OPINION:
President Obama pitched the American people Monday on what he would do with the economy in a second term. His latest annual budget promises bigger government, higher taxes and much higher debt. No Republicans, and likely few Democrats, will want to buy what he’s selling.
Once again, Mr. Obama ignores the debt crushing this country. By the end of his first term, he will have added $6.4 trillion to the national debt - a 60 percent increase. Within 10 years, the national debt will stand at $25.9 trillion. This is simply unsustainable, and the longer this president is in office, the closer we are to bankruptcy.
Mr. Obama repeatedly referred to $4 trillion in “deficit reduction” in remarks Monday. By this he meant reductions in planned increases in spending. In reality, his budget hikes outlays year-after-year from $3.8 trillion now to $5.8 trillion in 2022.
Specifically, he hopes to blow $350 billion on additional stimulus spending to supposedly spur job growth. He wants hundreds of billions for things like bike paths, trolleys, high-speed trains, and research and development for “green” energy. To cover the massive price tag, Mr. Obama proposes we raise taxes and every single year we borrow between $610 billion and $1.3 trillion. There’s no “reduction.”
Small businesses will see their tax rate jump from 35 percent to 39.6 percent. He also raises taxes on oil and gas companies, which fits nicely with his agenda of punishing people at the pump for using the internal combustion engine.
Mr. Obama will also punish people who invest in this struggling economy by raising taxes on investment income. He will change the tax code so profits from dividends are taxed at ordinary income rates. As a result at the end of this year, investors will go from paying 15 percent on money earned from investing in a company to up to 43.4 percent. Uncle Sam will also take a bigger bite from capital gains, up from 15 percent to 23.8 percent next year.
Gimmicks galore make it seem the president’s numbers fit previously agreed-to spending caps. Once again, he cites $1 trillion in “savings” from winding down the wars in Iraq and Afghanistan, even though this is imaginary money. It’s like saying you can spend more on a vacation because you saved money from not borrowing for a new car. He also double counts $1 trillion already cut by last summer’s budget deal so he can spend it on new government programs.
The worst aspect of Mr. Obama’s plan is that it ignores the entitlement funding crisis. The president could raise taxes to 100 percent for business and “the wealthy,” and that still wouldn’t be enough to cover Medicare’s massive red ink, the biggest driver of our debt. Nor does he deal with how to stop the program from going bankrupt in eight years.
The president once promised he would slash the deficit by half by the end of his first term. So far, he’s off by $680 billion. This economic blueprint should be a warning to the voting public about what will happen should Mr. Obama be handed a second term. We’d see more spending, borrowing, taxes and debt. Let’s hope Americans prefer a more positive vision of our future.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.
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