In February, President Obama released his 2013 Federal Budget proposal of $3.8 trillion. Last year he proposed a budget of $3.7 trillion, which was defeated 97 to 0 in the Democrat controlled U.S. Senate. Obviously Obama’s budget proposals have nothing to do with reality. They are pure campaign rhetoric. He characterized his 2013 budget as essential to American prosperity and one that “would make or break the middle class.”
President Obama did inherit a budget deficit of $1.3 trillion from President Bush’s last chaotic bailout and stimulus filled year in office—a budget that Obama voted for as a member of the U.S. Senate. Although Obama promised to cut Bush’s deficit in half by the end of his first term, only the rosiest of possible economic outcomes would allow him to have less than a $1.2 trillion dollar budget deficit in 2012. However, he promises another $ 4.0 trillion in budget reductions over the next ten years. At least $1.9 trillion of this reduction is in tax increases. His economic projections include growth rates averaging more than 4.0 percent from 2015 to 2018, equaled only under the pro-business Reagan Administration. This is despite the fact that the Office of Management and Budget has already reduced its growth projections from a ridiculously optimistic 3.6 percent to 2.0 percent for 2012 and is projecting the 2013 growth rate to be only 1.1 percent.
Obama is now pushing for passage of the “Buffett Rule.” This targets so-called millionaires—actually mostly small businesses filing individual returns—to make sure that no household with over a million dollars income in a year would ever pay less than 30 percent in taxes. This is because Warren Buffett, one of the world’s most successful investors pays a lower percent of overall taxes on his income than his highly paid secretary. What Obama and his fellow demagogues fail to reveal is that Buffett’s income is overwhelmingly from capital gains on his investments, with a maximum tax rate of 15 percent. Capital gains and earned income are treated differently in the U.S. tax code to encourage investment. The fact is that most of the people who would be subject to the minimum tax of 30 percent are the very people who generate most new jobs in the country. Obama would also raise the top rate for individuals and small businesses from 35 percent to 39.6 percent.
Obama’s budget also raises corporate tax rates from 35 percent to 39.6 percent. The U.S. already has the highest corporate tax rate in the world, and Canada has just lowered its corporate tax rate to 15 percent. Projecting that these job-killing tax increases on America’s primary job producers could result in 4.0 percent economic growth is beyond the realm of reason. It is unconscionably dishonest campaign rhetoric appealing to ignorance envy, and resentment.
Obama’s plan also calls for death taxes to rise from 35 percent 45 percent—another small business killer. Moreover, he plans to raise another $100 billion from taxes on energy companies—ultimately collected from energy consumers.
Most of Obama’s dishonest promises would not be passed even in a Democrat controlled Senate, but even the rhetoric is enough to strangle business investment. The proposed $500 billion cut in Medicare expenses is probably in the same category. It will never be done, but it is in the budget in some future year that will never really come. It is just a slick way of cutting a budget projection without any intent of cutting anything. Meanwhile, the Obama Administration and the Democrat held Senate are operating without any real budget restraints except the Federal Debt Ceiling, which—accompanied by deceitful scare tactics about cutting off the military payroll and social security checks—keeps being increased on an emergency basis.
Even including Obama’s phony budget cuts and $1.9 trillion in job-killing taxes, the U.S. debt will increase from the current $15 trillion to $21.7 trillion in 2022. However, if interest rates rise to the market levels of 2000 from their present Federal Reserve suppressed rates, we will see the national debt exceed $26 trillion in 2017—a mere five years away.
An even more serious concern is that speech after speech indicates that the President will say almost anything to win the election, and the vast majority of the mainstream media will ignore his outrageous stream of deception. Obama is also an extraordinarily adept chameleon. The color and tone of his rhetoric change dramatically with his audience. Many people say he is very likable personally, but I find it hard to like people who consistently deceive others about important things. Perhaps he is completely ignorant in economics, basic mathematics, and logic, but I fear that the biggest problem is that he has no regard for truth. He misleads and deceives eloquently but without conscience. A major theme of his election campaign will be class warfare—an appeal to ignorance, envy, and resentment.
According to a recent Newsweek poll, 72 percent of whites and 89 percent of blacks say the nation is divided along racial lines. Majorities on both sides of this racial polling think things are getting worse. Let the readers decide for themselves in the coming months whether the Obama reelection team is not stoking the flames of class warfare and racial sensitivities to obscure his abysmal policy failures and radical economic and social agendas.