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Budget Resurrects His Failed $1.5 Trillion Tax Hike

RNC Communications - February 7, 2012

Today, President Obama’s FY2013 is officially late, again, as the White House shirks its legal obligation to submit a budget by the first Monday in February. Last night, The Wall Street Journal reported that we won’t be missing much as the president intends to repackage his failed deficit proposal from last fall as his FY2013 budget. That proposal included a $1.5 trillion tax hike that many Democrats rejected and failed to outline a plan for containing the nation’s budget-busting entitlement programs.

Obama Plans To Re-Release His Lackluster Joint Deficit Reduction Committee Proposal As His FY2013

NOW, AGAIN: Obama’s FY2013 Is Essentially The Same Framework He Proposed In September Which Included $1.5 Trillion In New Taxes. “President Barack Obama will release his budget plan next week, calling for $3 trillion in deficit reductions over 10 years, including $1.5 trillion in tax increases to fall mostly on the wealthiest Americans. If that sounds familiar, it's because the president essentially laid out his budget plan in September, following a failed bipartisan deficit-reduction deal.” (Laura Meckler, “Budget Plan Has Familiar Ring,” The Wall Street Journal, 2/7/12)

THEN: USA Today: “The Plan’s Flaws Are Troubling.” “But the plan's flaws are troubling. It pretends that enough money can be raised simply by raising taxes on the rich. It can't. There aren't enough of them. Nor does the president's plan match his promise to ‘live within our means’ and ‘pay down’ debt. Even if it were fully enacted, the nation would add $6 trillion in debt over the next 10 years.” (Editorial, “Editorial: Politics Takes Priority In Obama’s Deficit Plan,” USA Today, 9/19/11)

  • Even If Every Part Of Obama’s Deficit Reduction Proposal Was Enacted, The Deficit At The End Of His First Term Would Still Have Been $1.33 Trillion. (“The President’s Plan For Economic Growth And Deficit Reduction; Table S-3,” Office Of Management And Budget, 9/19/11)

Independent Budget Experts Said Obama’s Debt Plan Fell Short Of Its Advertised Savings. “President Obama projects that his new plan for reducing the federal debt will save more than $3 trillion over the next decade by raising taxes on the wealthy and slashing spending on a host of government programs, from farm subsidies to federal worker pensions. But independent budget experts said the blueprint that Obama unveiled Monday — which White House officials say would save more than $4 trillion when added to earlier budget deals this year — appears to fall short of his target.” (Lori Montgomery And Jia Lynn Yang, “Budget Analysts Say Obama Deficit Plan Is Likely To Miss Its Targets,” The Washington Post, 9/19/11)

The Washington Post: “The Administration’s Claim To Have Come Up With $4 Trillion In Deficit Reduction Is Misleading. The More Accurate Amount Is Barely Half That …” “The administration’s claim to have come up with $4 trillion in deficit reduction is misleading. The more accurate amount is barely half that, including about $1 trillion in domestic and security spending cuts already agreed to as part of the debt ceiling deal, and $1.5 trillion in tax increases on the wealthy.” (Editorial, “In Debt Plan, Mr. Obama Goes ‘Medium’,” The Washington Post, 9/19/11)

  • WP: “The administration gives itself credit for another $1 trillion by counting savings — already incorporated in any realistic base line — from winding down military operations in Iraq and Afghanistan. (Editorial, “In Debt Plan, Mr. Obama Goes ‘Medium’,” The Washington Post, 9/19/11)
  • WP: “The administration further pads its results by giving itself credit for $866 billion in ‘savings’ from letting the George W. Bush tax cuts expire for those making more than $250,000 a year.” (Editorial, “In Debt Plan, Mr. Obama Goes ‘Medium’,” The Washington Post, 9/19/11)

Obama’s Plans For Higher Taxes Hit A Roadblock Among Democrats In Congress

NOW, AGAIN: Obama Plans To Repeal The Tax Cuts For Families Earning More Than $250,000 And Would Pile More Taxes On Top Of That For Those Earning Over $1 Million A Year. “On taxes, about half the $1.5 trillion in revenue comes from ending Bush-era tax cuts for families earning more than $250,000 a year. Much of the rest comes from additional tax increases on families earning over $1 million a year, by taking away popular deductions and mandating a minimum 30% effective tax rate. Mr. Obama would end certain tax breaks for corporations, including breaks for oil and gas companies, as well as benefits for those who use corporate jets.” (Laura Meckler, “Budget Plan Has Familiar Ring,” The Wall Street Journal, 2/7/12)

THEN: Senate Democrats Rejected Obama’s Tax On Incomes Over $250,000, Instead Proposing A Surtax For Incomes Over $1 Million. “And on Wednesday came clear evidence of this shift: Senate Democratic leaders scrapped Obama’s proposal to cover the cost of his jobs bill by raising taxes on income over $250,000 a year, the old Democratic standard for defining the wealthy. Instead, they are proposing a 5.6 percent surtax on annual income of more than $1 million.” (Lori Montgomery, “Democrats Shift The Definition Of ‘Rich’ In Battle Over Taxes,” The Washington Post, 10/5/11)

Sen. Chuck Schumer (D-NY) Does Not Support Obama’s Tax On Incomes Over $250,000 Because That Is “Firmly In The Middle Class” And “Not Rich.” “But the president also wanted to raise taxes on families making more than $250,000 a year by limiting income-tax deductions they can take. That didn’t sit well with rank-and-file Democrats. Schumer said families that earn $250,000 or $300,000 a year aren’t rich enough to deserve extra taxes. He described them as ‘firmly in the middle class. They are not rich, and in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that’s associated with wealth in America,’ he said.” (S.A. Miller, “Million-Dollar Idea,” New York Post, 10/6/11)

  • Sen. Charles Schumer (D-NY) Said That Raising Taxies On Families Over $250,000 “Fuzzies The Picture.” “Democrats have long argued that, in addition to cutting government spending, lawmakers should ask people at the top of the income spectrum to pay more in taxes to help tame the national debt. But setting the dividing line at $250,000, as Obama did during the 2008 campaign, ‘fuzzies the picture,’ said Sen. Charles E. Schumer (D-N.Y.), the leading architect of the surtax proposal.” (Lori Montgomery, “Democrats Shift The Definition Of ‘Rich’ In Battle Over Taxes,” The Washington Post, 10/5/12)
  • Sen. Schumer Said Obama’s Tax Plan Would Unfairly Affect The New York Metropolitan Area. “Schumer said the $250,000 limit is unacceptable since it will hit the metropolitan area disproportionately because of the high cost of living here. ‘$250,000 makes you really rich in Mississippi but it doesn’t make you rich at all in New York and there ought to be some kind of scale based on the cost of living on how much you pay,’ Schumer said.” (“Sen. Schumer Expresses Reservations About President Obama’s Tax Plan,” CBS News, 9/20/11)

Moderate Democrats Offered “Tepid Enthusiasm” For Obama’s Tax Hikes. “Liberals on Monday cheered President Barack Obama’s plan to hike taxes on the wealthy to cut the deficit. But the response from Democrats on the front lines of 2012 election battles? Silence. Or, at best, tepid enthusiasm.” (Scott Wong and Jake Sherman, “Moderate Dems Duck, Cover On Hikes,” Politico, 9/19/11)

  • Sen. Ben Nelson (D-NE): “There’s Too Much Discussion About Raising Taxes Right Now, Not Enough Focus On Cutting Spending.” “Sen. Ben Nelson (D-Neb.), a key moderate who’s up for reelection next year, didn’t mince words: ‘There’s too much discussion about raising taxes right now, not enough focus on cutting spending.’” (Scott Wong and Jake Sherman, “Moderate Dems Duck, Cover On Hikes,” Politico, 9/19/11)

“Most Of The Measures Have Been Pitched By The Obama Administration In Some Form Or Other Since 2009, Yet None Generated Enough Support To Pass Congress — Even When Democrats Controlled Both Houses.” (David Kocieniewski, “Tax Plan For Jobs Bill Has Familiar Ring,” The New York Times, 9/13/11)

  • House Democrats “Wonder How The Proposals — Which Went Nowhere In The 111th Congress, When Democrats Held Majorities In Both Chambers — Can Attract Support Now.” “President Barack Obama's plans to pay for his jobs legislation are facing a cool reception from some House Democrats who wonder how the proposals — which went nowhere in the 111th Congress, when Democrats held majorities in both chambers — can attract support now.” (Jonathan Strong, “Lukewarm Response For Jobs Bill Payment Plan,” Roll Call, 9/14/11)

Obama’s Plan Will Not Tackle The Nation’s Long-Term Fiscal Challenges, Instead It Will Serve As A Political Document For His Reelection Campaign

NOW, AGAIN: Obama Will Not Lay Out A Plan To Control The Nation’s Entitlement Programs In The Long-Term. “However, he isn't proposing the structural changes that experts say are needed to control spending in these programs over the long term. For instance, Mr. Obama won't suggest raising the Medicare eligibility age, as he was willing to do over the summer during bipartisan budget negotiations that failed to produce a deal. He also doesn't plan to propose changes to Social Security.” (Laura Meckler, “Budget Plan Has Familiar Ring,” The Wall Street Journal, 2/7/12)

  • Obama’s Budget “Serves As A Political Document” Rather Than A Plan That Can Actually Pass. “None of Mr. Obama's major proposals are expected to become law before November's elections, given both partisan divides in Congress over priorities as well as election-year politics. Still, the budget proposal serves as a political document in which Mr. Obama will set out his vision for how he would manage government taxes and spending should he win a second term.” (Laura Meckler, “Budget Plan Has Familiar Ring,” The Wall Street Journal, 2/7/12)

THEN: “Suffering An Erosion Of Support From The Broad Coalition That Elected Him, Obama Has Crafted A Plan That Reads More Like A Blueprint For Shoring Up His Restless Democratic Base Than A Vehicle For Reaching Across The Aisle In Search Of Bipartisan Compromise.” (Carrie Budoff Brown and Jennifer Epstein, “Obama To Unveil $3T Deficit Plan,” Politico, 9/18/11)

  • The Plan Was More Of A “Populist” Approach Than “The Compromises He Advocated Earlier This Summer.” “Combined with his call this month for $450 billion in new stimulus, the proposal represents a more populist approach to confronting the nation’s economic travails than the compromises he advocated earlier this summer.” (Zachary Goldfarb, “Obama’s Debt-Reduction Plan: $3 Trillion In Savings, Half From New Tax Revenue,” The Washington Post, 9/18/11)

USA Today: Obama’s Failure To Tackle Entitlement Programs Was “Irresponsible.” “That's mostly because Obama failed to take on the entitlement programs, by far the biggest drivers of future spending. Thanks to a weak economy, Baby Boomer retirees and payroll tax cuts, Social Security is already running in the red. Congressional Budget Office projections show it will add a half trillion dollars to the debt over the next decade, making Obama's refusal to tackle it now irresponsible.” (Editorial, “Editorial: Politics Takes Priority In Obama’s Deficit Plan,” USA Today, 9/19/11)

The Dallas Morning News: Obama “Abdicated Leadership.” “But this newspaper sees problems in his fine points, beginning with his almost total dodge on entitlement reforms. Obama identified only about $300 billion in Medicare and Medicaid savings. And not a single detail about overhauling Social Security. Washington can’t fix the $14 trillion debt problem without overhauling those programs, which are big debt drivers. The president knows all this and simply abdicated leadership.” (Editorial, “Editorial: Gang Of 38 Offers A Better Debt Approach,” The Dallas Morning News, 9/19/11)


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