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  • Obama’s “Lucy Move the Football” Fiscal Cliff Plan Still Not Balanced

    Volleys of negotiating counter-offers are coming in faster now that Christmas break and the looming fiscal cliff are just around the corner.

    While there is much unsatisfactory with Speaker of the House John Boehner’s (R–OH) Sunday night proposal, let us not forget that the reason we are watching this needless, high stakes drama unfold is due to President Obama’s intractable insistence on tax increases on America’s high earners. After all, he and Congress could simply and quickly pass a bill to extend all current policies and avoid the fiscal cliff entirely—if he wanted to. No, this is really about hiking taxes on high earners. Thus the charade of deficit reduction continues.

    Obama’s latest counteroffer is no more acceptable than his first offer. Short on details concerning actual spending reductions, especially on entitlements, it is replete with his requisite tax hikes and (we are shocked) new stimulus spending. The cherry on top is an extension of the debt limit for two years, essentially handing over authority to raise it to the President.

    Right.

    The President originally called for around $800 billion in tax hikes on America’s “highest” earners—those earning $250,000 and up. A ridiculous demand when the economy is still struggling under his big spending and regulatory policies, and one which would squarely hit smaller businesses. You know, the ones who actually create jobs.

    Yet, just like Lucy and the football, when Boehner and company offered up $800 billion in tax hikes, Obama quickly doubled his demand to $1.5 trillion in tax hikes—again, all from the highest earners. They, he tells us, can afford to pay a little more. Never mind, of course, that the top 1 percent of earners already pay 37 percent of all income taxes. Somehow we are to believe this is a “balanced approach.”

    Obama pitches all this on the pretext that we can simply go back to the tax rates we had under Clinton. Wrong! His dirty little tax secret is that he has already hiked taxes on high earners under Obamacare. First the law added a surtax of 0.9 percent in addition to the Medicare payroll tax on those earning over $250,000. For the first time ever, Obamacare will apply this higher rate of 3.8 percent to investment income on January 1. Obama won’t tell you that going back to Clinton-era tax rates will actually result in higher taxes on wages, dividends, and capital gains.

    They say if you want less of something, then tax it. For Obama, this works fine on financial transactions, carbon emissions, driving, and junk food. But evidently, for him, not so much on a strong vibrant economy. And those Clinton boom years? They weren’t ushered in after the Clinton tax hikeonly after the Clinton–Gingrich tax cut!

    Rather than working with Republicans on tax proposals that will actually grow the economy, Obama is now simply fighting over his definition of “high income” while we are left to wonder how much this $1.2 trillion tax hike will slow the economy.

    As for the $1.2 trillion spending reductions, the only reason they are there is because Boehner insisted on them. But $100 billion in cuts would whack the defense budget, which is already reeling from earlier budget cuts. Yet the real spending and debt crisis comes from unaffordable entitlement programs. While Obama is insisting on balance on the tax side, he is sorely lacking in leadership here. As a recent Washington Post editorial opined:

    Elections do have consequences, and Mr. Obama ran on a clear platform of increasing taxes on the wealthy. But he was clear on something else, too: Deficit reduction must be “balanced,” including spending cuts as well as tax increases. Since 60 percent of the federal budget goes to entitlement programs such as Medicare, Medicaid and Social Security, there’s no way to achieve balance without slowing the rate of increase of those programs.

    We know Obama is open to changing the inflation calculation and slowing the benefit growth in Social Security. But what else? What about the proposals in his own budget, which would increase premiums on Medicare? He could easily broaden his proposals with additional uncontroversial steps to begin the process of strengthening and reining in Social Security and Medicare. All he needs to do is lead.

    Some polls may show that Americans think taxes should be part of a deficit deal; but what the polls do not always show is their utter distrust that Washington would use new revenues to actually reduce the deficit. Here, Obama does not let them down. He reportedly wants $80 billion in new spending on infrastructure and unemployment benefits.

    In exchange for all of this, he wants to raise the debt limit by enough to fuel his big spending goals for two years. This is utterly unacceptable. Americans know you cannot reduce the deficit when you plan to actually spend more. Americans also know that when Washington lifts the debt limit, it will not control spending. The debt limit puts the very pressure lawmakers need to account for out-of-control spending and make vital course corrections to bring spending under control, lest we face a Euro-style debt crisis in the future.

    White House Press Secretary Jay Carney is actually insisting that “[t]he President’s proposal is the only proposal we have seen that achieves the balance that is so necessary.” Balance, evidently, is in the eyes of the beholder. As the Post noted, 60 percent of the budget stems from entitlements.

    In just 13 short years—by the time today’s kindergarteners enter college—entitlements and interest on the debt will eat up all tax revenues. A truly balanced approach must start where the problem starts—with substantive reforms to entitlements. While the President maintains that you cannot cut your way to prosperity, you certainly cannot tax your way there.

    Posted in Ongoing Priorities [slideshow_deploy]

    9 Responses to Obama’s “Lucy Move the Football” Fiscal Cliff Plan Still Not Balanced

    1. john davidw says:

      umm this would include real taxes to real people, i thought that's what taxes are for all Americans

    2. @Snuffy_Joe says:

      WHERE ARE THE SPENDING CUTS? I have absolutely NO CONFIDENCE in Boehner's ability to negotiate these issues. He has yet to tell the people what kinds of CUTS he has put on the table. He needs to get out and tell the people what he has proposed and what the result was for each proposal. HE HAS NOT DONE THAT YET.

      Please provide a DETAILED list of proposed cuts, along with how much $ it would save the tax payers each year. Also identify what argument Obama and the Socialists have countered with.

      Boehner needs to leave his white flags at home. We the people are getting tired of RINO BS.

    3. Brian says:

      Of course if President Obama is at fault for not giving the Republicans what they want, then likewise the reverse is also true and the Republicans are at fault for not giving Obama what he wants.

      Where, oh where is Gary Johnson when you need him???

    4. toledofan says:

      Great article and it's just amazing how simple it would be to fix the problem. Obviously, if Obama weren't re-elected, everyone would be singing a different tune, but, he was and it's becoming very evident he doesn't want a deal, he cares little, if at all, about the country or the Constitution and he is just going to spend us into obvilion no matter who or what tries to stand in his way. It's almost surreal to think that this blantant disregard for the future would even be considered but it is and it's up to the Republicans, at least for now, to stand firm. Maaybe it's time for someone to tell Boehner to stop negotiating with himself and just let the chips fall where they may.

    5. Jim says:

      Boehner needs only to reiterate to President Obama that he has given the president more offers than necessary. All should now be removed from the playing field and let the president make an offer that ends his call for new spending. Make that offer and Boehner can then offer up a new proposal to cut all entitlements immediately 20% with further cuts to be discussed after the holiday recess. Boehner needs to address the Alinskyite president the same way he addresses the citizenry and the nation. Balls in your court Mr. President and leave it at that.

    6. Gitfiddle says:

      Since Republicans could not win a race for dog catcher right now they ought to let Obama go over the cliff and stop worrying about it. It is bound to happen (and Obama set it up .. it is his baby) and Obama is wearing the Dudley Doo-Right hat (he won the job) .. so let him do it. Let him sink of swim. (Us? well you know a majority of us voted for Obama didn't we? So we have it coming. He was not an unknown after 4 years on bungling and mess.. and yet the majority wanted him .. and THEY GOT him. So they own it.. the cliff, the health care, the dollar problems, the bail out, the guns sold to Mexico, the border, the moslem spring … hey .. let them get a good dose of it. Like a dog who chases fur (hang on around his neck)

    7. MichMike says:

      While domestic programs can be analyzed relatively easily, no taxpayers can understand what is enough military. It creates a blind faith strategy that the politicians and an enormous bureaucracy are performing anywhere close to optimum in their mission of defense of the country. Significant waste is reported regularly from an organization that has at its core a very defined chain of command. More than 95% of today's first year officers will be gone in 20 years. Their commanding officers have varying years of service, but will also not be around after 20 years of service. The can be court martialed if the bus to pick up the guys from the artillery range fails to be there. They will follow rules. Maybe Heritage could provide some information about the following:

    8. MichMike says:

      Dollar amounts that could be saved if directed from the top just for the day to day waste
      Dollar amounts that could be saved by a 5% improvement in costly mistakes in acquisition
      Dollar amounts that could be saved by a 5% reduction in supplier margins
      Dollar amounts that could be saved by a 5% reduction in the more than 700 permanent bases
      Cost of fully implementing critical weapons systems vs. the weapons and equipment purchased that clearly is not required (a much more subjective subject)
      Identifying how much of the budget, if any, reflects our current combat operations in Afghanistan
      Providing information about troop levels that are forward deployed
      The problem with our spending is not the military, it is all the other spending.
      The problem can still be pretty painlessly resolved, more difficult each passing month.
      Could our military LEAD on this subject and save the money that is not contributing to our defense (or even our allies) and still get the job done? They truly are the best and brightest, I know several of them.

    9. HoyPaloy says:

      Going over a so called 'fiscal cliff' is probably no worse than anything else the government is going to do. It's a terrorism mind game. Let the whole thing fall on Obama and his communist regime.

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