Kevin Price
Barack Obama's "deficit fighting" efforts
By Kevin Price
The Democrat leadership in both the Congress and the White House are arguing that is is imperative to raise taxes on high wage earners in order to tame the skyrocketing federal deficit. Recently in a message to Congress, Obama said it was a priority to "eliminate the Bush tax cuts for those making more than $250,000 a year and devote those resources instead to reducing the deficit."
This makes for a good sound bite, but defies both economics and his record to date. The best way to spur revenue creation is through job creation, but the current agenda of this administration is leading to the flight of capital (and the jobs such creates) to locations around the world and leaving in its path millions of unemployed people who have been raising the deficit through unemployment compensation, food stamps, and other government programs. With over 44 million on food stamps, things like the deficit will explode. Ronald Reagan's old adage that the "best social program is a job" falls on deaf years with the current leadership in Washington.
Besides the fact the economics do not work, neither does the President's track record. Recently Congressman Kevin Brady noted in a statement that "a new congressional review casts doubt on that claim, revealing that since President Obama took office he has signed seven major new initiatives that increase taxes by $625 billion — with not a single dollar devoted to reducing the deficit. It all went to new spending, plus some."
For every one dollar in higher taxes, the President and Congress spent nearly twice that much — $1.91 — in new spending included in the same legislation, according to a review by the minority staff of the Joint Economic Committee. Brady, who is the leading Republican on the Joint Economic Committee, noted that "Without exception, every tax increase was used to expand government and spending. Not a dime was used to reduce the deficit."
Historically both Democrats and Republicans have known that raising taxes in an economy that is struggling like the one we are in is not sound, economically. In addition, Obama is not using the new dollars he has received in any way towards deficit reduction. The report goes on to note that "Taken together, the seven new initiatives levied $625 billion in higher taxes and will result in $1.195 trillion in new spending over the next decade according to data from the Congressional Budget Office and Joint Committee on Taxation."
The seven new revenue raising (and spending) bills of the last Congress are HR 1PL 111-5 American Recovery and Reinvestment Act of 2009, HR 2PL 111-3 Children's Health Insurance Program Reauthorization Act of 2009, HR 2847PL 111-147Hiring Incentives to Restore Employment Act,
HR 3548PL 111-92Worker, Homeownership, and Business Assistance Act of 2009,
HR 3590*PL 111-148Patient Protection and Affordable Care Act [Includes effect of Health Care and Education Reconciliation Act of 2010, HR 4213**PL 111-205 Investing in American Jobs and Closing Tax Loopholes Act of 2010, and HR 5297PL 111-240Small Business Jobs Act of 2010.
The totals for this Congress is $625 billion in new revenue and $1.2 trillion in new spending.
The argument that the government need more revenue to control the deficit is far from impressive. What is needed is fiscal discipline and a growing economic pie that will generate increased revenues.
© Kevin Price
January 18, 2011
The Democrat leadership in both the Congress and the White House are arguing that is is imperative to raise taxes on high wage earners in order to tame the skyrocketing federal deficit. Recently in a message to Congress, Obama said it was a priority to "eliminate the Bush tax cuts for those making more than $250,000 a year and devote those resources instead to reducing the deficit."
This makes for a good sound bite, but defies both economics and his record to date. The best way to spur revenue creation is through job creation, but the current agenda of this administration is leading to the flight of capital (and the jobs such creates) to locations around the world and leaving in its path millions of unemployed people who have been raising the deficit through unemployment compensation, food stamps, and other government programs. With over 44 million on food stamps, things like the deficit will explode. Ronald Reagan's old adage that the "best social program is a job" falls on deaf years with the current leadership in Washington.
Besides the fact the economics do not work, neither does the President's track record. Recently Congressman Kevin Brady noted in a statement that "a new congressional review casts doubt on that claim, revealing that since President Obama took office he has signed seven major new initiatives that increase taxes by $625 billion — with not a single dollar devoted to reducing the deficit. It all went to new spending, plus some."
For every one dollar in higher taxes, the President and Congress spent nearly twice that much — $1.91 — in new spending included in the same legislation, according to a review by the minority staff of the Joint Economic Committee. Brady, who is the leading Republican on the Joint Economic Committee, noted that "Without exception, every tax increase was used to expand government and spending. Not a dime was used to reduce the deficit."
Historically both Democrats and Republicans have known that raising taxes in an economy that is struggling like the one we are in is not sound, economically. In addition, Obama is not using the new dollars he has received in any way towards deficit reduction. The report goes on to note that "Taken together, the seven new initiatives levied $625 billion in higher taxes and will result in $1.195 trillion in new spending over the next decade according to data from the Congressional Budget Office and Joint Committee on Taxation."
The seven new revenue raising (and spending) bills of the last Congress are HR 1PL 111-5 American Recovery and Reinvestment Act of 2009, HR 2PL 111-3 Children's Health Insurance Program Reauthorization Act of 2009, HR 2847PL 111-147Hiring Incentives to Restore Employment Act,
HR 3548PL 111-92Worker, Homeownership, and Business Assistance Act of 2009,
HR 3590*PL 111-148Patient Protection and Affordable Care Act [Includes effect of Health Care and Education Reconciliation Act of 2010, HR 4213**PL 111-205 Investing in American Jobs and Closing Tax Loopholes Act of 2010, and HR 5297PL 111-240Small Business Jobs Act of 2010.
The totals for this Congress is $625 billion in new revenue and $1.2 trillion in new spending.
The argument that the government need more revenue to control the deficit is far from impressive. What is needed is fiscal discipline and a growing economic pie that will generate increased revenues.
© Kevin Price
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