Mulligan: Obama Budget 2.0


Frankly, wish he had gone golfing instead...

It is funny how quick the tide turns in politics.  A year ago, Republicans were getting trounced as Senate Democrats used reconciliation to pass Obamacare, the largest expansion of federal power in recent history.

A year later, Mr. Obama is going to call for entitlement cuts.

It has been a remarkable journey, and does show how convincingly conservatives have won the larger debate on fiscal sanity over the past two years.  The public, in poll after poll, believes that the government is overspending, and needs to cut back.

Mr. Obama has had to course correct as well.  It was only in February, 8 weeks ago, that Mr. Obama and the White House presented the President’s 2012 proposed budget.  That budget ignored tax and entitlement reform, had no cuts, and actually increased the debt by almost $1.2 trillion over the next year.  More importantly, it completely ignored Obama’s own budget commission, which provided a report in full detail in the end of 2011.

A mere 60 days or so later, Obama today will present a new budget.  Yes, to be sure it will be full of increased taxes, and Obama dredges up his promise to raise taxes on those making over $250,000 and up.  That proposal is dead on arrival, especially considering Obama abandoned that proposal back in December when he extended Bush era tax cuts.  The plan also spells the end of the ‘above the fray’ tactic the White House had hope to employ through out the President’s re-election bid.  He is now clearly in the thicket with the rest of the politicos in Washington.

So, the keys to Obama’s proposal:

  1. Tax hikes – Obama focuses on the elimination of the Bush tax cuts…again.  Remember, it was only in December that the President signed an extension of those same tax cuts. The only acceptable tax change is with wholesale tax reform  (a flat tax, removal of exemptions, lowering corporate tax rates, etc.), Republicans may consider that.  A blind increase in tax rates is the cowards way out, without any significant reform that would benefit the American economy.  Obama never specified any specific tax deductions that he would change.
  2. Social Security – Obama said virtually nothing about the program.  No age changes, no means testing, nothing.
  3. Medicare, Medicaid, and Health Care – Obama stated no new plans…he only lauded his old plan, and said that Obamacare already would reduce health care costs.  That appears to be a completely ludicrous statement, after new CBO studies say the opposite.
  4. Defense – He proposes cuts amount to $400 billion over 12 years.   This is actually the only reasonable plan that he proposed today.

There is some irony in this President making a significant speech on the economy and deficit, and focusing on tax increases…a mere 5 days before tax day. But more importantly, this was simply not a serious discussion.  Obama claims to want to be the adult on the political stage, but this speech was childish grandstanding, and nothing more. There was no serious plan proposed; no specifics; and no sacrifice. Cutting $4 trillion in the next 12 years is a joke beyond measure.  No serious economic plan uses 12 years as a standard; 10 years is the norm.  All cuts are postponed to after the next Presidential election, which is unacceptable.  And the majority of cuts he does proposes doesn’t save any money until well after Mr. Obama would leave office…in his second term. I had virtually no expectations of this speech…and Mr. Obama met those expectations.  He did not move the debate over budget reform significantly forward in any way.  He did not accept any of the reforms that his own budget commission suggested.  He simply accepted the nanny welfare state As-Is, and defended it. Republicans clearly are the ones driving this debates, and are the adults in Washington.  Democrats, following last weeks budget CR and today’s speech by the President, are simply bystanders in the race to save this country fiscally.  Obama today abdicated all responsibility for the budget for as far as the eye can see.