14 February 2011

Obama Fussbudget Over Timid FY 2012 Proposal

The White House submitted its 2012 Fiscal Year Budget proposal to Capitol Hill.  The $3.75 Trillion budget proposal ignores the $4 trillion of recommended cuts contained in the bipartisan Debt Commission report that the Obama Administration received in December.

The Lamestream Media lauds that deficit hawk Obama Administration is cutting $1.1 Trillion over 10 years.  But when you take off the emerald colored glasses when looking at the Emerald City, it turns out that this is only $775 million in FY 2012.  Putting that into perspective, that is less than 1/10 of one percent of the federal budget.  Oh, but the big savings would occur after Obama’s re-election.  How convenient!

And the left is in an uproar because the cuts detailed are slated to hit the working poor, home heating assistance programs and graduate education programs.  The dirty little secret is that these proposed hard nosed cuts would never survive the scrutiny of Congressional forces seeking re-election by supplying the income redistribution gravy train.

When President Obama gave his 2011 State of the Union Address, he sought to win the future by reinventing himself as a fiscal hawk.  Two weeks ago, President Obama proposed a five year across the board domestic spending freeze, that supposedly would save $400 Billion.  Of course, this does not consider all of the pork and budgetary increases that were baked into federal agencies over the last couple of years.  Moreover, congressional budget hawks allege that it fails to account for dubious domestic spending that was surreptitiously included in Department of Defense spending (Climate Change, children’s health etc.).

But the freeze in domestic spending did not last very long. The budget calls for a $22 Billion increase in discretionary spending over FY 2010 levels.  And last week, the Obama Administration was publicizing its proposal to spend an additional $53 Billion on American Passenger Rail infrastructure “investments”.

Despite the cut in graduate education grants, the Obama budget is asking for $4.3 Billion for teacher improvement, $900 million for the “Race for the Top”, $350 million for early learning increases and a “paltry” $80 million to push for more math and science teachers.  So for a period of alleged fiscal austerity, the Obama Administration wants to increase federal education spending by 38%.  While this proposed 38% increase in federal education spending, Obama’s OMB should allocate re-education resources on vocabulary lessons and basic math.  Austerity does not belong with funding increases. Freezes in domestic spending does not equal a 38% raise in the DOE budget.

The Obama OMB dream machine tries to pay for this budget not only with phantom cuts but also with tax increases that Congress has rejected since 2006.  Obama’s budget includes tax increases for oil, gas and coal producers, at a time when conventional energy sources are at risk.  The budget anticipates letting the Bush era tax rates expire after 2012.  Moreover, the wealthy would have their deductions slashed.  The Americans for Tax Reform estimates that such changes would cost 4 million taxpayers $26,000 per annum.  In less than a day, wonks have identified 15 “hidden” tax increases that could total up to $1.5 trillion over 10 years.

Even moderate Democrats like Sen. Kent Conrad (D-ND) are bristling over the partisanship of the Obama Budget proposal and the belief that real cuts are necessary.  But Conrad is not running for re-election so he can afford to be real.  It seems that the Obama Administration fussed over the small stuff which in the end won’t matter and fudged the important stuff.  For those of us who plan to remain Between the Beltways, we must take off our emerald glasses and stop treating the Capital as Fantasyland on the Potomac and do some plain talking to achieve real results to save us from drowning in debt.

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