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Obama plans to cut deficit by $1.1 trillion

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mises

Joined: 05 Nov 2007
Location: retired

Posted: Sun Feb 13, 2011 10:05 am Post subject: Obama plans to cut deficit by $1.1 trillion

...over ten years.

http://www.reuters.com/article/2011/02/13/us-usa-budget-obama-idUSTRE71B1QU20110213

Quote:

WASHINGTON (Reuters) - President Barack Obama's proposed budget for fiscal 2012 will seek to cut the record federal deficit by $1.1 trillion over the next 10 years, White House budget director Jack Lew said on Sunday.

Lew, speaking on CNN, said the president was also on track to halve the budget deficit by the end of his first term in office, which goes through 2012.

But Republicans, who control the House of Representatives, said the spending cuts in the president's budget to be released on Monday were not enough.

"We are reducing programs that are important programs that we care about, and we're doing what every family does when it sits around its kitchen table: we're making the choices about what do we need for the future," Lew said.

"We have a responsible budget that will cut in half the deficit by the end of the president's first term."

The White House sees the budget as a starting point for a debate on spending and reducing the deficit, forecast to reach $1.48 trillion this fiscal year, or 9.8 percent of U.S. GDP. This would be down from 10.0 percent of GDP in 2010, but still very high for the United States on a historical basis.

The 2012 fiscal year begins on October 1.

The White House intends to get two-thirds of the $1.1 trillion in savings from spending cuts and one-third from tax revenues, including by closing several tax loopholes, according to sources familiar with the budget.

That figure is higher than the $400 billion in savings that Obama promised in his State of the Union address in a five-year spending freeze on non-discretionary domestic spending.

"The challenge we have is to live within our means but also invest in the future," Lew said, adding "tough tradeoffs" would have to be made to achieve that goal.

"There are scores of programs that are being reduced, and I think it's important to note that we're beyond the easy, low-hanging fruit."

Republicans were not impressed.

"He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House of Representatives Speaker John Boehner said on NBC's "Meet the Press."

Democrats and Republicans in Congress have clashed over how far to go with spending cuts to trim the deficit. Obama argues that some spending increases are necessary to make the U.S. economy more competitive. Republicans are pushing for deeper cuts and oppose any tax hikes.

A Democratic aide said the budget would reduce Pentagon spending by $78 billion over five years.

Pentagon cuts would include the C-17 aircraft, the alternate engine to the Joint Strike Fighter and the Marine Expeditionary Vehicle that the Defense Department says it does not need.

78b from the Pentagon over 5 years is a start, I guess.

Kuros

Joined: 27 Apr 2004

Posted: Sun Feb 13, 2011 11:21 am Post subject: Re: Obama plans to cut deficit by $1.1 trillion

mises wrote:

78b from the Pentagon over 5 years is a start, I guess.

This is incredibly disappointing but rather typical of Obama's weak Presidency.

That $78 billion over 5 years figure sounded familiar so I Googled it. Yup. That was Robert Gates' announcement from a year ago.

Quote:

The plan calls for $553 billion to be spent in 2012 on annual defense programs such as weapons modernization and troop pay. The amount, which does not include war spending, is $13 billion less than the Pentagon wanted, but still represents 3 percent growth after inflation.

But the rate of increase of spending would gradually slow before halting in 2015 and 2016. The only increase in those budgets would reflect the inflation rate. Gates estimates doing this would cost the military about $78 billion.

So any and all credit for the defense cuts should go straight to Gates. Not since Kennedy have we had a Democratic President with such a hard on for military spending.

Kuros

Joined: 27 Apr 2004

Posted: Sun Feb 13, 2011 6:51 pm Post subject:

Republicans say Obama's Budget Cuts don't go far enough

(what did you think they were going to say?)

Quote:

Jacob Lew, the president's budget director, said Sunday that the new spending plan for the 2012 would disprove the notion that "we can do this painlessly ... we are going to make tough choices."

Republicans rejected that appraisal, castigating Obama for proposals that will boost spending in such areas as education, public works and research, and charging that Obama's cuts are not deep enough.

They vowed to push ahead with their own plans to trim $61 billion in spending from the seven months left in the current budget year and then squeeze Obama's 2012 budget plan for billions of dollars in additional savings in response to voters alarmed at an unprecedented flood of red ink.

"He's going to present a budget tomorrow that will continue to destroy jobs by spending too much, borrowing too much and taxing too much," House Speaker John Boehner said on NBC's "Meet the Press." Boehner released a statement from 150 economists calling on Obama to take immediate action to reduce government spending.

Boehner's 2/3ds right; Obama spends and borrows too much, but he doesn't tax enough.

mises

Joined: 05 Nov 2007
Location: retired

Posted: Mon Feb 14, 2011 9:42 am Post subject:

^ His tax policy is rubbish:

http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8E3J74?OpenDocument

Quote:

The tax compromise passed in December has been hailed everywhere as a payroll tax cut combined with an extension of the Bush tax cuts, despite the fact that it raised taxes on a third of Americans. The killing of Obama's Making Work Pay tax credit, which the White House called the biggest middle-income tax cut ever, and the replacement of it with the Republicans' payroll tax cut raised taxes on single workers whose wages come to $20,000 or less and married couples with less than $40,000 in wages.

That's 51 million taxpayers, the Tax Policy Center estimated. (See Table T10-277.)

Among the poorest fifth of tax units, whose annual cash income is less than $17,878, two-thirds got hit with a tax increase. On average, their taxes went up $134, which is 1.3 percent of this group's total cash income.

Consider a single worker who makes $6,000. That was the average wage of the bottom third of workers in 2009, the Medicare tax database shows. Killing the Making Work Pay credit in favor of the payroll tax cut amounted to a tax increase of $252, or 4 percent of total income.

Looked at another way, some workers will labor for 23 days this year and next just to pay increased taxes.

The pattern of the Republican-Obama tax plan is a clear stepladder in which the more you make, the more you benefit, and the less you make, the more you pay. This is a form of socialism: upward redistribution to enrich those at the top.

While two-thirds of the poorest Americans -- the ones getting by on less than $1,500 a month -- face a tax increase, the share of people hit with tax increases falls off quickly as you move up the income stepladder.

In the next lowest quintile, taxpayers with cash incomes of under $35,000, 40 percent saw their taxes rise, while in the middle quintile (under $64,000), one in five got a tax increase. In the fourth quartile (under $104,600), one in eight got a tax hike, and in the top quartile, one in 20 did.

At the top, just 1.8 percent of the top 1 percent (more than $564,600) were hit with a tax increase. Just 1.3 percent among the top tenth of 1 percent (more than $2 million) got a tax hike. These best-off one in 1,000 Americans got a tax cut worth on average $45,000 each, all financed with borrowed money.

In raising taxes on the working poor (and the just plain poor), our supposedly socialist president proved himself at one with Ronald Reagan, the subject of all sorts of hagiography this month on what would have been his 100th birthday. Hardly any of the effusive praise points out that while Reagan polished his image as a tax cutter, he was in fact a tax raiser par excellence who presided over a massive expansion of government spending that primarily benefited the affluent and rich.

Reagan raised taxes in seven of the eight years he was governor of California, including when he abandoned his "taxes should hurt" rhetoric to impose withholding so he could expand state spending on the Highway Patrol and other policing. In Washington, Reagan presided over 11 increased levies.

The perpetually obsequious Washington press corps let his administration call these tax increases "revenue enhancers." The late Murray N. Rothbard, a hero to libertarians and self-proclaimed dean of the Austrian school of economics, called this Reaganism "a nice touch of creative Orwellian semantics."

When reading that I thought about the carried interest rule and the fact that hedge fund managers routinely earn more than 1 billion dollars a year - for doing jack $hit for the economy - yet pay less in taxes then the guy who fixed my toilet. The guy who fixed my toilet had his taxes raised.

Kuros

Joined: 27 Apr 2004

Posted: Mon Feb 14, 2011 1:58 pm Post subject:

Andrew Sullivan removes his lips from their previous position, squarely placed on Obama's rear.

Andrew Sullivan wrote:

But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there's some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I'd feel duped. And they were duped. All of us who took Obama's pitch as fiscally responsible were duped.

To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you're fools. Either the US will go into default because of Obama's cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America's fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.

I suppose that's Sullivan's goodbye to Goodbye to All That

jaykimf

Joined: 24 Apr 2004

Posted: Mon Feb 14, 2011 4:07 pm Post subject:

mises wrote:

^ His tax policy is rubbish:

The policy may or may not be rubbish, but It's a little unfair to call it his policy since it is congress that writes the tax laws. While the president does have some ability to negotiate what he is willing to sign, basically he is left in the position of taking or leaving whatever congress sends him.

mises

Joined: 05 Nov 2007
Location: retired

Posted: Mon Feb 14, 2011 4:07 pm Post subject:

Kuros, you'll appreciate this interview:

http://www.youtube.com/watch?v=bCPz2SzROFQ

AS said:

Quote:

you will be paying far far more for far far less

This is what I keep thinking about. Is it worth it to stick around in the West to watch this play out?

mises

Joined: 05 Nov 2007
Location: retired

Posted: Mon Feb 14, 2011 4:09 pm Post subject:

jaykimf wrote:

mises wrote:

^ His tax policy is rubbish:

He has great power in directing congress to his desired outcomes. I know this. You know this. Though if you're going to be a Stalinist about it:

The tax policy written by congress is rubbish.

Fox

Joined: 04 Mar 2009

Posted: Mon Feb 14, 2011 4:32 pm Post subject:

mises wrote:

Is it worth it to stick around in the West to watch this play out?

No.

jaykimf

Joined: 24 Apr 2004

Posted: Mon Feb 14, 2011 5:35 pm Post subject:

mises wrote:

jaykimf wrote:

mises wrote:

^ His tax policy is rubbish:

He has great power in directing congress to his desired outcomes. I know this. You know this. Though if you're going to be a Stalinist about it:

The tax policy written by congress is rubbish.

I know how fond you are of simplistic scapegoating knee jerk rants, but I didn't realize you actually consider it Stalinist to be fair and accurate. I also wasn't aware that the president has the power to direct congress to pass the legislation that he desires. I understand that on several occasions Susan Collins and Olympia Snow have consented to follow his directions. I find it hard to blame the president if all the other Republicans and some Democrats refuse to follow the President's directions.

Kuros

Joined: 27 Apr 2004

Posted: Mon Feb 14, 2011 6:32 pm Post subject:

mises wrote:

Kuros, you'll appreciate this interview:

http://www.youtube.com/watch?v=bCPz2SzROFQ

AS said:

Quote:

you will be paying far far more for far far less

This is what I keep thinking about. Is it worth it to stick around in the West to watch this play out?

I like Jeffrey Sachs.

It is baffling that the rich got a tax cut.

bucheon bum

Joined: 16 Jan 2003

Posted: Tue Feb 15, 2011 9:00 am Post subject:

jaykimf wrote:

mises wrote:

jaykimf wrote:

mises wrote:

^ His tax policy is rubbish:

He has great power in directing congress to his desired outcomes. I know this. You know this. Though if you're going to be a Stalinist about it:

The tax policy written by congress is rubbish.

I read somewhere that more than 3/4s of legislation passed originates in the WH. Yes, it is Congress that passes it to make it law, but most of it starts in the WH.

edit: added a tad to the first sentence.

Last edited by bucheon bum on Tue Feb 15, 2011 9:01 am; edited 1 time in total

bucheon bum

Joined: 16 Jan 2003

Posted: Tue Feb 15, 2011 9:01 am Post subject:

Kuros wrote:

mises wrote:

Kuros, you'll appreciate this interview:

http://www.youtube.com/watch?v=bCPz2SzROFQ

AS said:

Quote:

you will be paying far far more for far far less

This is what I keep thinking about. Is it worth it to stick around in the West to watch this play out?

I like Jeffrey Sachs.

It is baffling that the rich got a tax cut.

He should just STFU about development, otherwise he's a good guy.

johgraker

Joined: 08 Sep 2010
Location: KOREA

Posted: Mon Feb 21, 2011 4:13 am Post subject:

americans should just abolish the fed and then things will get better

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