Archives for February 2012
As expected, President Barack Obama rolled out his budget proposal for FY 2013, which, as we noted yesterday, comes with a $1.33 trillion budget deficit. As you can imagine, there is a lot to parse through it the proposal, which has been all but declared dead-on-arrival in Congress.
Some of the budget proposals are familiar. President Obama is once again pushing tax hikes on individuals earning more than $250,000 — more than the millionaires and billionaires he so frequently targets. James Pethokoukis has a run down of the tax hikes in the budget:
Obama’s new budget isn’t about economic growth or cutting debt or creating a “built to last” economy. The Obama campaign is built around the idea of reducing inequality. So in his budget, Obama takes the populist whip to the wealthy and to business:
1. The top income rate would be raised to 39.6 percent vs. 35 percent today.
2. Under the “Buffett rule,” no household making over $1 million annually would pay less than 30 percent of their income in taxes.
3. Between now the end of a second Obama term, Obama proposes $707 billion in “net deficit reduction proposals.” Of that amount, only 16 percent is spending cuts.
4. The majority of small business profits would be taxed at 39.6 percent vs. 35 percent today.
5. The capital gains rate would rise to 25.0 percent (including the Obamacare surtax and deduction phase out) from 15 percent today.
6. The double-tax on corporate profits (including dividends) would increase to 64 percent based on the statutory corporate tax rate (58 percent using the effective tax rate), easily the highest among advanced economies.
Some panels are off in nowhere, little rooms here and there. Other panels are in giant ballrooms, like the Marshall Ballroom, second largest to the Marriott where all the major speakers are, well, speaking. (Perhaps “blustering” is a better word.) And sometimes, those ballrooms were not full. But then maybe I got there early.
It was certainly an illustrious panel, which explained why it began to fill up shortly after it officially began. It was chaired by Grover Norquist himself, President of Americans for Tax Reforms, and the legendary proponent of the “No New Taxes” Pledge he encouraged (some on the left would say “forced”) politicians to take up. To his right was Lew Uhler , chair of the National Tax Limitation Committee, and to his left were Benjamin Powell of the Independent Institute and Phil Kerpen, Vice President for Policy, of Americans For Prosperity. I went because the subtitle implied there was going to be a debate between supporters of the Flat Tax, Fair Tax, a VAT, and maybe even 9-9-9—and that plan’s author, Rich Lowrie, did show up in the audience. But there really wasn’t any debate on that front.
And let’s face it, what kind of debate can we really have on taxes? Even the left admits that the tax code we have now is horrifically complex, prone to corruption and gaming the system. Though they disagree about “broadening the base and lowering the rates,” I don’t think any sane American, left, right, or center, can look at the miasma we have now and say, “Yeah, it works.” For whom?
There were some interesting points to be made, but ultimately I didn’t think the solutions that Norquist posed during question time were all that good. But let’s focus on the interesting first:
While Rick Santorum has become the latest conservative darling, an ad has surfaced from his failed 2006 re-election campaign where the then-struggling Senator was trying to convince Pennsylvania voters that he was a moderate on economic issues — including his for increasing the minimum wage and continuing subsidies for Amtrak — to deserve to be sent back to Washington.
Andrew Kaczynski also notes that Santorum’s campaign put together a pamphlet in an attempt to appeal to moderates, which included some points that should make economic statists like him.
Deep within the bowels of CPAC, in a small conference room on the second floor of the Marriott Wardman hotel, dozens of people packed inside to listen to a blue ribbon panel—or perhaps I should say “gold standard” panel, for that was what John Mueller of the Ethics and Public Policy Center, Jeffrey Bell of the American Principles Project, and James Grant—yes, that James Grant, author of Grant’s Interest Rate Observer and Ron Paul’s pick to head the Federal Reserve—were on hand to talk about and explain: a return to the gold standard. And yes, Grant—and many in the crowd—were wearing bowties.
Although I do wonder if the real reason people showed up were because of the Bavarian pretzels they were offering.
I have to admit, I came into the panel with a major question. I am totally for the abolition of fiat currency, the abolition of the Federal Reserve, and the restoration of a sound money policy. 2011 dollars are worth about 19 cents in 1971 dollars, the year when Nixon closed the gold window and took the country off the gold standard. It is, I argue, the necessary step before we can even look at getting rid of minimum wage, unemployment compensation, things that libertarians would want to remove, but we can’t because the money people are using isn’t worth anything. But is the gold standard really, well, the “gold standard” of monetary reform? Would going back to the sixties necessarily bring back prosperity? Were there any other alternatives?
For what it’s worth, I’m opposed to the individual mandate in ObamaCare. I believe it’s a violation of the Commerce Clause for the Congress to compel anyone to purchase a certain product. However, many conservatives are now faced with explaining why they once backed the individual mandate, but now oppose it. Over at Forbes, Avik Roy explains:
As far as I have been able to find, Stuart’s [Heritage health-policy chief Stuart Butler] 1989 brief is the first published proposal of an individual mandate in the context of private-sector-managed health systems. In 1991, Mark Pauly and others developed a proposal for George H.W. Bush that also included an individual mandate. While others credit Stanford economist Alain Enthoven with the idea, Enthoven’s earliest published reference to an individual mandate was an indirect one in the 1992 Jackson Hole paper.
Rick Santorum, Republican candidate for President (or Pope, not sure which at times) has once again come under fire for opening his mouth, this time for saying that women shouldn’t be allowed in front line combat units:
Republican presidential candidate Rick Santorum expressed skepticism on Thursday about a recent decision by the Pentagon to open up more military roles for women on the front lines, suggesting their “emotions” could create a “compromising situation” if they were thrown into combat.
Asked by CNN’s John King if the move, “perhaps opening the door to a broader role for women in combat,” was an idea he’d support as president, Santorum responded:
“I want to create every opportunity for women to be able to serve this country, and they do so in an amazing and wonderful way and they’re a great addition — and they have been for a long time — to the armed services of our country.”
Then came the big “but.”
“But I do have concerns about women in front-line combat, I think that could be a very compromising situation, where people naturally may do things that may not be in the interest of the mission, because of other types of emotions that are involved,” Santorum continued. “It already happens, of course, with the camaraderie of men in combat, but I think it would be even more unique if women were in combat, and I think that’s probably not in the best interest of men, women or the mission.”
Santorum later tried to clarify his statements on CNN:
I wrote last year that Ron Paul had to repudiate Lew Rockwell if he was going to get anywhere. Last I checked, he didn’t follow my advice (unless that one missed call from an unknown number was his personal cell and he was trying to get in touch with me), though it would be the height of arrogance for me to suggest that it was that particular bit which led to his defeat in Iowa.
But it might be less arrogant to suggest that, if the Republican Party doesn’t follow what I’m about to say, they will throw the 2012 election and perhaps relegate themselves to a non-party as early as 2024.
In a nutshell, the Republican Party must repudiate Rick Santorum, refuse to grant him the nomination, and simultaneously expel the social conservatives from the party and embrace true limited government, free market, essentially libertarian principles.
Nearly two weeks ago, the Congressional Budget Office (CBO) issued a report on the budget outlook for this year, noting that taxpayers can expect yet another trillion dollar deficit — $1.08 trillion, to be exact, under President Barack Obama. But a new estimate from the White House from the yet to be released budget proposal shows a slightly higher deficit — $1.33 trillion — than the CBO, showing that the Obama Administration has no intention of reducing the red ink flowing out of Washington:
President Obama’s Monday budget request to Congress will forecast a fiscal year 2012 deficit of $1.33 trillion and will include hundreds of billions of dollars in proposed infrastructure spending, The Wall Street Journal reported on Friday.
The projected deficit is higher than 2011’s $1.296 trillion deficit and slightly higher than the Congressional Budget Office’s roughly $1.15 trillion projection released last week. The budget, according to draft documents viewed by Dow Jones Newswires and The Journal, will forecast a $901 billion deficit for fiscal 2013, which would be equivalent to 5.5 percent of gross domestic product. That is up from the White House’s September forecast of a deficit of $833 billion, or 5.1 percent of GDP, the newspaper said.
According to The Journal, the White House’s projected 2012 deficit would be about 8.5 percent of GDP.
Politico reports that Mitt Romney has won the Conservative Political Action Conference (CPAC) straw poll over Rick Santorum, who has been surging in recent days in the race for the Republican Party’s presidential nomination.
While official results have not been released on CPAC’s official website, here is what Politico and other outlets are reporting:
- Mitt Romney: 38%
- Rick Santorum: 31%
- Newt Gingrich: 15%
- Ron Paul: 12%
Romney, who spoke at the conference yesterday, also won in 2007, 2008, and 2009. Ron Paul, who declined an invite to speak this year (though his son, Sen. Rand Paul (R-KY), spoke on Thursday), won the straw poll in 2010 and 2011.
So, it seems that 10 states, including my own Georgia, are being given “flexibility” by the White House regarding No Child Left Behind. That’s just super. The run down via Fox News:
The first 10 states to receive the waivers are Colorado, Florida, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, New Jersey, Oklahoma and Tennessee. The only state that applied for the flexibility and did not get it, New Mexico, is working with the administration to get approval, according to an official.
Meanwhile, 28 other states, as well as the District of Columbia and Puerto Rico, “have indicated their intent to seek flexibility,” the official said.
No Child Left Behind requires all students to be proficient in reading and math by 2014. Obama’s action strips away that fundamental requirement for those approved for flexibility, provided they offer a viable plan instead.