It can’t be done by constantly chasing lower than expected revenues.
President Obama’s budget proposes all-time record federal spending of $3.834 trillion for fiscal 2011, up 29 percent from fiscal 2008 and 40 percent from fiscal 2007, which was the last budget adopted by Republican congressional majorities. The deficit for the current fiscal year 2010 is estimated in the president’s own budget documents to reach nearly $1.6 trillion, the largest government deficit in world history, up from $161 billion for fiscal 2007. This is what moved Rep. Jeb Hensarling (R-TX) to say to President Obama at the Republican Retreat in Baltimore last January, “What were the old annual deficits under Republicans became the monthly deficits under Democrats.”
Moreover, the outlook doesn’t improve in the medium term. Over the next 10 years federal deficits under President Obama’s budget will total almost $10 trillion ($9.761). The annual deficit by 2020 would still be well over $1 trillion ($1.253) and rising.
As a result, the national debt under President Obama’s budget would almost quadruple from $5.8 trillion at the end of 2008 to $20.9 trillion by 2020. Indeed, it would virtually double in just four years from the end of 2008, to $11.6 trillion in 2012.
While campaigning in New Hampshire in September 2008, Obama pledged to the American people:
I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. [emphasis added.]
This was not a one-time promise. It was the centerpiece of his campaign, repeated over and over, including during the presidential debates.
But today, after proposing his second budget with record-shattering federal spending, deficits, and debt, Obama is explicitly abandoning this no tax increase campaign pledge, in connection with his appointment of a presidential deficit commission. In an interview with BusinessWeek on February 9, Obama was asked, “If your deficit commission comes back and says we would recommend raising taxes on households earning less than $250,000 a year, would you accept that as part of a larger deal?” He responded,
I don’t want to prejudge the commission because the whole point of it is to make sure that all ideas are on the table, and let’s see what folks can come up with. What I want to do is to be completely agnostic in terms of solutions.
Obama further revealed the tax increase intent behind the commission in saying, as quoted by the New York Post on February 12, “The notion that somehow we can just cut our way out of this problem is not true.”
But the president’s budgets with the above deficits and debt already presume $2 trillion in tax increases, mostly focused on those despised “rich” making more than $250,000 a year. Moreover, as the Tax Foundation has carefully documented, before those tax increases even go into effect, the top 1 percent of income earners already pay more federal income taxes than the bottom 95 percent! So we are not going to get still more out of those taxpayers, in any event. Indeed, the presently planned tax increases on those evil “rich” will not raise nearly the revenue expected, which means currently projected federal deficits and debts will be even higher.
This is why Obama, Nancy Pelosi, and the Washington establishment are now talking about massive new tax increases on working people to pay for their spending explosion.
The traditional Washington establishment approach to balancing the budget is to negotiate an agreement on a package of spending cuts and tax increases. This is what Obama’s deficit commission seems prepared to do. But this approach never works and has no prayer of ever working. The tax increases are permanently adopted into law. But the spending cuts are never adopted, or if they are they are soon swept away in the next liberal budget.
Then the tax increases don’t raise the revenue expected, because, as no one in establishment Washington seems to be able to imagine, tax increases have negative incentive effects that reduce the expected revenue increases. So the deficit reappears, and persists until the voters can be fooled by the whole charade again. We have seen this over and over at the state level as well as at the federal level.
The federal experience goes back to the 1982 budget deal, when congressional Democrats promised President Reagan $3 in spending cuts for every $1 in tax increases. Reagan went to his grave still waiting for those spending cuts.
Then there was the 1990 budget deal, when President Bush agreed to violate his famous 1988 campaign pledge, “Read my lips, no new taxes,” in order to get a balanced budget. The budget deficit increased from $221 billion in 1990, to $269 billion in 1991, to $290 billion in 1992, when the voters booted him out office for violating the no tax increase pledge that got him elected.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?