Raising taxes will not prevent economic problems

United States Capitol

Negotiations over the so-called “fiscal cliff” are back in full swing, but the White House and congressional leaders are no closer to an agreement on taxes and spending cuts. Just before Thanksgiving, House Speaker John Boehner told ABC News that he wants ObamaCare, President Obama’s signature domestic policy, put on the table during “fiscal cliff” negotiations. Republicans are also pushing for more transparency in the deal-making process, urging their leadership to put everything out in the open.

Boehner has been pushing the idea of pro-growth tax reform that doesn’t raise rates. That seems like a non-starter since White House and Senate Democrats have made it clear that they want to raise rates for higher-income earners. And unfortunately, some Republicans in Congress are getting anxious about a deal and are abandoning their pledge to constituents not to raise their taxes.

Raising taxes in this economy is a bad idea. Just two years ago, President Obama supported extending tax rates for another two years because he realized that the economy would struggle even more if tax rates suddenly changes. The economic climate isn’t much better today.

Michael Tanner, a senior fellow at the Cato Institute, recently explained that raising taxes on the rich isn’t going to balance the budget:

Chart of the Day: Long-term budget picture isn’t pretty

You mad, bro?

During a September interview with David Letterman, President Barack Obama addressed the national debt, telling The Late Show host that Americans shouldn’t worry about it in the short-term. Obama did explain, however, that there were issues that faced the country. He noted that the national debt “is a problem long-term and even medium-term and so we’re going to have to take care of this debt and deficit, but we’ve got to do it in a balanced way.”

Actually, the budget deficits that have been run up on Obama’s watch in the last four years have been a problem. If you’ll recall the debt ceiling fight we had last year and the warnings from credit rating agencies that the United States had to do something about its fiscal obligations — in fact, we’ve downgraded by two credit rating agencies. That spurred Congress to work with Obama on sequestration cuts that are supposed to take place at the beginning of the year. Oddly enough, those cuts are now part of the “fiscal cliff,” a combination of tax hikes and spending cuts that every politician in Washington is trying to avoid at this present moment.

Even though he underestimated the short-term problems with the deficit, which isn’t something that raising taxes with help because it doesn’t promote growth, Obama is right about the long-term issues that pose a very real threat to the economy.

A libertarian explains why she’s voting for Mitt Romney

While some conservative bloggers have tried to make a case for libertarians voting for Mitt Romney, they haven’t really been able to connect because they fail to understand where we’re coming from in our perspective on politics and public policy. However, Liz Mair, a libertarian who works as a political consultant and strategist, explains that she is voting for Romney, despite reservations about some of his policies:

Poll: Romney pulls even with Obama on Medicare

Remember when Democrats thought that Mitt Romney’s selection of Paul Ryan would be easy for them to tear down because of his reasonable proposal to reform Medicare? They’ve certainly tried to demagogue the issue — take, for example, DNC Chair Debbie Wasserman Schultz attempt during the summer on CNN when she was educated by Wolf Biltzer.

But new polling from the Kaiser Family Foundation shows that the attacks haven’t worked, as Romney has narrowed the gap with President Obama on Medicare:

Mitt Romney has pulled even with President Obama when it comes to the question of whom voters trust on Medicare, according to a new poll.

October’s Kaiser Health Tracking poll found that in one month, Romney brought Obama’s lead on Medicare issues from 16 points down to 5, a gap that was not statistically significant in the poll.

Those figures represent the leanings of likely voters. Among seniors, Kaiser found that Romney leads Obama on Medicare by 5 points (48 percent to 43).
Kaiser found that 61 percent of likely voters and 72 percent of seniors oppose converting Medicare to a premium-support system. Romney and his running mate, Rep. Paul Ryan (R-Wis.), have endorsed plans to partially privatize the program, giving future seniors a fixed dollar amount to buy coverage from traditional Medicare or on the private market.

Opposition to premium support is stable among non-seniors, though Kaiser cited other research that found opinion on the issue to be “quite malleable” and disposed to “persuasive messaging.”

‘Mediscare’ and the Pennsylvania Senate Race

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

Back in August, Cato adjunct scholar Veronique de Rugy expressed concern about Republican campaign rhetoric on Medicare. As Republicans tell it, they want to “protect” and “strengthen” Medicare, whereas President Obama wants to “cut” and “weaken” it. Veronique thinks that the GOP’s “Mediscare” campaign could end up backfiring by making it harder to reform Medicare if Republicans succeed in taking control of Washington.

What I find irritating is that for all the standard platitudes from Republicans about getting federal spending under control, they’re simultaneously attacking Democrats for allegedly wanting to cut the budget’s big-ticket items like Medicare and military spending. Democrats might deserve it for decades of trying to scare the pants off of seniors, but the GOP’s adoption of their tactics is evidence in support of the view that the parties merely represent two sides of the same coin. (Don’t forget the last big expansion of entitlements came from the Republican-engineered addition of a prescription drug benefit to Medicare in 2004.)

That brings me to the Pennsylvania race for U.S. Senate , where Republican challenger Tom Smith is trying to unseat Democrat Bob Casey. Smith is apparently in striking distance after months of running television ads attacking Casey. However, one particular ad being run by the Smith campaign is a good example of how low Republicans have sunk when it comes to Mediscaring:

Welfare spending rises significantly under Obama

Barack Obama

It goes without saying that George W. Bush was a big spender. In fact, he was the biggest spending president since Lyndon B. Johnson, who implemented the so-called “Great Society,” creating new entitlements — Medicare and Medicaid. Some Republicans argue that Bush’s spending spree was mostly for defense after 9/11, but doesn’t tell the whole story.

Bush increased spending on a variety of non-defense programs, raising non-defense discretionary spending by 5.4% during his eight years in office. In a study on welfare spending published earlier this year by the Cato Institute, Michael Tanner noted, “Federal welfare spending increased significantly under the Bush administration.” Democrats, playing the part of budget hawks, were complaining about budget deficits and the national debt. Barack Obama, then a senator from Illinois, said that Bush’s spending binge was “irresponsible” and “unpatriotic.”

But while the the fiscal irresponsibility of Bush was outrageous, as Tanner explained, President Obama “has thrown money at anti-poverty programs at an unprecedented rate.” How quickly has welfare spending grown? According to a new report from the Congressional Research Service, welfare spending under President Obama has grown by 33%, a truly astounding number:

So much for a “balanced approach” to the budget deficit problem

You mad, bro?

Over the last few years, President Barack Obama has pushed a so-called “balanced approach” to the deal with the out-of-control budget deficits that have become the status quo in Washington over the last four years — totaling more than $5.5 trillion. But James Pethokoukis notes that President Obama’s approach to dealing with budget deficits relies overwhelmingly on increase revenues to the federal government (ie. taxes hikes) than it does on spending cuts:

Obama says his budget would achieve $4 trillion in new savings, just like Simpson-Bowles. But he includes a lot of stuff in that $4 trillion that S-B do not. As the Committee for  a Responsible Federal Budget points out:

To reach his $4.3 trillion in savings through 2021, the President’s budget counts $1.6 trillion (excluding interest) of  already-enacted savings. In addition, it includes two elements which the Fiscal Commission  assumed in its baseline – a drawdown of the wars ($740 billion through 2021) and the expiration of the upper-income tax cuts ($830 billion through 2021). If the Commission’s plan were scored the  same way as the President’s $4.3 trillion, we estimate it would save roughly $6.5 trillion through  2021.

Compared  to CRFB’s Realistic Baseline, we estimate that all new policies in the President’s budget would save nearly $2 trillion through 2022.

‘I Haven’t Raised Taxes’

Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

Why am I only hearing about President Obama’s gob-smacking “I haven’t raised taxes” claim today, and from Reason?

On CBS News’s “60 Minutes” Sunday night, President Obama said, “Taxes are lower on families than they’ve been probably in the last 50 years. So I haven’t raised taxes.”

As of Monday morning, neither the Washington Post’s Pinocchio-awarding Fact-Checker, nor the Annenberg Public Policy Center’s, nor the Tampa Bay Times’ Pulitzer-Prize-winning had risen to this opportunity…

Unbelievable. I just checked those websites, and they still haven’t.

Fortunately, Ira Stoll has. He leaves out a number of taxes President Obama has enacted, though, including raising the Medicare payroll tax on high-income earners, applying the Medicare payroll tax to non-payroll income for high-income earners, limiting the tax exclusion for flexible spending accounts, increasing the penalties on certain health savings account withdrawals, the “Cadillac tax” on high-cost health plans…

Healthcare premiums up $2,370 since 2009

You mad, bro?

When the debate over health care “reform” started in 2009, President Barack Obama told Americans that more government in order to lower healthcare costs. If anything, Medicare has taught us that government involvement in healthcare has driven up the cost of private health insurance.

The logic behind Obama’s premise was, well, flawed, to say the least. Medicare Actuary Richard Foster has publicly doubted cost savings from ObamaCare and even the architect of his healthcare plan admitted that ObamaCare would do nothing to rein in costs.

But a new report from the Kaiser Family Foundation shows that health insurance premiums have skyrocketed in the last few years. You’re shocked, I’m sure:

During his first run for president, Barack Obama made one very specific promise to voters: He would cut health insurance premiums for families by $2,500, and do so in his first term.

But it turns out that family premiums have increased by more than $3,000 since Obama’s vow, according to the latest annual Kaiser Family Foundation employee health benefits survey.

Premiums for employer-provided family coverage rose $3,065 — 24% — from 2008 to 2012, the Kaiser survey found. Even if you start counting in 2009, premiums have climbed $2,370.

Here is a handy chart from Investor’s Business Daily showing the rise in premiums compared to Obama’s promise to magically lower premium costs:

insurance premiums on the rise

David Axelrod: Now is not the time to fix Social Security

David Axelrod

During an appearance last week on The Late Show, President Barack Obama told David Letterman that he wasn’t worried about the national debt in the short-term, but rather that the long-term challenges it presents are more concerning. In reality, both present and long-term budget issues are concerns.

As I explained last week, in just the next 25 years, our budget is going to grow to near nearly 36% of our economy and our debt will double in size to 200%, both far greater than in size than they are today. Much of that growth will come from entitlement programs like Medicare and Social Security, which will consume 16.6% of gross domestic product by 2037.

While this is a certainly a great challenge for Congress, reforming entitlement programs is a must before they do damage to our future prosperity. Unfortunately, David Axelrod, who is the top adviser to President Obama’s campaign, has ruled out such as prospect:

During a discussion about the entitlement program on MSNBC’s “Morning Joe,” Axelrod said entitlements must be dealt with “in a balanced way” but that the president wasn’t ready to have a discussion about specifics 43 days before the election between Obama and Republican Mitt Romney.

“I’ll tell you what, when you get elected to the United States Senate and sit at that table, we’ll have that discussion,” Axelrod told Mark Halperin when the Game Change author pushed Axelrod to be more specific.


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.