Obama Budget Analysis: True Savings or Riddled with Gimmicks?
- Posted on February 13, 2012 at 1:23pm by
Christopher Santarelli
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The big news of the day is the release of and reaction to President Barack Obama’s budget for FY 2013, which all signs point to being dead on arrival in the Democrat-controlled Senate for the third year in a row. Some stats from the budget assembled by the Associated Press at first glance:
- Is a $3.8 trillion spending plan that seeks to achieve $4 trillion in deficit reduction over the next decade
- Looks to achieve $1.5 trillion in deficit reductions through tax increases on the wealthy and removing certain corporate tax breaks. Will seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes.
- Projects a deficit for the current budget year of $1.33 trillion, marking the fourth straight year that the deficit would top $1 trillion.
- Projects the deficit would decrease to $901 billion in the 2013 budget year, which begins October 1, confirming $3.8 trillion in spending next year, an increase of 0.2 percent over this year’s expected outlays, and a 17.5 percent increase in revenues.
- Projects deficits to gradually go down to $575 billion in 2018, which would still be higher in dollar terms than any deficits run up before Obama took office. It would be below 3 percent of the total economy, however, and thus at a level economists generally consider sustainable.
- Imposes a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes.
- Would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and it claims significant savings from ending the wars in Iraq and Afghanistan.
- Would increase spending on transportation projects, including efforts to expand inner-city rail services, by $476 billion.
- Proposes $30 billion to modernize at least 35,000 schools and $30 billion to help states hire teachers and police, rescue and fire department workers.
- Seeks $360 billion in savings in Medicare and Medicaid mainly through reducing payments to health care providers.
- Projects that Medicare spending will double over the coming decade from $478 billion this year to almost $1 trillion in 2022.
- Medicaid would more than double from $255 billion this year to $589 billion by 2022.
- Makes no changes to Social Security
The Washington Post notes that the spending plan forecasts the national debt to grow significantly faster than previously thought:
“The president’s outlook for debt reduction has deteriorated markedly since September, when Obama told Congress that his proposals would hold annual deficits well under $600 billion after next year and permit the debt held by outside investors to rise to $17.7 trillion by 2021, or 73 percent of the overall economy.”
[...]
“The new 10-year blueprint shows annual deficits exceeding $600 billion every year except 2018. And the portion of the debt held by outside investors would grow to $18.7 trillion by 2021, or 76.5 percent of the economy — a full $1 trillion higher.”
The Post notes that the administration will also slash Community Development Block Grants by half, terminate the C-27 airlift aircraft, cut airport grants by 27 percent and reduce funding for robotic exploration of Mars. Obama’s call to tax the rich primarily comes from his decision to permit the Bush tax cuts to expire on income over $250,000 a year and from limiting the value of itemized deductions for those households.
The President makes the case for his budget on the Office of Management and Budget webpage:
“We now face a make-or-break moment for the middle class and those trying to reach it. After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last.
The President’s 2013 Budget is built around the idea that our country does best when everyone gets a fair shot, does their fair share, and plays by the same rules. We must transform our economy from one focused on speculating, spending, and borrowing to one constructed on the solid foundation of educating, innovating, and building. That begins with putting the Nation on a path to living within our means – by cutting wasteful spending, asking all Americans to shoulder their fair share, and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs. The Budget targets scarce federal resources to the areas critical to growing the economy and restoring middle-class security: education and skills for American workers, innovation and research and development, clean energy, and infrastructure.
The Budget is a blueprint for how we can rebuild an economy where hard work pays off and responsibility is rewarded.”
But Republicans in Congress argue that the President‘s budget is not a practical plan to get the nation’s fiscal house in order but rather a pure political document riddled with inaccuracies and false promises, that in reality achieves a deficit reduction of just $273 Billion not $4 trillion.
Republicans on the United States Senate Budget Committee released a statement shortly after the release of the President’s budget, arguing it’s claimed deficit reduction is based on the following deceptions:
- It does not count the cost of replacing the $1.2 trillion sequester (spending reduction plus interest savings) required under current law. This is plainly true because the president eliminates the reductions required by the law that he signed and replaces it with tax increases. Then he fails to score the cost of repeal, a monumental deception.
- It counts the inevitable winding down of the war costs in Afghanistan—all of which is borrowed—as $1 trillion in spending reduction; and
- It buries the $522 billion cost of freezing the Medicare physician update in the baseline, without identifying any source of funds to pay for it
The statement also notes the President’s increases in the gross debt by approximately $11 trillion is on top of nearly $5 trillion that has already accumulated during Obama’s first three years in office.
“Fiscal sleight-of-hand accounts for $3.7 trillion of the president’s deficit reduction, leaving the debt in the president’s plan largely unchanged from what would be expected to occur under current spending law and tax policies ($11.2 trillion rather than $11.5 trillion). Even worse, the president’s proposed switch from current law spending reduction to even higher taxes contributes to a 62 percent increase in spending between 2011 and 2022. Once the gimmicks are taken away, the president’s budget becomes another enormous tax-and-spend plan that ignores the drivers of our debt and is alarmingly inadequate for the undisputed fiscal realities of a growing debt and aging population.”
Sure to ignite controversy, Reuters reports that the budget also contains more than $800 million in economic aid to help “Arab Spring” countries swept by revolutions. The President will maintain military aid to Egypt at the same level of recent years — $1.3 billion — despite a crisis triggered by an Egyptian probe targeting American democracy activists. Reuters notes that most of the economic aid for the Arab Spring countries — $770 million — would go to establish a new “Middle East and North Africa Incentive Fund,“ to ”provide incentives for long-term economic, political, and trade reforms to countries in transition — and to countries prepared to make reforms proactively.”
Senator John Barrasso of Wyoming was on Fox News Channel this morning where he argued that the President is using “accounting gimmicks” in his new budget:
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Comments (75)
Razorhunters
Posted on February 13, 2012 at 2:42pmAnyone still paying taxes to this beast desrves what they get…
Fck this Criminal Govt.
Report Post »progressiveslayer
Posted on February 13, 2012 at 3:02pmIt’s a myth that the IRS has never lost in court,check out the dvd America freedom to fascism or this clip.
http://www.youtube.com/watch?v=lUpZhhbKUBo
Report Post »ChiefGeorge
Posted on February 13, 2012 at 3:31pmDid anyone catch what BHO said today?
Dear Leader called the American “Dream” now the “American Promise” in his speech today. Now the government has a role in helping everyone pursue life, liberty and happiness.
Thomas Jefferson would beg to differ as it is a right to pursue these things. Government cannot and should not make sure this happens.
Report Post »Razorhunters
Posted on February 13, 2012 at 3:36pmyep love that vid…
me and mine stopped in ‘02 when had proof that govt did 9/11.
Report Post »Razorhunters
Posted on February 13, 2012 at 5:02pmChiefGeorge,
Report Post »sorry cannot watch this criminal…disgusts me to no end.
thanks much for the info.
spirited
Posted on February 13, 2012 at 6:00pmYes, CHIEFGEORGE.
>“Dream” replaced with “promise”…and his entire bamboozling speech
Report Post »abbygirl1994
Posted on February 13, 2012 at 2:35pmIf i comes out of this administration, then its full of gimmicks. The devil is working big tim i DC!
Report Post »Snowleopard {gallery of cat folks}
Posted on February 13, 2012 at 2:40pmIndeed, and the devil in the flesh – Soros is behind this mess as well. This budget mess is made for political points only – Obama will use the failure of it to blame the right and tea party, insisting they are holding up ‘what needs to be done’ and thus ‘force me (obama) to go behind Congress to do what needs to be done.’
This is a massive smoke screen – period.
Report Post »SheriS
Posted on February 13, 2012 at 3:37pmThe Republicans in Congress are already exposing some of the facts! The lawsuits will be starting soon over the “contraceptive” issue as well. All kinds of things in the news today—Media Matters, Soros run group is exposed by Fox News—problem for me is where have they been! Soros work has been known since the Clinton days but no major network would expose it! Fox is finally doing the work of the MSM because they are all part of the Soros run machine! Exposure will be amazing to watch what happens as it started with the Clinton administration and was known at that time that Soros was pulling the strings for Billy Bob Clinton—-today’s article speaks about a Media Matters person being in the White House—wow what a shock since they have been since Obama took office–remember the ranting blonde who exposed her love of Mao—some speculated at that time that she was a Soros plant along with Van Jones! Truth never hides forever–it is coming out time for the Obama administration!
Report Post »TheObamanation
Posted on February 13, 2012 at 2:34pmI vote NO on his budget … even though I didn’t read it … you gotta vote NO … then find out what”s in it.
Report Post »CatB
Posted on February 13, 2012 at 3:25pmI heard on the radio .. he projects an increase in taxes to the feds .. of over 17%! They are coming for your “change”. Oh and unemployment at 8% or less .. of course we know those are phoney numbers also.
Report Post »338lapua
Posted on February 13, 2012 at 2:32pmThis “budget” reflects the utter and total incompetence of this president and this……“administration”. I have seen The Three Stooges demonstrate better 1) Planning 2)foresight 3)problem solving ability. And you know what? I actually enjoy the stooges. Oh yeah…..to the dept of homeland security, I AM the type of folk you think you need to keep an eye on. This “budget will not even be palatable to dumocrats, Obama is going away this November, they are not going to hitch their wagon onto the Hindenberg. They of course will blame repubs…….but who REALLY is to blame. Moderate and independent voters who made this (presidency?) possible. Here is a mirror, look long and look hard, then stay HOME in November.
Report Post »ambrosia
Posted on February 13, 2012 at 2:32pmObama is too busy, campaigning to sit down and hammer out any budget,
so as usual, he & his indignant administration,
throw together a scrapbook of crap,
to toss at Congress
so he can blame them, for sticking their nose up at it.
He is a National Disgrace !
America can NOT allow Obama a second term.
Obama is a disgrace & Romney is a disaster.
Gingrich is the ONLY one, who can STOP this derelict.
Focus America, everyday….the choice gets clearer.
We need the BEST Leader…….Gingrich, ALL the way !
Gingrich/West 2012
Report Post »http://www.newt.org
kfalcon22000
Posted on February 13, 2012 at 2:24pmLet’s see, everyone has to do their fare share or else what will happen to them? Works great in communist countries, NOT. Telling people to stop spending money on expensive items is not only hypocritical, but is same mistake that Herbert Hoover made. It worked well as we slid into the Great Depression. Didn’t it? I THINK NOT.
Didn’t anyone in the Obama regime ever take classes in American and world history?
Report Post »Pendragon
Posted on February 13, 2012 at 2:31pmDo you know how to catch wild pigs?”
The professor thought it was a joke and asked for the punch line. The young man said that it was no joke.
“You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming.
When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.
The pigs, which are used to the free corn, start to come through the gate to eat that free corn again.
You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.
Soon they go back to eating the free corn . They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.”
The young man then told the professor that is exactly what he sees happening in America. The government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax cuts, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfar
Report Post »spirited
Posted on February 13, 2012 at 6:07pmExcellent description.
>“Lipstick on a pig is still a pig” ~Barck Obama
Report Post »MistaB
Posted on February 13, 2012 at 2:23pmThis is what happens without a balanced budget amendment. Shame on those that didn’t vote for it. These are the RINOs that were involved:
Dick Lugar of Indiana
Lamar Alexander of Tennessee
Roy Blunt of Missouri
Thad Cochran of Mississippi
Susan Collins of Maine
Jeff Sessions of Alabama
John Hoeven of North Dakota
Kay Bailey Hutchison of Texas
Jim Inhofe of Oklahoma
Lisa Murkowski of Alaska
Pat Roberts of Kansas
Richard Shelby of Alabama
Roger Wicker of Mississippi
Time for them to be voted out!!
Report Post »I.Gaspar
Posted on February 13, 2012 at 2:28pmGood idea to keep bringing these names up so we don’t forget who helped make it easier for the new dictaor in chief.
Report Post »3monkeysmomma
Posted on February 13, 2012 at 4:28pmIts time for America to decide: We can be a nation with a Balanced Budget Amendment or we can be Greece.
Report Post »3underpar
Posted on February 13, 2012 at 2:22pmI would like to provide some intelligent comments on this “budget”. However, it is ridiculous beyond comprehension. Can you say Government by CONTINUING RESOLUTION IN 2012 AND BEYOND. I hope the TEA PARTY will again rise to the occasion and help boot the author of this ridiculous piece of drivel back to Chicago where he belongs.
Report Post »fixer
Posted on February 13, 2012 at 3:31pmor Kenya
Report Post »Nemo13
Posted on February 13, 2012 at 2:13pmNothing that has Obama attached to it equals any kind of truth. With Obama, you have lies, questionable actions, shady cover ups, etc. Obama and his band of domestic enemies should all be in prison.
Report Post »kfalcon22000
Posted on February 13, 2012 at 2:35pmObama is making plans to move to the Russia after he leaves office, and re-start the Soviet Union. It the same thing that his father tried to do with Kenya. Destroy America is the first part, then get another government to become communist.
After all, his book was entitled “Dreams From My Father”. Like father, like son.
Report Post »2smart
Posted on February 13, 2012 at 2:12pmSo, the Empty Suits says “our country does best when everyone gets a fair shot, does their fair share, and plays by the same rules.” Let’s see, the Government has applied this concept at the public schools, and the results are that the smarter and faster ones sit around waiting on the slower ones to catch up and deprives them of the education they could have. One example that tells the Eggplant in Chief that the world is not fair. And by trying to make everything fair you waste time, effort and money on a task that is basically unattainable. It’s time to ask yourself what you can do besides vote to get rid of this clown!
Report Post »ZeldaZick
Posted on February 13, 2012 at 2:03pmAccording to what I read on the “Zero Hedge” site this weekend, if Washington keeps spending at the same rate that they have been these past 3 years, by the election of 2016 we’ll have a national debt of $25 trillion, or 134% of GDP. Can you say economic collaspe?
Obumer’s budget is supposed to save 4 trillion by 2023. What a maroon!
Report Post »3monkeysmomma
Posted on February 13, 2012 at 4:32pmRon Paul’s ideas for dealing with our nations debt and reforming our monetary system are absolutely correct (as well as ending foreign aid).
Report Post »girlnurse
Posted on February 13, 2012 at 2:01pmhttp://www.reuters.com/article/2012/02/13/us-usa-budget-foreign-idUSTRE81C1C920120213
Report Post »So WHY are we giving BILLIONS to arab countries!!!??? WHY?!
You folks think Ron Paul is a nut because he wants to end ALL this foreign aid!?
This is RIDICULOUS!
ZeldaZick
Posted on February 13, 2012 at 2:11pmNo, we think Ron Paul is a nut case, because he is one.
Report Post »Hey, the good Dr. named his kid after Ayn Rand. Ayn Rand was a diagnosed NPD/BPD, drunk, drug addict, who slept around on her husband so much the poor guy drank himself to death. Wow! what a role model to name your son after, huh?
Ms. Rand often refered to her fellow men as “Insects”. Fact is, the person “John Galt” was modeled after was James Earl Hickman, a serial killer that Ms. Rand found perfect, for his lack of morals and emotion, while he cut up a 12 year girl in the 1920′s.
2smart
Posted on February 13, 2012 at 2:15pmNobody said he was a nut because he wants to end foreign aid, we said he was a nut because of his isolationist attitude. This Nation can’t just close itself off from the World and then expect to participate in it.
Report Post »girlnurse
Posted on February 13, 2012 at 2:22pmZELDAZICK: Get your facts straight fool.
Report Post »http://www.youtube.com/watch?v=oD-R_OeP6tU&feature=player_detailpage
girlnurse
Posted on February 13, 2012 at 2:27pm2SMART: What isolationist attitude are you referring to?
Report Post »He believes in free and fair trade.
I love the way dummies spout off sound bytes.
Please give me the facts that Ron Paul is an isolationist.
Other than the FACT that he wants to bring our troops home and stop “nation building”
all over the world and revisit ALL the foreign aid we hand out like candy when Americans here
at home are suffering without jobs and a terrible economy.
ZeldaZick
Posted on February 13, 2012 at 3:50pm@Girl Rn
Hey, you do have a computer don’t you, check my facts yourself! Oh, and please don’t direct me to the Rand Assc. in CA, those left overs from a 1960′s Cheech and Chong movie.
Paul named his child after Ayn Rand, a drug addicted Psych patient with a Borderline Personality Disorder! Boy, there is somebody I want to have control of our nuclear weapons.
Report Post »Go ahead drink the cool aid, if you want, just be careful it’s not laced with “a little something left over from the 1967 Summer of Love”.
ZeldaZick
Posted on February 13, 2012 at 5:30pmOh, so he just calls himself “Rand” and spouts Ayn Rand at every chance he gets doesn’t make him a nut huh? Are you really that stupid?
Report Post »drphil69
Posted on February 13, 2012 at 2:01pmObviously this “budget” will never pass… but can you imagine if it did?
$1.5 trillion in tax increases – that is about a 60% increase in taxes, and about 10% of the entire output of the nation (GDP). The result is obvious to anyone with a brain – mass layoffs, mass business closings, and the end of the American way of life… exactly the “transformation” Obummer wants!
BE PREPARED.
Report Post »HKS
Posted on February 13, 2012 at 2:00pmTalk about smoke and mirrors, massive tax increases, welfare increases, medicare and social security cuts,where is the outrage from AARP? Oh I forgot, Obama owns them to. Are the liberal peons really this dumb, can’t see the forest for the trees.
Report Post »3monkeysmomma
Posted on February 13, 2012 at 4:33pmIts hard to get a good look at the forest when you are hugging the trees.
Report Post »iac
Posted on February 13, 2012 at 1:59pmIs Oblamer still spending us to death to fix ‘Bush’s mess’ ( LOL ), or is he now trying to spend us out of his own overspending mess?
Report Post »Scarey thing is; what I said actually makes sense.,,,,,,help.
UBETHECHANGE
Posted on February 13, 2012 at 1:52pm2+2=5 Obamanomics This administration is an enemy of truth, freedom, liberty, prosperity, and the Constitution. Dems ideas are old, washed up, evil, and maniacal. Dems are the status quo and will protect it at all cost. They are all about power instead of doing the right thing for our Country. Maobama is a dictator to the core. ABO 2012!
Report Post »Rayblue
Posted on February 13, 2012 at 1:47pmObama knew that this corrupt piece of toilet paper would not pass. Since there has not been a budget for the duration, the main reason for deigning to rub Americas face in this pile of irresponsibility is to be able to say that his great, all encompassing budget was not passed by those who want the “rich” to continue their rape of the 99%.
Report Post »IMovedOn
Posted on February 13, 2012 at 1:43pmWhat do you suppose the printing of this behemouth cost?
Report Post »How many people really will leaf through this?
Why not put it online for free?
oldguy49
Posted on February 13, 2012 at 1:54pmyea , i tried to look up just how much it cost to print and could not find it anywhere…………………..r
Report Post »RougeFastFingers
Posted on February 13, 2012 at 1:43pmI can tell you one thing its not riddled with..fiscal responsibility.
Report Post »lukerw
Posted on February 13, 2012 at 1:43pmDid… Al Capone… kill people?
Report Post »cemerius
Posted on February 13, 2012 at 1:38pmBudget? Harry Reid says “we don’t need no stinking budgets”!! A budget would put constraints on thier spending sprees!!! Emelda Marcos shoe buying……..
Report Post »fammus1
Posted on February 13, 2012 at 1:37pmObama Budget Analysis: True Savings or Riddled with Gimmicks?
Report Post »Let me take a wild guess! Do we even need to analize these things anymore?
Stoic one
Posted on February 13, 2012 at 1:36pmThis male is insane.
Report Post »I.Gaspar
Posted on February 13, 2012 at 1:30pmLeo Gorcey could have written this for obama…NOTHING coming out of the white house is ever what it seems.
Report Post »Speaking of budgets….where IS that Senate budget due in 2009?
13th Imam
Posted on February 13, 2012 at 1:34pmyou’re giving away your age. Leo was the bees knees.
Report Post »I.Gaspar
Posted on February 13, 2012 at 1:37pm13th IMAM,
Report Post »My, uh…father…No, grandfather , told me who Leo Gorcey was.
Maybe I meant Professor Irwin Corey instead…
13th Imam
Posted on February 13, 2012 at 1:42pmThe Bowrey Boys were a staple of my early TV. Both Leo and the Prof, would have trouble understanding Barry’s doublespeak
Report Post »TheObamanation
Posted on February 13, 2012 at 1:28pmObama hasn’t had a budget while in office … why does he care what happens when he’ll be out ?
Report Post »