President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on business and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.
In addition to tackling a deficit swollen by the $787 billion stimulus package and other efforts to ease the nation’s economic crisis, the budget blueprint will press aggressively for progress on the domestic agenda Obama outlined during the presidential campaign. This would include key changes to environmental policies and a major expansion of health coverage that Obama hopes to enact later this year.
A summary of Obama’s budget request for the fiscal year that begins in October will be delivered to Congress on Thursday, with the complete, multi-hundred-page document to follow in April. But Obama plans to unveil his goals for scaling back record deficits and rebuilding the nation’s costly and inefficient health care system Monday, when he addresses more than 100 lawmakers and budget experts at a White House summit on restoring “fiscal responsibility” to Washington.
remember, it is not possible to filibuster the budget process so this plan from Obama is pretty much a foregone conclusion. I think though that the Democrats will lose the House in 2010 over it, much like they did in 1994.
Fiscal restraint is good, but how does this square with the stimulus just passed? Are they not taking away what they just passed? I am going to give you a tax cut, but tomorrow I am going to take it back? How does this sort of whipsaw help the economy in long term planning?
Wow, we’re going to have the deficit below $700 billion in four years?
Sure, but since he’s going after the people who create the jobs, you know, let’s tax the crap out of small business owners, unemployment will shoot upward. More people for the feds to care for. Sounds like a plan …
From Instapundit, a commenter’s experience with her congressman:
Let’sreview some relevant history regarding cuts in the Defense Department budget.
Back in the 1990s, during the Clinton Administration, Clinton and the Democrats decided that the collapse of the former Soviet Union provided an excellent opportunity to slash defense spending and to boost ‘give-away’ federal social programs.
One significant result was that those types of forces needed following 9-11 were significantly reduced or done away with entirely. These included the Army’s light infantry forces. I remember meeting one career Army major in 1998 who told me that he had taken an early retirement because he was a light infantry specialist and that after the budget cuts there was no career for his specialty.
Well folks. The kind of war that we have been fighting in Afghanistan and after the initial invasion of Iraq has been a light infantry war. And how have we been fighting this war? By using sailors from the Navy as in-theatre augmentees on the ground in Iraq and by calling up the Reserves and the National Guard. The fact that we have been using Reserve and National Guard troops can be laid squarely on the shoulders of Clinton and the Democrats in Congress. A lot of weak-kneed Republicans woorying about their personal careers went ‘along with the flow.’
Now, we are facing massive world instability from which can and very likely will pose very very real threats to our national security. Threats that can only be held in check by a plausible U.S. military capability that hopefully deter war and which will defend us in times of crisis.
And what do our current Democrat president and our Democrat-controlled Congrss want to do?
Cut defense spending so that they can launch massive give-away social programs while ostensibly trying to reduce the national debt.
These actions by the Democrats will definitely put our nation and our servicemen in ‘harm’s way’ in a manner that may make the last eight years look like child’s play.
I am dizzy! One week ago signing the largest spending bill in history giving money to people who don’t pay taxes and calling it “tax cuts”, and purposing another monster spending bill for mortgage bail outs and increasing troop levels and military efforts in Afganistan. This week it is major health care reform with more coverage for more people, increase in environmental efforts, repeal tax cuts, with a tax the “rich” and cut the military to pay for the cost . WOW! I guess this is rapid change, I am not sure I can believe in it!
The vast foolishness of the Federal Government confirms my theory that the public schools have failed the vast majority of children. Over half of the electorate either wanted what we have or else were too philosophically blind to see it comming and voted for that which they did not know.
These are very sad, no-gloat days. So many people will suffer.
Don
[blockquote]He told me that he thought tax rates should go up for the very rich and that the top marginal tax rate should be 90%.[/blockquote]If it goes that high then people will just work less. Sounds like a plan to destimulate the very people who are capable of creating jobs.
Herbert Hoover, progressive Republican: Trade barriers, higher taxes. FDR, progressive Democrat: huge government spending programs in addition. Obama: both, combined. Result? Hoover/FDR: the Great Depression. Obama: let’s hope for better, but he’s got the wrong prescriptions.
I recall the heady days of 1958-59 in Cuba, when Castro and the rebels thre out Batista and all of Cuba (except for a few very, very astute people) were excited and thrilled about the future of their country. And then – – a few months later, Castro announced, publicly, “I am a Marxist.” And the air went out of the balloon for Cuba. Today, as Rick Santelli said on CNBC, “They are driving ’54 Chevies down there. . . .”
Stand by for some kind of announcement in the next few months in the USA, folks. I wouldn’t presume to predict exactly what it will be, but in the end, the air will go out of the balloon here, as well. And if we didn’t see this coming a year and a half ago – – it is because we weren’t paying attention.
Obama’s doing some smart things.
First, he recognizes that wars are expensive. Somebody has to pay for them. If people don’t want high taxes, then they should probably not want wars.
Second, he’s going to close some neat little loopholes. He’ll also enforce the tax laws by hiring staff who will go after people who cheat on their taxes.
Chances are some accountability in the defense department might save a lot of money. in 2003, the DOD couldn’t account for $1 trillion dollars. People who demand accountability, alas, are called “unpatriotic.” Plainly, the easiest place to correct for waste, fraud and government largesse isn’t in the hands of those who are on welfare, but by other forces, who don’t need to worry about any degree of oversight.
Cut military waste; end loopholes; punish tax cheats; end the war on drugs. And then a more balanced budget.
The previous president? 1.7 trillion dollars of a deficit. And no stimulus package.
[blockquote] While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year.[/blockquote]
Are we agreed that $250K per family means that you are rich?
[blockquote]He’ll also enforce the tax laws by hiring staff who will go after people who cheat on their taxes. [/blockquote]
That’s comical. He hired a Treasury Secretary who cheated on his taxes, and tried to hire Daschle, ditto.
Punish tax cheats? Need to start with the Secretary of the Treasury.
However, if we want to cut unnecessary spending we can start with the public monies that go to NPR.
The previous president left us a 1.7 trillion dollar deficit? Where in the world did you hallucinate that, John? That 1.7 trillion of yours is all because of Barry:
http://www.realclearmarkets.com/articles/2009/02/the_market_is_shorting_obamas.html
[blockquote]The previous president left us a 1.7 trillion dollar deficit? Where in the world did you hallucinate that, John? [/blockquote]
The same place he dreamt up that $2.7 trillion price tag for Iraq (it’s closer to $1 trillion, not that that’s a small amount of money).
John Wilkins, you have got to be joking! As already said by other, Tim Geithner, Tom Daschle, etc. Please!
#14, 15 and #19 assume that these mistakes are institutional policy. It’s uses the logic of ad hominem and assumes anecdotal evidence is what matters. What matters is if the IRS hires people to find tax cheats.
Well, it looks as if they’re doing something.
http://www.irishtimes.com/newspaper/finance/2009/0221/1224241590690.html
Christopher, I’m sorry. It’s 2.7 Trillion.
http://www.nytimes.com/2009/02/20/us/politics/20budget.html
John, As I quickly read the NYT article it seems that changes in the book keeping patctices of Presient Obama increases the PROJECTED deficit over the next DECADE, that is not Bush’s deficit.
Sorry, that should read practices.
Christopher: yes, the markets might be saying that the stimulus is too small – kind of like not investing enough in a start-up company. the market could also be sinking because …. we’re really in a recession and the news has generally not looked good. Add Alcoa; tension in the middle east; gas prices in Russia.
Besides its market short term thinking that got us into this mess.
RE: Taxes:
Harry Reid says taxes in America are paid on a voluntary basis. Remember this conversation on April 15th:
[blockquote][b]Jan Helfeld[/b]: …if the government is in the business of forcefully taking money from some people in order to provide welfare benefits to others, how will the people whose money is being taken feel about the government?
[b]Harry Reid[/b]: Well, I don’t accept your phraseology. I don’t think we “force†people…
[b]Helfeld[/b]: Taxation is not forceful?
[b]Reid[/b]: Well, no.
[b]Helfeld[/b]: It’s voluntary?
[b]Reid[/b]: In fact, quite to the contrary. Our system of government is a voluntary tax system.
[b]Helfeld[/b]: Oh… if you don’t want to pay your taxes, you don’t have to?
[b]Reid[/b]: Of course you have to pay your taxes, but…
[b]Helfeld[/b]: The government will force you to pay, or they’ll fine you or imprison you. Won’t they?
[b]Reid[/b]: We have a voluntary system. The fact of the matter is, that if when you pay your taxes — you see, in many other countries, it’s not voluntary. For example, in many countries, the government makes sure that your employer takes out every penny. Many countries don’t file income tax returns. Why?
[b]Helfeld[/b]: We have withholding here too, don’t we?
[b]Reid[/b]: Pardon me?
[b]Helfeld[/b]: Withholding.
[b]Reid[/b]: With some program, yes. But I’m talking about in some countries, European countries as an example, there… you don’t file an income tax return. There is no need to, because your employer takes all the money out. That’s the difference between a voluntary and an involuntary system.
[b]Helfeld[/b]: But can…? Can…?
[b]Reid[/b]: You can choose to not pay your taxes, but I don’t accept your phraseology, that you forcibly take money from somebody else and give it to others. You know, that’s the way it is on any program. I mean…
[b]Helfeld[/b]: Can the taxpayer…?
[b]Reid[/b]: …highway program is the same. We…
[b]Helfeld[/b]: Excuse me.
[b]Reid[/b]: We take money, we “forcibly†take money in your phraseology, but…
[b]Helfeld[/b]: But can…? Let me ask you something.
[b]Reid[/b]: …build highways with it, put people in the Army.
[b]Helfeld[/b]: Can the taxpayer decide not to pay his taxes if he wants?
Reid: He can… He can not pay his taxes if he wants.
[b]Helfeld[/b]: What will be the…? What will happen?
[b]Reid[/b]: He’ll be subject to civil and criminal penalties.
[b]Helfeld[/b]: They’ll put him in jail — they’ll use force against him. He pays… everybody pays taxes under threat of jail or fines: on the threat of force. In other words, you are forced to pay your taxes. Whether you fill out your form voluntarily or whether its withheld by your employer, you don’t have a choice on whether you can pay taxes that are going to be used for welfare programs — you can’t make that choice.
[b]Reid[/b]: Well, but the reason our system is called a voluntary tax system — and I recognize, you know, that ultimately you can’t cheat your taxes, but our… We have many provisions in the law they don’t have in most countries: we have deductibility for home interest on mortgage payment, they don’t have that in most countries, we have deductibility for certain excessive expenses as relates to health — doctors, hospitals — we have all kinds of tax — some people call them “loopholes†but others would call them “incentives for people to do business†— and that’s why… You know, you’re not “forced†to pay certain taxes. There are ways… if you decide to buy a home and…
[b]Helfeld[/b]: You can decide not to pay taxes? In the United States?
[b]Reid[/b]: I mean, I really don’t understand what you’re trying to get at. If you’re… What… the point of the matter is…
[b]Helfeld[/b]: Because you objected to my phraseology. You said that… you say that the government isn’t forcefully taking money from some people to provide welfare benefits to others, and, in fact, that’s what it’s doing, because all taxation is forceful. It’s backed up by physical force. If you don’t pay your taxes, the government will intervene with you forcefully. So you don’t have a choice. It’s not voluntary. You can’t decide not to pay and not suffer consequences. If you don’t pay, you’ll go to jail. So: you’re forced to pay.
[b]Reid[/b]: You don’t… you don’t go to jail. Some people go to jail. There are all kind of civil penalties if you don’t pay your taxes: you pay interest and you pay penalties. The fact of the matter is, our system is a voluntary system.[/blockquote]
Or listen to him yourself:
http://www.youtube.com/watch?v=R7mRSI8yWwg
Let the natural economic forces, at work within our country at this time, take their toll without bankrupting the American people by expending huge quantities of money that will cause inflation and stagflation and which will not solve our basic economic problems.
Massive increases in taxation driven by populist demagogery are economically counter-intuitive and are an extremely overt expression of ‘class warfare.’ Of course, class warfare is exactly what most left-wing politicians want for our country.
Our markets will rebound as the poor practices and poorly thought out political policies of the past 25 years fall by the wayside and as the American people who ‘work’ for a living learn from their mistakes.
The impractical and ideologically driven political decisions of the Clinton administration and the Deomcrats in Congress will be discredited and Americans will again prove that that they are adaptible, industrious, inventive and extremely practical people.
On ther matter of defense cuts, if we fail to sufficiently and adequately “provide for the natioanal defense,” we, the American people may put ouselves in a national security posture in the world which will endanger our democracy and and as a result of which we may have to shed much American blood in order to once again be able to deter our enemies from harming us.
Of course, the left-wing politicos won’t care that much about ‘shed American blood’ since those voting for the left-wing politicos generally come from the blue state/blue county regions of the country and the majority of our armed forces are composed of red state/red county volunteers who love our country enough to risk their lives for it.
What does bother the left-wing politicos is what they see as the diversion of money from give-away social programs when money is appropriated by Congress for the Defense Department.
[blockquote]yes, the markets might be saying that the stimulus is too small[/blockquote]
No, JW, the markets are not down because they think Democrats aren’t spending enough money. Markets generally look ahead, and prices reflect the collective opinion of investors as to business conditions in upcoming quarters. The collective opinion of investors, as reflected in the markets, since Obama’s election has been that things are going to get worse, and after each announcement and piece of legislation, the markets have continued their downward way. At the very least, we can say that investors believe the Obama initiatives are generally not helpful.
And if the Geithner, Daschle, Richardson appointments are “mistakes,” not indicative of an opinion about tax honesty, then this makes the administration look rather naive and not too competent. And Geithner is still Treasury Secretary, and Rahm Emanuel, who also has tax problems, is still Chief of Staff. The situation does not inspire trust.
24, what incredable double talk. All taxation is enforced exaction of money. The simple fact is that if you fail to pay your taxes the government will bring the full force of the state to bear to collect those taxes. This is about as voluntary as conscription.
libraryjim, I can’t watch YouTube here. Who is the interviewer, and what’s the date on that ridiculous conversation with Sen. Reid? That’s so foolish it almost makes one think it has to be an impostor, but sadly, I suppose it’s not.
It was from April 2008, I believe. The interviewer was [url=http://janhelfeld.com/video/]Jan Helfeld[/url] from “The Bottom Line”.
Thanks, libraryjim. Who is this Helfeld and how are the interview subjects persuaded to agree to talk? Is this from some public TV station, independent, what? Does anyone know? I never heard of “The Bottom Line” before.
Katherine, if the markets were prescient, would the current financial disaster have happened? That’s ridiculous. they might not be confident, but we have no reason to trust the Dow.
My cousin, who runs a pretty big bank, noted that the damage to the economy was so severe that the markets will deteriorate, regardless of what Obama does, unless it helps people make foreclosure payments. The markets aren’t judging Obama. They’re judging the problem: the money we’ve been using to spend over the last eight years has been imaginary.
Of course you can believe whatever you want to, John Wilkins. I’ll go with the 300 economists who thought the “stimulus” bill was a bad idea. I expect they’ll also disapprove of more spending increases with this budget plan. If we’re lucky, we’ll have an anemic recovery and inflation. If we’re not, worse.
The money spent over the last eight years was “imaginary,” but this spending spree isn’t imaginary? We got into this mess with too much spending, so more spending will fix it? Oooookay.
#32, the money spent in the last 16 years or more was “imaginary” in CA, NV, AZ, and FL, as people took out more and more mortgages on their homes, as their homes supposedly increased in value, due to rising home prices, until that bubble burst. Funny thing, similar thing happened in TX several years ago when the oil industry took a dive, and those folks got through the bad times without a bailout from the gov’t. And if you think the money spent the “last eight years” wwas imaginary, what in the world do you think the money in the stimulus plan and the housing bailout plan and the bank bailout plan are – that’s not even imaginary; we know in reality that money isn’t there – it’s yet to be printed. But once it is printed, inflation will run rampant, and that will be just the thing for the “middle class” that the Obama Admin wants to help so much. The basic economics of this situation is so scary that one truly wonders if anyone in D.C. has any concern other than their own political power. Certainly the “blue state” side of the aisle does not.
#34,
Welcome to Jimmy Carter’s second term, only worse.
#35, the situation looks eerily similar, doesn’t it – cut defense spending, raise taxes, increase social engineering spending. (And we had trouble with Iran back then, too, anecdotally, due to Carter and his teams naivete and inexperience).
#33 – Cato has a list of about 300 economists who oppose the stimulus package. however, there are nearly 400 economists who supported a stimulus package in November. Many of those economists think that the current one is inadequate, and that it should be greater.
http://www.cepr.net/index.php/publications/reports/economists-letter-to-congress-in-support-of-a-new-economic-stimulus-package/