If Democratic deficit hawks don’t stand up to their president now, when will they?
If you liked the $787 billion stimulus package, followed by an earmark-packed $410 billion omnibus spending bill, you’ll love President Obama’s $3.55 trillion federal budget proposal. At least that seems to be the logic behind this latest round of federal spending, clocking in at nearly $3.6 trillion a little over a year after the first $3 trillion budget and just six years after on-budget spending first passed $2 trillion.
Rep. Cynthia Lummis, a Wyoming Republican who sits on the House Budget Committee, says that taxpayers may be “fatigued and overloaded” by the numbers floating out of Washington after a rapid succession of bailouts, rescues, recovery plans, and stimulus packages. But Republican leaders warned in a conference call Wednesday that the bill for all this spending will soon come due and “the bill is coming in the form of President Obama’s budget.”
The budget increases federal spending by $1 trillion over the next decade, doubles the publicly held national debt, projects $600 billion annual budget deficits even after the recession is over, and raises taxes by $1.4 trillion. Obama plans to raise the top two income tax brackets to 36 percent and the Clinton-era maximum rate of 39.6 percent. His budget phases out personal exemptions and limits itemized deductions for those deemed wealthy, reducing the value of their deduction by one-fourth.
But not even those outside the “wealthiest 1 percent” emerge unscathed. The Obama budget proposes a $646 billion cap-and-trade scheme that energy companies are sure to pass on to consumers. “The president says there isn’t anyone that makes under $250,000 that’s going to pay one dime of new taxes,” House Minority Leader John Boehner said in a radio interview this week. “It’s just not true. They’ve got this energy tax in there that they call cap-and-trade. I call it cap-and-tax. If you drive a car, you’re going to pay it. If you buy goods that are produced in the United States, you’re going to pay it. And if you have the audacity to flip on a light switch, you’re going to pay it.”
Ultimately, it doesn’t matter what House Republicans think of the new president’s budget. Obama’s party is firmly in control of Congress. But some key Democrats may yet balk at the price tag, especially after voting for several large spending items in just the past few months. This problem will only get worse if, as expected, the Congressional Budget Office announces today that deficits over the next ten years will be $1 trillion larger than Obama’s spending plan assumes.
Senate Budget Committee Chairman Kent Conrad (D-N.D.) has been complaining that the deficits anticipated by the Obama administration are “unsustainable” and he has suggested to Washington reporters that the budget presently lacks the votes needed to pass. Conrad has also hinted that he is opposed to the White House using the reconciliation process to pass its health care plan, a position that helped doom the Clinton administration’s health proposal when taken by Sen. Robert Byrd (D-W.Va.) back in 1993.
In the House, the Blue Dogs are howling. The coalition of 51 moderate to conservative Democrats has proposed capping non-defense discretionary spending at the rate of inflation. They may also object to any new programs that increase the size of the deficit. “We’re concerned…with the Obama budget that we are — according to their numbers — maintaining $500 billion or more in deficit spending in the latter five years,” Rep. Stephanie Herseth Sandlin (D-S.D.), a Blue Dog Coalition co-chair, told Reuters.
So far, the Blue Dogs have failed to do much to restrain the Obama administration or their liberal congressional leadership. They lost the fight to keep Congressman Henry Waxman (D-Calif.) from seizing jurisdiction over climate change policy from Congressman John Dingell (D-Mich.). While they did delay and somewhat reshape the stimulus package, only 11 Blue Dogs voted against the original, more expensive version and just six voted against the deficit-increasing “compromise” that eventually became law.
In a similar vein, leading Senate Democrats like Conrad frequently complain about the size of the deficit and national debt. Yet the Politico reported: “But thus far, Conrad seems in retreat himself, saying this week that he now expects to report only a five-year budget next week — putting off a real fight over the long-term debt.”
Nevertheless, a few centrist Democrats seem to be hardening in their opposition. Sen. Evan Bayh (D-Ind.), who is up for reelection in 2010, voted against the appropriations act, wrote a Wall Street Journal op-ed asking Obama to veto it, and has formed a working group of the least liberal Senate Democrats.
Democrats controlled both houses of Congress by similar margins when a coalition of Republicans and right-leaning Democrats came within one vote in each chamber of voting down Bill Clinton’s first budget sixteen years ago. Back then, there were more conservative Democrats in Congress and the president was already out of his honeymoon period. But it’s also the case that Clinton’s budgets considered deficit reduction a priority while Obama’s might produce $6.9 trillion in future deficits.
That’s trillion, with a “t.” If that isn’t a target deficit hawks in the Democratic Party can hit, then the Blue Dogs won’t hunt.
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