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American and Latin American Politics, Society, and Culture

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So here’s Obama’s no-deal deal:

The White House plan:

  • $1.6 trillion in tax increases over 10 years,
  • more spending right now: $50 billion in immediate stimulus spending, CORRECTION: $200 billion in stimulus
  • home mortgage refinancing and
  • a permanent end to Congressional control over statutory borrowing limits.

In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced the goal of finding $400 billion in savings from Medicare and other social programs to be worked out next year, with no guarantees.

No wonder McConnell ‘Burst Into Laughter’ as Geithner Outlined Obama’s Plan

Paul Mirengoff:

The decision to present this absurdly one-sided proposal comes straight from the Obama playbook. Recall that the president has presented budgets so ridiculous that they could not garner even one Democratic vote in Congress. Republicans then presented detailed budgets that, unlike the president’s, actually address the debt crisis. Obama responding by demagoguing the Republican cuts.

Republicans shouldn’t play this game again. They should tell the White House to eliminate the stimulus spending and the proposal to end Congressional control over statutory borrowing limits, and to propose detailed and significant spending cuts. If the White House declines to do so, Republicans should walk away.

Making the Senate present a budget for the first time in 3 years would be a good start, too.

UPDATE,
Ezra Klein thinks the Republicans should now propose their own. Ezra, where’s the Dems’ budget?

Kimberly Strassel:

Don’t forget: The man now engaged with Congress to work out a grand deal is the same one who could not pull over to his side a single Republican vote for his stimulus legislation, who had to ram through ObamaCare with procedural tricks, and whose inept handling of last year’s debt-ceiling talks ultimately led his fellow Democrat, Senate Majority Leader Harry Reid, to isolate him from the final negotiations. This is not a history to inspire confidence.

Mr. Obama’s tendency to campaign rather than lead, to speechify rather than negotiate, has already defined this lame-duck session. The president has wasted weeks during which a framework for a deal has been in place.

Within two days of the election, Mr. Boehner had offered an enormous compromise, committing the GOP to provide new tax revenue, through limits on deductions for the wealthy. Mr. Obama campaigned on making “the rich” pay more—and that is exactly what Mr. Boehner agreed to give him.

All that was left for the president to do was accept this peace offering, pair it with necessary spending cuts, and take credit for averting a crisis. Mr. Obama has instead spent the past weeks campaigning for tax-rate hikes. He wants the revenue, but collected only the way he chooses. And on the basis of that ideological insistence alone, the nation is much closer to a crisis.
…
Then again, the most frightening aspect of the White House proposal is that it wasn’t an error. Perhaps the proposal was thoroughly calculated. This suggests a president who doesn’t care about the outcome of the cliff negotiations—who thinks that he wins politically no matter what. He’s betting that either the GOP will be far more responsible than he is and do anything to avert a crisis, or that the cliff gives him the tax hikes his partisans are demanding. Win-win, save for the enormous pain to average families across the country.

Not that Obama gives a rat’s behind. He’s going on vacation. Besides, the Democrats are completely convinced that if no deal is reached, the Bush tax cuts expire, and sequestration takes effect, Republicans will get most of the blame.

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One thing growing in this economy: Welfare!

This morning’s news (and keep in mind that the Senate Democrats last passed a budget on April 9, 2009):

Report: Welfare government’s single largest budget item in FY 2011 at approx. $1.03 trillion

According to the CRS report, which focused solely on federal spending for federal welfare programs, spending on federal welfare programs increased $563.413 billion in fiscal year 2008 to $745.84 billion in fiscal year 2011 — a 32 percent increase.

Further, spending on the 10 largest federal welfare programs has doubled as a share of the federal budget in the last 30 years: In inflation-adjusted dollars, according to Republican staff on the Senate Budget Committee, the amount spent on these programs has increased 378 percent in that 30 year time frame.

The $1.3 trillion does not include Social Security ($725 billion) or Medicare ($480 billion).

“Under Obama, the federal government has acquired $6.846 trillion in tax revenues and other receipts, and it has spent $10.711 trillion — 56 percent more than it has had available to spend.”

Read the Congressional Research Service here,
[Read more…]

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Federalism and Canada

Chris Edwards, writing on We Can Cut Government: Canada Did, brings up a very important point,

THE FEDERALISM ADVANTAGE

One of Canada’s strengths is that it is a decentralized federation. The provinces compete with each other over fiscal and economic matters, and they have wide latitude to pursue different policies. Federalism has allowed for healthy policy diversity in Canada, and it has promoted government restraint.

Government spending has become much more centralized in the United States than it has in Canada. In the United States, 71 percent of total government spending is federal and 29 percent is state-local. In Canada it’s the reverse — 38 percent is federal and 62 percent is provincial-local.

The federalism difference between the countries is striking with regards to K-12 education. While federal control over U.S. schools has increased in recent decades, Canada has no federal department of education. School funding is left to the provinces, which seems to work: Canadian school kids routinely score higher on international comparison tests than do U.S. kids.

The countries also differ with regards to the amount of top-down control exerted on subnational governments through federal aid programs. The United States has a complex array of more than 1,000 aid-to-state programs for such things as highways and education. Each of these aid programs comes with a pile of regulations that micromanage state and local affairs.

By contrast, Canada mainly has just three large aid programs for provincial governments, and they are structured as fixed block grants. It is true, however, that one of these grants helps to fund the universal health care system, which is a big exception to the country’s generally decentralized policy approach. Nonetheless, having just a few large block grants is superior to the U.S. system of a vast number of grants, each with separate rules and regulations.

A final federalism advantage in Canada is that provincial and local taxes are not deductible on federal individual tax returns. That structure promotes vigorous tax competition between the provinces. In the United States, state and local income and property taxes are deductible on federal income tax returns, which has the effect of blunting competition by essentially subsidizing hightax states and cities.

Go read the whole article.

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Bipartisan!

Obama budget defeated 99-0 in Senate

President Obama’s budget suffered a second embarrassing defeat Wednesday, when senators voted 99-0 to reject it.

Coupled with the House’s rejection in March, 414-0, that means Mr. Obama’s budget has failed to win a single vote in support this year.

Not one Democrat vote for it.

The Democrats have not passed a budget in 3 years.

But Jay Carney calls it “a Republican gimmick”,

Unanimous rejection, Jay. No gimmick.

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Bipartisanship: Obama budget defeated 0-414

The vote came as the House worked its way through its own fiscal year 2013 budget proposal, written by Budget Committee Chairman Paul D. Ryan. Republicans wrote an amendment that contained Mr. Obama’s budget and offered it on the floor, daring Democrats to back the plan, which calls for major tax increases and yet still adds trillions of dollars to the deficit over the next decade.

“It’s not a charade. It’s not a gimmick — unless what the president sent us is the same,” said Rep. Mick Mulvaney, a freshman Republican from South Carolina who sponsored Mr. Obama’s proposal for purposes of the debate. “I would encourage the Democrats to embrace this landmark Democrat document and support it. Personally, I will be voting against it.”

But no Democrats accepted the challenge.

Meanwhile,

The U.S. government’s debt on Monday was $15.544 trillion, and the government is projected to run a deficit of roughly $1.2 trillion in the year ending Sept. 30.

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Hoyer: Budget? We don’t need no steekeen budget!

Hoyer: ‘The Fact Is You Don’t Need a Budget’

At a briefing with journalists on Capitol Hill on Tuesday, Hoyer was asked, “Mr. Hoyer, around the same time of the State of the Union [on Jan. 24], I think it was the same day, Republicans were trying to hit Senate Democrats for 1,000 days without passing a budget, and then you talk about this milestone today, 400 days without a jobs bill in the Republican House. But then on Friday [Democratic Senator Harry] Reid said that he didn’t think they needed to bring a budget to the floor this year [and that] the Budget Control Act can serve as a guideline.”

Hoyer said: “What does the budget do? The budget does one thing and really only one thing: It sets the parameters of spending and discretionary caps. Other than that, the Appropriations committee are not bound by the Budget committee’s priorities.”

He continued: “The fact is, you don’t need a budget. We can adopt appropriations bills. We can adopt authorization policies without a budget. We already have an agreed-upon cap on spending.”

Don’t expect the Dems to agree to anything resembling a budget this year, either. Allahpundit makes the point,

Why waste time developing a strategy for fiscal sustainability when we can just muddle along with piecemeal appropriations unto death? Carney’s argument is slightly better: The debt-ceiling deal last August has already provided some budgetary parameters via the automatic cuts that went into effect once the Super Committee failed. And of course Obama will offer his own feeble budget proposal which Reid will dutifully support, so why bother making Senate Democrats come up with a plan of their own when it’ll inevitably fail in the House? Remember, Congress can’t even reach a deal on penny-ante matters like the payroll tax holiday; nothing will break the logjam on grander budgetary priorities except electoral clarity in the fall. As such, budget proposals these days are really just oppo material for the other team’s campaign: No doubt The One would happily decline to propose one of his own if he thought the RNC’s ad team would let him get away with it. So instead he’ll do what he did last year, i.e. introduce a plan that’s so shamefully irresponsible on the core issue of entitlements that even original Obama superfan Andrew Sullivan will be left shaking his head. And Reid will cheer him all the way.
…
A commenter wonders: If it’s all about gridlock, why didn’t Democrats pass a budget in 2010 when they still controlled both chambers? Answer: Because they’re gutless, of course. 2010 was an election year and the country was in a lather about spending. If they had passed a gargantuan new Democratic budget, the GOP would have destroyed them over it. If they had passed a budget that dramatically cut spending, their base would have destroyed them over it. No doubt they’d pass nothing again this year if they still controlled the House. But for the moment, because of gridlock, the question is moot. Nothing’s getting passed. Hence the 10 percent figure.

The problem is uncertainty: As Bernake states, “Is uncertainty a negative for growth? I think it is, because firms like to have certainty, like to be able to plan…and we need to make regulations as clear and as effective as possible.”

Which is exactly what we won’t be getting, this year at leasts.

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The out-of-touch State of the Union

If you read or watched the SOTU, all you can conclude is that the words spoken are out of touch with reality.

Fact Checking the SOTU: Corporate Taxes

Let’s do some fact checking on President Obama’s corporate tax comments in last night’s State of the Union.

Claim: “Right now, companies get tax breaks for moving jobs and profits overseas.”

False: There are no such breaks. Instead, we punish U.S. and foreign businesses for investing and creating jobs here.

Claim: “If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.”

False: There is no such tax deduction.

Claim: “No American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas.”

False: America is not a prison camp. Besides, imposing a 40-percent tax rate on corporations that invest here is not a “fair share.”

Claim: “From now on, every multinational company should have to pay a basic minimum tax.”

False: We’ve already got a corporate “alternative minimum tax,” and it’s an idiotic waste of accounting resources that ought to be repealed.

Clearly, Obama can not run on his record,

And more,

And that doesn’t count the recycling,

So he’ll blame Congress, even when This President has been “obstructed” less than anyone since LBJ.

The fact is,

People are hurting, and badly. The official unemployment rate may have fallen, slightly, but the real unemployment rate — the number of working-age Americans who aren’t working — rose from about 12% before the 2008 crisis, to about 23%, and hasn’t come down. That includes people who have retired early because they can’t find work, spouses who used to earn a second income but have gone back to homemaking because work isn’t available, self-employed people whose businesses have collapsed, young people who live in their parents’ basement because they can’t afford tuition and can’t find work.

(h/t Instapundit)

As for the energy part, check out what the Institute for Energy Research has to say.

While you’re at it, Warren Buffett profited from the Obama administration’s decision to deny the Keystone Pipeline. Guess whose secretary was sitting next to the First Lady?

UPDATE,
TigerHawk put the SOTU through the shredder. Go read it all


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