Republicans Should Go Big to Win the Budget Showdown - The American Spectator | USA News and Politics
Republicans Should Go Big to Win the Budget Showdown

On Monday, the news broke that our president and his cadre of Top Men were fulfilling his duty to submit a budget to Congress by releasing a $4 trillion boondoggle replete with tax increases and leftist fantasies of burgeoning government swag. Barack Obama’s new budget never balances. In fact, by his own estimate he’ll be leaving the federal debt at $26 trillion in ten years—and the real effect, were Congress to allow this insanity to become reality, would be far worse.

And in typical Obama fashion, he’s couching this breathtaking departure from fiscal responsibility in Orwellian verbiage. “I want to work with Congress to replace mindless austerity with smart investments that strengthen America,” he said, in introducing a $478 billion “infrastructure” plan to fix roads and bridges—the ones his $1 trillion “stimulus” package was supposed to fix back in 2009. This orgy of new “investment” will allegedly be paid for by imposing taxes on the foreign earnings of American companies, earnings those companies have refused to repatriate for the better part of a decade because of the already-high levels of taxation they’d be forced to pay. Obama would eliminate the choice to keep that capital overseas tax free by imposing a one-time 14 percent tax on already-earned overseas profits whether repatriated or not, and then a minimum tax of 19 percent on overseas profits going forward, whether repatriated or not.

Consider the grasping immorality of that idea, if you will. No other civilized country imposes taxes on economic activity over which it has no jurisdiction as is; at least American taxation of foreign earnings only occurs when those earnings are voluntarily brought into the federal government’s jurisdiction (and then taxed at rates as high as 35 percent). But if Obama gets his way the U.S. government and specifically the IRS would declare itself the world’s taxing authority and lay its hands on other people’s money already taxed in the country in which it was earned. This country has had some thoroughly obnoxious and arrogant Democrats in the White House and yet never gone so far.

But those aren’t the only new taxes our would-be Thief-in-Chief is proposing. He would jack up the capital gains tax rate, hiking it to 28 percent. He would nearly double federal cigarette taxes, from $1.01 per pack to $1.95. He would assess a fee on financial institutions with over $50 billion in assets, a fee that would certainly be passed along to their customers. He would limit tax deductions by top earners to a 28 percent rate, even if their income is taxed at 39.6 percent. He’d raise estate and gift taxes. He’d repeal the use of LIFO (last-in-first-out) accounting for the purposes of inventory taxes. He’d impose new taxes on oil and gas production. He’d reinstate Superfund taxes. He’d tax carried interest as ordinary income. He’d impose more taxes on coal. He’d repeal tax-exempt bond financing for pro sports facilities (the one thing that actually isn’t all that bad an idea). In short, Obama has pulled all the cushions off your couch looking for spare change and he’s rifling through your laundry seeking stray dollar bills in your pants pockets. There is no evidence of restraint here, much less shame.

And what benefit to the country? Besides all the shiny new roads and bridges we were promised and didn’t receive six years ago, Obama proposes to shower Americans with mountains of free swag.

He’s back with the plan to offer free community college he offered up in his State of the Union speech. He demands a $3,000 increase in tax credits for child care for families with kids under five years old. He wants universal pre-school, which is an attempt to create more membership in the teachers’ unions. He’s pushing a $500 tax credit for two-income families—a disincentive for stay-home moms. He proposes to spend more federal dollars on math and science education, further federalizing K-12 schooling when it’s clear that doesn’t work. He wants a billion dollars in foreign aid to Central America. He wants to shower states with incentives to develop paid leave programs for workers (yes, paying people not to work). And on, and on.

And he proposes to make all this acceptable to national-security conservatives by proposing more than $500 billion in new defense spending over the next ten years.

Obama does propose budget cuts, of course—to the D.C. school voucher program and the Veterans Choice Program, which gives victims of the inefficiencies at the VA the ability to seek prompt medical care in the private sector. Naturally, those things would have to go.

This budget is dead on arrival, or at least it had better be. But Obama coupled his budget proposal with a threat. “I’m not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth,” he said, meaning that any thoughts of fiscal restraint Republicans in the House and Senate might have carry with them the prospect of a government shutdown. Obama is rattling his saber at the Republicans, the precise opposite that prudent governance would demand after the results of the November midterm elections, because he thinks he can win the public opinion battle either way. Either he’s going to get what he wants in the budget—and with a wish list this long, he can certainly declare victory even if he only gets some of the goodies he wants—or he thinks his pals in the mainstream media will give him cover by blaming a shutdown based on a budget impasse on John Boehner and Mitch McConnell.

So what will the GOP do? Clearly they can’t accept Obama’s budget, or anything like it. Backing him off his fiscal incontinence is their only option. The question is how to do it in a way that frames the political equation so that it’s the president paying the price for taking an extreme position.

My answer: go big. Stop wasting time and pass a flat tax in the House and Senate. Pass gigantic block grants dissolving entire federal agencies (Department of Education, EPA, Department of Energy) and moving their funding and powers back down to the states. If there is to be a showdown and an impasse, at least let’s have it be over the question of whether this country is primarily governed at the statehouse, where neighbors can and do resolve their differences and get the country’s business done, or in a Washington poisoned by partisanship and politics.

Boehner and McConnell can’t play Obama’s game. They’ll lose. He’s counting on that.

Scott McKay
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Scott McKay is publisher of the Hayride, which offers news and commentary on Louisiana and national politics. He’s also a writer of fiction — check out his three Tales of Ardenia novels Animus, Perdition and Retribution at Amazon. Scott's other project is The Speakeasy, a free-speech social and news app with benefits - check it out here.
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