BHO's Budget

Veronique de Rugy decrypts BHO’s budget. As bad as this thing is, don’t forget that by an amazing coincidence he signed at least two more spending bills before it, one of which was the biggest spending bill in history.
Frankly, I think he’s losing it—throwing everything and the kitchen sink at “the economy,” which, as you know, responds badly to planning and planners.
BHO honestly imagined that he could walk on water. And fin de siècle America, where the Idiot is Lord and Master, facilitated his fantasy. Now BHO is realizing that he is not the magic man he thought he was, after all.

* “the president forecasts a budget deficit of $1.75 trillion in 2009. That represents 12.3 percent of gross domestic product (GDP), making it the highest deficit as a share of the economy since World War II.”
* “In 2009, total spending (mandatory plus discretionary) will reach $3.94 trillion. That’s a 32 percent increase over the 2008 level, one of the biggest year-to-year increases in the past 50 years. It represents 27.7 percent of GDP, a serious hike from the 21 percent level reached in 2008. Much of this increase is the product of the bailout signed by President Bush last fall. It is also the result of the federal takeover of Freddie and Fannie as well as the 2009 share of stimulus spending.”
* “For 2010, the president requests $3.55 trillion in total spending.”
* “Obama’s budget proposes boosting tax collection from about 16.2 percent of the economy this year to 19 percent in 2013. He will do that by allowing some of the 2001 and 2003 tax cuts enacted under Bush to expire on schedule. This affects people in households making more than $250,000 a year. Under the president’s plan, the top two marginal tax rates will increase from 33 to 36 percent and from 35 to 39.6 percent, while both the capital-gains tax and dividend tax will rise from 15 to 20 percent.
In addition, he plans to pay for his new health care ‘reserve fund’ mostly by a $318 billion tax hike over 10 years in the form of reduced deductions—such as the mortgage interest deduction—for the wealthiest Americans. These taxpayers would also see their capital gains tax rates go up.
Businesses would also see their tax burdens increase. Obama plans to raise $353 billion over 10 years through 13 different taxes (new or old). For instance, his budget reinstates superfund taxes, repeals manufacturing tax deductions for oil and natural gas companies, increases the geological and geophysical amortization period for independent producers to 7 years, and eliminates the advanced earned income tax credit.
* “He also proposes to create a new $112 billion tax over the next decade on the energy use and production of every American. This ‘cap and trade’ program is designed to battle global warming by forcing companies to buy permits if they wish to emit heat-trapping pollutants.”

* MEET THE NEXT WAR PRESIDENT: “The United States spent about $190 billion on the wars in Iraq and Afghanistan in 2008. Obama expects that the costs of the Iraq and Afghanistan wars will total just over $140 billion this year. Half of that money has already been appropriated by Congress. Supposedly, the president will make one final ‘supplemental’ budget request to Congress for an additional $75 billion to cover war costs for the rest of 2009.
The main assumption in the defense budget is that the cost of the wars will be $130 billion in 2010 and that it will drop sharply after that, to $50 billion annually beginning in 2011.

* MORE DISSEMBLING. “Despite some improvements from the Bush budgets, Obama’s plan is far from being free of tricks. First, while he told Congress on Tuesday that his budget team has ‘already identified $2 trillion in savings’ over the next decade to help tame record budget deficits, one would be hard press to actually find any programs getting cut. In fact, it appears that about half of the ‘savings’ come from his proposed tax increases. He plans on reducing the deficit by $639.7 billion over 10 years with only his income tax increase and a $311 billion reduction in the debt service.”
“More importantly, the budget ‘saves’ hundreds of billions of dollars by not continuing to spend $170 billion a year in Iraq until 2019. Obama includes war spending in his baseline projections to be able to show a $1.49 billion savings over 10 years. Yet even under the previous administration we were supposed to be out of Iraq by 2012. It’s highly dissembling to say we can get savings by cutting spending that isn’t actually going to occur.”

CONCLUDES Veronique de Rugy: “there is very little to be happy about in Obama’s first budget. It simply expands the Bush policies of bigger government and increased centralization, which threatens to permanently transform America’s culture and economic outlook by making more and more Americans dependent on government.”

The complete article is “The Era of Even Bigger Government.”