Obama’s smoke and mirror budget
The Patriot Post and the Heritage Foundation have analyzed Obama’s, two month late, $3.8 trillion budget, which relies on further tax increases on the wealthy, despite his having just won a $660 billion tax increase on top earners at the beginning of the year because of the fiscal cliff.
But not to worry, Obama said yesterday at the White House, “There’s not a lot of smoke and mirrors in here.” His 2014 budget is nothing but smoke and mirrors. No wonder not one congressman from either party voted for his last budget proposal.
The president claims $1.8 trillion in so-called deficit reduction over a decade, but all of the supposed deficit reduction is achieved through tax increases. Replacing sequester cuts, which are already in place, is $1.2 trillion of the $1.8 trillion dollars in so- called cuts.
The budget increases taxes 1.1 trillion dollars and not just on the rich. Cigarette taxes increase to $1.95 per pack (from $1.01 now and $0.39 when he took office) to pay for preschool for all four-year-olds from low- and moderate-income families - yeah right!
The tax increases are not used to reduce the deficit but for almost $1 trillion in new spending. The deficit is never reduced over the next 10 years, even when it includes the 8% annual increase in the baseline budget each year calculated by the CBO – just more spending.
The deficit will increase by $5.3 trillion under his plan over 10 years but since he was off by almost $1.6 trillion on his first five-year projection, the deficit would be over $24B by 2023. Only in Washington, would this result add up to a reduction in the deficit Mr. President.
As interest rates climb over the next 10 years, the administration projects interest on the debt will rise from $223 billion in the current fiscal year that ends Sept. 30 to $763 billion in 2023. That’s an increase of 242 percent.
The Congressional Budget Office forecast has interest on the debt rising to $857 billion by 2023, up about 282 percent over 10 years.
More smoke and mirrors. At best, the growth in the deficit would not increase as fast and in Washington this is a “cut” in the deficit.
The budget is $240 billion higher than the House budget and even $80 billion higher than the Senate Democrats’ budget.
He trims defense spending growth by a further $100 billion over 10 years, bringing it to just 2.4 percent of GDP — lower than any year since before World War II. That’s a disastrous gamble that displays the commander in chief’s contempt for his constitutional duty to ensure national defense.
His budget caps tax-free retirement savings because, as the White House explains, some people are putting away “substantially more than is needed to fund reasonable levels of retirement savings.”
Obama proposes to “limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013.”
So now, the Obama budget even decides how much of your own money you can save for retirement? We are on a slippery slope, folks.