Skip to comments.A Budget to Reject: Obama’s plan offers more of the same
Posted on 04/12/2013 6:49:54 AM PDT by SeekAndFind
The Obama administration has taken great pains to cultivate the impression in the media that the presidents 2014 budget plan is a genuine effort at compromise. According to the presidents team, if the GOP were to reject this offer, it would be a sure sign that Republicans were not interested in budget-cutting, or entitlement reform, or preventing a debt crisis because thats what the presidents 2014 budget would supposedly deliver.
The budgets numbers betray a far different reality. Consistent with Obamas prior budget submissions, this one embodies the presidents statist governing philosophy and his indifference to the urgent need for serious changes to the operations of the nations entitlement programs.
Starting with the big picture, the presidents budget would add nearly $7 trillion in new debt on top of the $6.6 trillion added since 2008. Debt would remain above 70 percent of GDP for the coming decade, and thats assuming the economy never fell back into recession.
The president has repeated over and over again the slogan that a budget plan needs to be balanced, by which he means the spending cuts must be matched with comparable tax hikes. His own budget fails this test miserably. The only deficit reduction in it comes from a net $1.1 trillion tax hike over ten years (on top of the $0.6 trillion tax hike in the fiscal-cliff deal and $1 trillion in Obamacare). There are zero net spending cuts in the budget. Zero. When the doc fix for Medicare physician fees and a smaller change in Pell Grant funding are removed, as they should be, from the administrations current-law baseline and placed instead with the other policy choices the budget reflects, the budget results in a net $10 billion spending increase over the coming decade.
The reason there is no net spending restraint in the budget is that, well, the president likes to spend taxpayers money. That is apparent from the laundry list of new initiatives he wants to launch. Theres an expanded-preschool proposal ($66 billion over ten years), new funding for teacher stabilization ($12 billion), various investments in special transportation efforts ($125 billion), and on and on. And of course the president wants to do away with the sequester ($900 billion) and the cuts in Medicare physician fees ($245 billion) without ever really acknowledging the costs of doing so.
Much has been made of the presidents supposed political courage in sticking his neck out on entitlements. This is absurd. In the budget, the president proposes to make a modest change in how inflation is measured, and this would modestly alter future Social Security cost-of-living adjustments as well as indexation of income-tax brackets. It is not remotely close to a serious reform. It is minor tinkering with the status quo.
On health care, the net spending reduction in Medicare and Medicaid is less than $150 billion over the coming decade when the doc fix is included in the numbers. And for the most part, the cuts that the budget does suggest in Medicare and Medicaid are of the kind that the GOP should reject. Most of the savings comes in the form of further tinkering with the byzantine payment regulations according to which Medicare pays hospitals, doctors, and other providers of medical services. These payment cuts, coming on top of the $700 billion in cuts in Obamacare, would do nothing to improve the efficiency with which care is delivered to patients. They would only reduce what the government paid to providers of health care, forcing either cost-shifting or reductions in the quality of care. Other cuts would import into the part of Medicare that is working best the drug benefit price controls that would drive premiums up for many seniors. And the structural reforms in Medicare that the administration is touting would produce only very modest budgetary savings over the next decade.
If there ever was going to be a grand bargain, the president needed to embrace entitlement reform of a kind that is anathema to the Democratic party namely, premium support for Medicare, as proposed by Representative Paul Ryan and others. That is the model that has the potential to transform Medicare and produce serious and beneficial changes throughout American health care. Instead of embracing such a reform, the president used his opposition to it to cement his reelection with demagogic political attacks. In the end, this tactic appears to have been ineffectual polls indicate that Governor Romney and Congressman Ryan more than held their own with voters on Medicare. The presidents attacks did, however, succeed in making a grand bargain nearly impossible to achieve.
What the president is offering now can be summed up this way: another massive tax hike in exchange for swapping the sequester cuts with more price controls in Medicare, the chained CPI, and other minor tinkering with mandatory spending programs. Total federal spending would not change. Some deal, huh? Congressional Republicans acceptance of it would be a political and economic disaster.
James C. Capretta is a senior fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.
To be fair, B. Hussein Obama, the junior Senator from Illinois, could not have become Arrogant, Incompetent, Tyrant B. Hussein Obama with abundant help from our sorry Congressional RINO Leaders, and a gullible Media.
Here is my two cents as an American concerned about the financial future of my Grandchildrens great, great, Grandchildren.
What the politicians call entitlements are actually Welfare TAXES on those still paying taxes.
Social Security Welfare tax, Medicare Welfare Tax, Medicaid Welfare Tax, and Obamacare Welfare Tax account for the majority of the Welfare Taxes paid by people who are TAXED ENOUGH ALREADY.
When the T.E.A. people finally stop thinking entitlements and start thinking Welfare Tax Burden they will finally realize that an entitlement is really an increase in their tax burden.
Here is a test of the true resolve of Americans who want to reduce BASELINE, year to year, Federal spending: Will a majority of Americans welcome a 5 % cut in redistribution check totals for Social Security payments to them, and any other Welfare Redistribution check that they can cash?
The larger question is: Will they rebel as they did in 2010?
In the meantime, our sorry US Congressional RINOs continue to say We cant cut spending to achieve prosperity.
Yup, WE cut spending to achieve OUR prosperity, but somehow you RINOs cant cut spending OUR taxpayer dollars and thus achieve prosperity for the entire United States of America?
Are you RINOs on the side of the Counterculture of Debt and Doom, otherwise known as OBAMANATION, or with us who balance our checkbooks every day!
Listen up, you Congressional RINOs, we ALL out here in Flyover Country are from Missouri, The Show ME State!
WHEN YOUR OUTGO EXCEEDS YOUR INCOME, YOUR UPKEEP WILL BE YOUR DOWNFALL. (Paul Harvey).
The primary Smoke and Mirrors (SAM) used by all Federal politicians and bureaucrats is to avoid using year to year actual spending to define a spending increase or decrease.
They use a reduction in the rate of estimated increase in year to year spending as a definition for either an investment or a cut, respectively.
Why Investors Business Daily, and other Financial News Firms do not correct this SAM thought error in their printed and spoken word raises the question of collusion, perpetuation of an obvious fraud, or both.
The second SAM is the time frame used in the spending or burn rate of taxpayer dollars.
Federal politicians and bureaucrats all use the Commie Ten Year Plan time frame when reporting the total dollars increased or decreased for their various spending plans.
This 10 year time period is used primarily because the estimated changes on a yearly basis are very small, and multiplying by 10 tricks the gullible financial media into believing that the estimated changes will be large.
For example, at the present Federal burn rate of 10 billion dollars a day, the total burn rate per year is 365.25 days per year X 10 billion dollars per day = 3,652.5 billion, (=3.6525 Trillion), dollars spent or burned per year.
Using the Commie 10 Year Plan method of reporting that comes to 3,625.5 billion dollars burned per year X 10 years = 36,255 billion dollars burned in 10 years or, 36.255 Trillion dollars burned.
Working backwards, a reduction in total spending of 1,000 billion, (= 1 Trillion), dollars over the entire 10 year time period would be 1,000 billion dollars not burned per 10 years divided by 10 years = 100 billion dollars not burned per year.
100 billion dollars not burned per year divided by 365.25 days per year = 0.273785+ billion, (=273,785 + million) dollars not burned per day for every 1 Trillion dollars not burned over 10 years.
IF the present Federal burn rate were to be held constant at 10 billion taxpayer dollars a day for ten years, AND 1 Trillion dollars were to be not burned over 10 years, THEN that would amount to a true reduction in the total burn rate of 0.027385+ %, far less than the rate of increase in the inflation of a modest 2 %, as decreed by the Federal Reserve.
The reality is that the US Federal Burn rate of taxpayer dollars has increased every year on a year to year basis from LBJs addition of the Welfare Tax Burden of Medicare to the present.
The third Smoke and Mirrors is that all spending plans, including the Ryan Budget, have NO decrease in the total, year to year Federal dollars spent per year.
Hence, when summing up these three Smoke and Mirrors used by both political parties, the total National Debt will continue to increase, the credit rating of the US Federal Government will continue to be downgraded, and default by the US Federal Government is guaranteed.
In summary, all would not return to normal if Obama were Impeached and removed from Office this year for being a Coward during the Benghazi Massacre.
What we have here is a Welfare System that we have repeatedly voted to continue.
We chose this Counterculture of Debt and Doom, from FDR to Obama.
It is a sad testimonial to hear our Congressional Leaders still saying that they really do want to work with Obama, the man who has said that he wants to FUNDAMENTALLY CHANGE AMERICA.
As long as The Federal Eagle keeps flying over our mailboxes, Obamas popularity will stay about that magic 40 %, the same % that do not pay ANY personal Federal Income taxes.
It is all about the money, OUR money!