking about everything else.
The final trouble spot illuminated by Obama’s presser came when the President attempted to make his lustiest defense of raising taxes on the wealthy. “The majority of voters agreed with me, by the way – more voters agreed with me on this issue than voted for me.”
Essentially, the message wasn’t “this economic policy will work best to reduce the deficit,” but “this is the economic policy you asked for.”
He’s not wrong. Polling found that taxing the wealthy is popular. But if this is how Obama 2.0 will work, well, this is excellent news. Because if the new mantra is “ask and you shall receive” I have full confidence that the new administration will also deliver on all the other desires expressed by the electorate, including those voters who didn’t pull the lever for Obama.
Desires for things like a balanced budget, reducing the size of government and comprehensive tax reform - all of which a majority in this country want. Forty-nine percent of voters on election day said they wanted to repeal parts or all of Obamacare, compared to 44% who wanted to keep it untouched. I assume he’ll see to that request. Poll after poll also finds that most people favor immigration laws that are well-enforced, and that controlling the border is more important than amnesty. Most people support entitlement reforms like means-testing for Medicare and Social Security and raising the Social Security retirement age. If Obama’s second term is merely based on wish fulfillment, we’ll have our center-right country back in no time.
In between David Petraeus and Susan Rice, President Obama managed to lay out his economic vision for the country. And it’s one in which the government decides how much you need, math has a personality, class warfare is a high priority, and our economic policy will be based on popularity and not efficacy. It doesn’t matter much now, because we’re stuck with whatever happens. At least this time we know what’s coming.
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