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.
President Barack Obama made his pitch yesterday to jack up tax rates on high-income earners and bring a host of new fees that will reach across income groups — offering $3 in tax hikes for every $1 in spending cuts:
Drawing clear battle lines for next year’s elections, a combative President Barack Obama on Monday demanded that the richest Americans pay higher taxes to help cut soaring U.S. deficits by more than $3 trillion. He promised to veto any effort by congressional Republicans to cut Medicare benefits for the elderly without raising taxes as well.
“This is not class warfare. It’s math,” Obama declared, anticipating Republican criticism, which was quick in coming.
The president’s proposal, which he challenged Congress to approve, would predominantly hit upper-income taxpayers and would also target tax loopholes and subsidies used by many larger corporations. It would spare retirees from any changes in Social Security, and it would direct most of the cuts in Medicare spending to health care providers, not beneficiaries.
Benefit programs wouldn’t be unscathed. Obama’s plan would reduce spending for those, including Medicare and Medicaid, by $580 billion. But with Republicans calling for massive cuts in entitlement programs, Obama said he would veto any legislation that cut Medicare benefits without raising new revenue.
Podcast: State of the Union, Bank Fees, Spending Freeze, War on Terror, Gay Equality, Guests: Andisheh Nouraee & Jeff Scott
As noted yesterday, President Obama has made it clear that he intends to use Bain Capital as part of his campaign against Mitt Romney. His team no doubt hopes that they can reignite the same populist craze that put him in the White House by tearing down private equity in the process, despite the fact that he takes their money (a shocker, I know) and took economic advice from Jon Corzine, former head of MF Global.
But a new poll from Rasmussen shows that the attacks aren’t working, and may indeed hurt Obama more than it helps him:
Democrats have begun criticizing Mitt Romney’s business record, but a plurality of voters view the Republican’s business past as a positive.
A new Rasmussen Reports national telephone survey finds that 44% of Likely U.S. Voters believe that Romney’s track record in business is primarily a reason to vote for him. Thirty-three percent (33%) see his business career as chiefly a reason to vote against him. Twenty-two percent (22%) are undecided.
While the political right has a well-earned reputation for favoring military intervention abroad, the truth is that the urge to spend blood and treasure in foreign adventures extends far beyond the hawks of the Republican Party. The causes are often quite different, but the proposed solution is the same - sending American soldiers to some far-off land, whether in support of supposed American interests, or in order to fight some alleged injustice.
Enter the latest Internet meme - Joseph Kony. According to a video produced by a group called Invisible Children circulating around the Internet (I won’t link to it, but it’s easy to find), Kony is a horrific Ugandan terrorist who uses child soldiers and commits all manner of atrocities. Now, the underlying facts seem to be sound - it’s true that Kony is a terrible man. But there are serious questions about the nature of the Invisible Children charity, and the campaign they are running.
Furthermore, there are significant problems with the whole tactic. It’s a dangerous proposition to send troops and intervene in a foreign nation without deeply understanding the issues at hand. The idea that we would ever make such a decision based on a viral web video is truly scary. And, most crucially, it has yet to be shown in any way that our interests are at stake. Myself and other non-interventionists shudder at the idea of committing troops simply as an act of do-gooderism.
It is a dangerous myth that American forces can, or should, be used as world police to fight every bad guy. If there is one thing humanity has shown, it is excellent at producing monsters - and quixotic good guys who think they can stop them. If one seeks to rid the world of all villains one would need an army of millions and untold trillions of dollars that simply do not exist. We must stand strong and reject the call to take action abroad in all but the most dire circumstances, and only then as a last resort.
During his State of the Union address, President Barack Obama telegraphed his intent to wage class warfare against the rich, hoping to revive the populism that helped put him in office at the height of the financial crisis.
Obama once again pushed for the so-called “Buffett Rule” — after Warren Buffett, who pays a higher tax rate than his secretary. The rule would tax individuals making over $1 million at a higher rate, out of “fairness.”
Writing at the Wall Street Journal, economist Stephen Moore asks President Obama about “fairness,” taxes, and his economic policies that discourage success:
President Obama has frequently justified his policies—and judged their outcomes—in terms of equity, justice and fairness. That raises an obvious question: How does our existing system—and his own policy record—stack up according to those criteria?
Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?
Is it fair that the richest 10% of Americans shoulder a higher share of their country’s income-tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?
Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?
Is it fair that President Obama sends his two daughters to elite private schools that are safer, better-run, and produce higher test scores than public schools in Washington, D.C.—but millions of other families across America are denied that free choice and forced to send their kids to rotten schools?
As we head into the South Carolina primary where former Pennsylvania Senator Rick Santorum may still have a shot at the GOP nomination, it’s worth recalling what Sen. Santorum had to say about libertarians and others who favor limited government during an interview with NPR in August 2005:
One of the criticisms I make is to what I refer to as more of a Libertarianish right. They have this idea that people should be left alone, be able to do whatever they want to do, government should keep our taxes down and keep our regulations low, that we shouldn’t get involved in the bedroom, we shouldn’t get involved in cultural issues. That is not how traditional conservatives view the world. There is no such society that I am aware of, where we’ve had radical individualism and that it succeeds as a culture.
This has rightly riled many libertarians, who insist that the “radical individualism” derided by Santorum was the basis for the American experiment. But libertarians should really be thanking Rick Santorum. He’s provided us with a valuable reminder that far from being a limited government ally of libertarianism, traditional conservatism is actually inimical to libertarian principles. Traditional conservatism was America’s first statist, big government ideology.
While Occupy Wall Street enjoyed a brief moment of decent polling, their increasingly violent and hostile protests has started to turn public opinion against them, according to a new survey from Quinnipiac:
A sign that the Occupy Wall Street movement isn’t the best long-term vehicle for Democrats to connect themselves with: A new Quinnipiac poll, showing a plurality of voters viewing the group unfavorably.
The poll, released today, show 30 percent of voters surveyed view the movement favorably, 39 percent unfavorably, with an additional 30 percent not hearing enough to have an opinion. It’s one of the first national polls to suggest voters are growing skeptical of Occupy Wall Street- and it comes as police have clashed with protesters in several cities. Previous national polls have shown a plurality of adults supporting the movement.
Among independents, the Occupy Wall Street movement and Tea Party movement are now viewed equally unfavorably. Occupy Wall Street has a net -13 favorable rating with independents (29% favorable/42% unfavorable), while the Tea Party holds a net -11 favorable rating (34% favorable/45% unfavorable).
President Barack Obama did two things on Friday that I agree with. As noted earlier, Obama announced the withdrawal of American military forces from Iraq by the end of the year (though it was not a principled decision) and he signed recently passed and much needed trade agreements:
President Barack Obama signed off Friday on the first three — and possibly last — free trade agreements of his administration, deals with South Korea, Colombia, and Panama that could be worth billions to American exporters and create tens of thousands of jobs.
The three deals were years in the making, and the difficulty of bringing them to fruition make it unlikely there will be another bilateral trade agreement during Obama’s current term.
Obama signed them with none of the ceremonial fanfare that normally accompanies such triumphs. Republicans, while supportive of the deals, continue to find fault with Obama’s trade policies. And nearly three-fourths of House Democrats voted against the trade measures.
The agreements will bring to 20 those countries that have free trade relations with the United States.
Given that House Democrats beholden to labor unions overwhelmingly opposed these agreements, it’s a break from a considerable chunk of his party’s base. And as recently noted, the White House also opposes a measure pushed by Senate Democrats that would start a trade war with China.
Given that free trade is essential to economic growth and prosperity, I would have thought that support for trade agreements passed last week from tea party-leaning House GOP freshman would have gone without question:
The 89 House Republicans new to Congress this year — many of whom were backed by the Tea Party — were courted by both sides of the debate over the long-stalled trade deals with Colombia, Panama and South Korea.
With their views on trade relatively unknown, some opponents of the deals thought they had an opening to sink them from the right.
But in the end, almost all of the GOP frosh voted in favor of the three agreements. Rep. Tom Reed (R-N.Y.) told The Hill a consensus formed among the newcomers that the trade deals deserved their support.
Of the 89 House GOP freshmen, only seven voted against the Korea trade agreement. Those “nay” votes were Reps. Jeff Duncan (S.C.), Renee Ellmers (N.C.), Trey Gowdy (S.C.), Morgan Griffith (Va.), Robert Hurt (Va.), David McKinley (W.Va.) and Mick Mulvaney (S.C.).
McKinley was the only other House Republican freshman to vote against the other two trade deals, with Colombia and Panama.
I think, in some respect, that the populism in the tea party movement may have been thought of as a reason that these guys wouldn’t support these much needed agreements. That’s been a long-standing concern of mine about the tea party movement as a I often hear cries for “fair trade.” I really think that there is a divide on this issue amongst conservatives and tea party-ers, and there shouldn’t be given the overwhelming benefits of free trade.