Obama’s very big, brand-new idea on entitlement reform is …

posted at 12:55 pm on April 11, 2011 by Ed Morrissey

The Wall Street Journal offers a sneak peek at the Barack Obama plan to balance the budget and cut entitlement spending, but it’s hardly an exclusive.  It’s more of a rehash of last year’s argument on fiscal policy:

President Barack Obama will lay out his plan for reducing the nation’s deficit Wednesday, belatedly entering a fight over the nation’s long-term financial future. But in addition to suggesting cuts—the current focus of debate—the White House looks set to aim its firepower on a more divisive topic: taxes.

In a speech Wednesday, Mr. Obama will propose cuts to entitlement programs, including Medicare and Medicaid, and changes to Social Security, a discussion he has largely left to Democrats and Republicans in Congress. He also will call for tax increases for people making over $250,000 a year, a proposal contained in his 2012 budget, and changing parts of the tax code he thinks benefit the wealthy.

“Every corner of the federal government has to be looked at here,” David Plouffe, a senior White House adviser, said Sunday in one of multiple television appearances. “Revenues are going to have to be part of this,” he said, referring to tax increases.

Didn’t we already have this fight?  Obama agreed to postpone an income-tax hike on the higher bracket until the end of 2012, a deal that made sense for him for two reasons.  First, it allowed some time for people to relax and allow investment to flow before arguing over income and capital gains again, which would have strengthened the economy a little ahead of the 2012 elections.  Obama clearly wanted to gain some economic traction before lowering the boom again, and the new timing would have allowed Congress to fight over the tax hikes in the aftermath of national elections instead of before them.

But there’s another problem with pushing for these tax hikes besides politics … basic math.  The tax hikes won’t solve the problem, and will probably make it worse:

Eliminating the Bush tax cuts for the highest earners, however, will only put a small dent in the projected deficit.

Republicans contend that raising top rates would hurt small businesses and cut into cash that might otherwise turn into consumer spending. Mr. Ryan said on NBC’s “Meet the Press” Sunday that “If you go down the tax increase path you’re sacrificing the economy.”

We don’t have a revenue problem, or at least not one unrelated to the economic turndown, which has resulted in much lower tax receipts than estimated.  We have a spending problem, one that would only get solved through massive tax hikes across the entire spectrum of taxpayers.  Those kinds of new taxes would dampen economic activity and come up short on revenue.  Furthermore, as the debate in December showed, people understand that we need to encourage private-sector investment to grow an economy rather than have the public sector seize more and more capital.  Even without the seizure — the money all came from borrowing, adding to the debt — the $800 billion Porkulus did nothing to correct unemployment and had no permanent effect on the economy.

If Obama’s big, new Budget 2.0 rollout consists of the same tax hikes he gave up in December, the White House shouldn’t be terribly surprised to see it received with the same enthusiasm as Democrats who ran on that policy in the midterm election.


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Comment pages: 1 2

underceij on April 11, 2011 at 1:29 PM

People, this is the new Plouffe troll. Read and observe what Obama’s paid puppets are going to be saying over the next few days and be ready to refute it.

We have a spending and a revenue problem.

No. The cost of government in this country has reached unsustainable levels of GDP. Any attempts to “increase revenue” are taking money from productive businesses and individuals and will cripple our economy. Barack Obama stated that increased taxes were bad for our economy in December; why is he suddenly demanding them now?

The top 1% of income earners in this country hold 25% of the money.

And also pay an overwhelming majority of the income taxes.

There is no way we can run a sustainable government by not taxing their money at an increased rate over and above people earning less than $1 million.

Nearly half of the United States population pays no taxes at all — while, based on government spending patterns, receiving the bulk and majority of government benefits.

It is not “sustainable” to take money away from people who are working and paying taxes to give to those who are doing neither. It is allowing people to avoid responsibility and is purchasing votes.

Ryan’s budget places the burden of closing the deficit primarily on poor, old, and disabled people. That is morally unacceptable.

No. What is “morally unacceptable” is requiring people to pay for benefits they will never receive, as is the case under Obama’s budget. Working-class Americans are being bled dry so that Obama can hand out favors and subsidized housing to illegal immigrants like his Auntie Zeituni.

67% of the reductions need to come from entitlement reform and reductions in defense spending, and 33% need to come from raising taxes on millionaires.

Wrong. Overspending does not justify punishing those who did not do the overspending. Government needs to reduce in size and services immediately.

It’s important to remember, income taxes are graduated, so Warren Buffet is taxed at the same rate on the first $10,000 he earns as someone whose annual income is only $10,000.

Incorrect. Income taxes are assessed based on total income, not a graduated amount. You are confusing, perhaps deliberately, Social Security benefit payments in order to make a duplicitous argument.

Raising his marginal tax rate on the $50 billionth dollar he earns in a year to 45% isn’t as bad as it sounds, not nearly as bad a telling a 67-year-old with cancer that beyond the voucher they receive from the gov’t they’ll have to pay for their healthcare with their SS check.

Notice the diffusion of responsibility. The liberal in this case makes up a story to justify taking money from someone else to solve a hypothetical situation.

The fact that liberals would never reach into their own pocket and in fact would leave this 67-year-old to die is obvious. Liberals do not care about the poor; they only care about creating more poor with their job-killing and money-stealing taxation schemes.

That will exacerbate healtchare-rationing based on who has the most money.

There will be no rationing. Obamacare will be repealed shortly, and Americans will, with Ryan’s budget, have more options to purchase the health care that suits their situation, rather than being forced into plans that do not and having care systematically denied them per Obama’s plan.

northdallasthirty on April 11, 2011 at 2:53 PM

El Rushbo played clips of Dingy Harry telling us how much it would damage our economy and put us in danger if Congress votes to raise the credit limit. This is from 2005-06 obviously.

Now the world will end if we don’t raise it.

slickwillie2001 on April 11, 2011 at 2:55 PM

Its the Spending, Stupid

txmomof6 on April 11, 2011 at 3:01 PM

Incorrect. Income taxes are assessed based on total income, not a graduated amount

Wrong.

Nearly half of the United States population pays no taxes at all

Also wrong.

crr6 on April 11, 2011 at 3:06 PM

Lets start by going back to 2008 levels and REMOVE the TARP FROM THE BUDGET baseline…

That is NON-NEGOTIABLE… PERIOD.

Khun Joe on April 11, 2011 at 3:18 PM

Nearly half of the United States population pays no taxes at all
Also wrong.

crr6 on April 11, 2011 at 3:06 PM

Sweetie,

Look at the tax code… figure out who makes REPORTABLE income (hint: the illegal alien selling bags of oranges on the street corner in East LA does not have a taxpayer ID on file with the Feds or Sacramento) and do the math…

Khun Joe on April 11, 2011 at 3:20 PM

Rush had a caller earlier who stated that in the month of March Fedzilla spent EIGHT TIMES the amount of money they took in.

Shut It Down!!

Naturally Curly on April 11, 2011 at 3:25 PM

As usual, Obama’s promises come with a movable expiration date.

College Prof on April 11, 2011 at 3:32 PM

Nearly half of the United States population pays no taxes at all
Also wrong.

crr6 on April 11, 2011

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

SoonerMarine on April 11, 2011 at 3:37 PM

SoonerMarine on April 11, 2011 at 3:37 PM

But they paid tax on their cigarettes and gasoline.

/says crr6 completely missing the point.

Scrappy on April 11, 2011 at 3:39 PM

SoonerMarine on April 11, 2011 at 3:37 PM

Ok, so nearly half pay no federal income tax. Northdallasthirty said nearly half pay no taxes at all.

As I pointed out, that’s incorrect. Many still pay federal payroll taxes, as well as various state and local taxes.

crr6 on April 11, 2011 at 3:40 PM

One can see based on their response what talking point explosion terrifies the trolls most.

Crr6 doesn’t like the point that nearly half of all Americans do not pay income tax. Why? Because it strikes at the heart of their whining about “fair share” by demonstrating that liberals do not in fact want to pay ANY taxes for the welfare state they demand.

Crr6 does not want to pay its fair share; it wants everyone else to pay for it. As is seen by John Kerry, Tim Geithner, Kathleen Sebelius, and Charles Rangel, the Obama Party and its members like Crr6 do not pay their taxes.

Do you think this is justified, Crr6? Why do you support politicians who do not pay their taxes? Why won’t you increase your payments to at least 50% of your income? What gives you the right to hold your own money, when you have insisted the government should take wealth from people and redistribute it to anyone that makes less money than you do?

And the next one is the whole spiel about the income tax being “graduated”. Yes it is — on final levels of income. But again, since Crr6 openly supports and endorses tax-dodging, as we see from Crr6′s support of John Kerry, Kathleen Sebelius, and others, Crr6 supports and endorses millionaires dodging taxes as long as they are Obama Party members.

northdallasthirty on April 11, 2011 at 3:44 PM

But they paid tax on their cigarettes and gasoline.

/says crr6 completely missing the point.

Scrappy on April 11, 2011 at 3:39 PM

Ok, so nearly half pay no federal income tax. Northdallasthirty said nearly half pay no taxes at all.

As I pointed out, that’s incorrect. Many still pay federal payroll taxes, as well as various state and local taxes.

crr6 on April 11, 2011 at 3:40 PM

Right on cue.

Scrappy on April 11, 2011 at 3:46 PM

northdallasthirty on April 11, 2011 at 3:44 PM

I know it’s the internet and all, but sometimes it’s ok to just say: “I was wrong.”

crr6 on April 11, 2011 at 3:47 PM

Yes, Crr6, and the fact that you can’t acknowledge that you are wrong or that you support and endorse not paying your taxes speaks volumes for the lack of quality and responsibility that you have.

Don’t worry. No one expects you to practice what you preach and pay your taxes, or to force your Obama Party masters to pay theirs. We’re all aware that you don’t believe in following the law.

northdallasthirty on April 11, 2011 at 3:50 PM

Yes, Crr6, and the fact that you can’t acknowledge that you are wrong

Woah. You totally turned that around on me.

crr6 on April 11, 2011 at 3:53 PM

Can’t you stick to the topic, Crr6? Why don’t you believe in paying taxes? Why won’t you contribute your “fair share”? Don’t you agree that your Obama Party politicians such as John Kerry, Kathleen Sebelius, Timothy Geithner, Charles Rangel, and Claire McCaskill who don’t pay their taxes are cheats and hypocrites?

northdallasthirty on April 11, 2011 at 3:57 PM

Go Northdallasthirty!

Free Indeed on April 11, 2011 at 3:58 PM

El Rushbo played clips of Dingy Harry telling us how much it would damage our economy and put us in danger if Congress votes to raise the credit limit. This is from 2005-06 obviously.

Now the world will end if we don’t raise it.

slickwillie2001 on April 11, 2011 at 2:55 PM

All of those morons that politically postured about not raising the debt limit back before the Dems got Congress in the 06 election left sound bites that will bite them in the a$$ now. They were posturing back then just to put the cost of the war on the table as the issue. Once again, it shows that the Dems just don’t give a rip about the general welfare of our country, as a whole.

They wanted to vote against the debt ceiling increase back when they could politically posture, claiming it was bad for America to have so much debt, then turn around and practically double the debt on the books in the 6 years since they won control of congress (by having the senate, they still basically tie the hands of anyone wanting to reduce spending).

If they had stuck to their dismay over the debt and been modest about their spending since the 05/06 debate, then I would consider them patriotic. As it is, they are just disgusting political opportunists.

karenhasfreedom on April 11, 2011 at 3:58 PM

Can’t you stick to the topic, Crr6?

Because you say things which are demonstrably wrong and you ask stupid questions.

Ah, well. Here goes…

Why don’t you believe in paying taxes?

I do believe in paying taxes.

Why won’t you contribute your “fair share”?

I do believe in paying my fair share.

Don’t you agree that your Obama Party politicians such as John Kerry, Kathleen Sebelius, Timothy Geithner, Charles Rangel, and Claire McCaskill who don’t pay their taxes are cheats and hypocrites?

northdallasthirty on April 11, 2011 at 3:57 PM

Yeah, they should pay their taxes.

Well, that was constructive.

crr6 on April 11, 2011 at 3:59 PM

hello rich people who voted for this maroon…are you happy now?

cmsinaz on April 11, 2011 at 1:26 PM

Have you noticed the rich liberal trend? Liberal rich people saying “tax me more”… except… they’ve already reaped their wealth. They don’t care because it only affects those trying to become successful. No effect on those who already succeeded.

dominigan on April 11, 2011 at 4:00 PM

I do believe in paying my fair share.

No you don’t.

You see, Crr6, you don’t pay at least 75 – 90% of your income in taxes, which is what you insist is the “fair share” for people to pay.

And that puts the lie to this:

I do believe in paying taxes.

Obviously you don’t, since you’re not paying your “fair share” of 75 – 90% of your income.

Yeah, they should pay their taxes.

But they didn’t, and you supported them not paying their taxes.

Why don’t you believe in paying taxes, Crr6? Why do you support and endorse people like Sebelius, Kerry, Rangel, Geithner, and McCaskill who don’t pay their taxes?

northdallasthirty on April 11, 2011 at 4:05 PM

I know it’s the internet and all, but sometimes it’s ok to just say: “I was wrong.”

crr6 on April 11, 2011 at 3:47 PM

Take your own advice, tool.

Because you say things which are demonstrably wrong

crr6 on April 11, 2011 at 3:59 PM

Er, yeah. I’m pretty sure Ryan’s ideas for entitlement reform are just a rehash of Gingrich’s failed proposals from the 1990′s.
So there’s that.
crr6 on April 11, 2011 at 1:07 PM

Failed? When did they go into effect?
Scrappy on April 11, 2011 at 1:22 PM

Failed as in they weren’t adopted.
crr6 on April 11, 2011 at 1:25 PM

For something to have failed it must have been tried.
Higher taxes have been tried and failed.
So there’s that.
Scrappy on April 11, 2011 at 1:42 PM

PWNED!
fossten on April 11, 2011 at 1:49 PM

Or you can just disappear for a couple hours and pretend like it never happened instead of saying “I was wrong”

Scrappy on April 11, 2011 at 4:05 PM

Have you noticed the rich liberal trend? Liberal rich people saying “tax me more”… except… they’ve already reaped their wealth. They don’t care because it only affects those trying to become successful. No effect on those who already succeeded.

And actually, they won’t go out and voluntarily contribute their “fair share” of 75 – 90% of their wealth like they want to impose on everyone else.

But why should they? They know the puppets like Crr6 who are owned and operated by the Obama Party would never force them to actually pay their bills. Only honest, hardworking Americans pay their bills, and the liberal rich do not fall into that category.

northdallasthirty on April 11, 2011 at 4:06 PM

Ok, so nearly half pay no federal income tax. Northdallasthirty said nearly half pay no taxes at all.

As I pointed out, that’s incorrect. Many still pay federal payroll taxes, as well as various state and local taxes.

crr6 on April 11, 2011 at 3:40 PM

Are you talking about federal payroll withholding here?

a capella on April 11, 2011 at 4:12 PM

I do believe in paying my fair share.

crr6 on April 11, 2011 at 3:59 PM

Please define “fair”. Liberals throw this term around, and most don’t have the slightest clue what it actually means.

The dictionary defines “fair” as “free from bias, dishonesty, or injustice”.

In this case it seems that only a flat tax meets that definition since it is neither biased against poor or rich… both pay the same percent.

So how do you define fair?

dominigan on April 11, 2011 at 4:15 PM

Are you talking about federal payroll withholding here?

a capella on April 11, 2011 at 4:12 PM

Apparently she’s never heard of getting a refund back from taxes!

dominigan on April 11, 2011 at 4:16 PM

Obama’s plan sucks so bad that crr6 won’t even bother defending it…instead she’s just feebly attacking Ryan’s plan.

So, crr6, what’s the liberal plan for preventing government bankruptcy?

gwelf on April 11, 2011 at 4:37 PM

We have a spending and a revenue problem.

No. The cost of government in this country has reached unsustainable levels of GDP.

Any attempts to “increase revenue” are taking money from productive businesses and individuals and will cripple our economy.

northdallasthirty on April 11, 2011 at 2:53 PM

That first paragraph is the most important thing to glean from what you posted.

taking money from productive businesses and individuals and will cripple our economy.

It’s readily apparent that Leftists either don’t understand this simple economic fact OR they see this as a feature and not a bug.

One really gets the impression from the Left that if the same circumstances that (conveniently) befell the country in 2008 and helped elect our Dear Reader, that the same “Oh please Democrats! Help us” attitude will happen again.

Well there is a big difference this time – this time the Socialist-Progressive Democratic Party will have had the reins of power for a number of years with only the Republicans having only control of House for a few months.

How are the Leftists going to blame this on Booosshh?

Lies can only get you so far and eventually the truth will out.

The Left can only offer the sane old demented agenda of wealth redistribution – even now they should have at least figured it out, that doesn’t work.

So what else do they have?

Care to take crack at that one crr6?

Chip on April 11, 2011 at 5:00 PM

Democrats: Party of Envy and Sloth!!!

landlines on April 11, 2011 at 5:23 PM

Love that picture of Obama, Ed. Ya gotta use this one sometime too!

SG1_Conservative on April 11, 2011 at 5:37 PM

Northdallas/Chip 2012!

countrybumpkin on April 11, 2011 at 5:57 PM

What’s that phrase I’m searching for? Oh, yeah:

“Stuck on Stupid”

in_awe on April 11, 2011 at 6:15 PM

I just looked at the zeros in our budget. 3.6 trillion budget and 38 billion in cuts.

I put these 2 numbers in a spreadsheet since they are incomprehensible. Then I began to lop off the zeros.

Our budget deal is the equivalent of taking a 38 CENT paycut in a 36,000 per year salary. Wow, that hurts so much, where do we begin to make cutbacks in our expense? Geeze, that won’t even buy an item on the McDonald’s dollar menu.

Sigh.

Puts things in perspective about raising the debt ceiling. We need to all be just whooping a$$ mad about this.

karenhasfreedom on April 11, 2011 at 8:33 PM

…and crr6 runs off again.

fossten on April 11, 2011 at 8:56 PM

Nearly half of the United States population pays no taxes at all

Also wrong.
crr6 on April 11, 2011 at 3:06 PM

Here you go spewing incorrect “facts” or just the libtard talking points. Even the sacred NYT gets it right, Doh!!
You are the one that is wrong!

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

belad on April 12, 2011 at 8:03 AM

If you give Obama and his merry band of Marxists more money they’ll simply spend more money. Those that have earned their wealth within the law owe them nothing. These liberals need to stop their incessant whining and find something constructive to do. What does it take before they learn . . . communism has failed so stop trying to bring it to this country.

rplat on April 12, 2011 at 8:31 AM

Yeah, they should pay their taxes.
crr6 on April 11, 2011 at 3:59 PM

They, like you, claim they do. Fact is, the top 2% of earners in the US pay over 90% of the taxes at a confiscatory rate.

The top earners are mobile. Keep exsanguinating them and they will leave taking their jobs with them.

Heck, you socialists RETAX earnings when someone dies and tries to leave what’s left to their families!

Parasitic thief, your name is democrat.

dogsoldier on April 12, 2011 at 1:29 PM

It’s important to remember, income taxes are graduated, so Warren Buffet is taxed at the same rate on the first $10,000 he earns as someone whose annual income is only $10,000. Raising his marginal tax rate on the $50 billionth dollar he earns in a year to 45% isn’t as bad as it sounds…

underceij on April 11, 2011 at1:29PM

Buffett once remarked that his secretary pays more income tax than he. Now, why do think that is? Could it be that Warren, like other mega-wealthy individuals, has his finances arranged so that he has as little as possible in the way of taxable income?? Why, yes, that could be it, in which case, raising the rates he’s required to pay on that income will do very little for our bottom line. And although Buffett likes to talk a good game when it comes to taxing the rich, just try to squeeze more out of him and watch him pull out all the stops to avoid it.

We don’t have a revenue problem. We have a spending problem. Now, if you want plug up some tax loopholes that advantage Warren and his cohort, have at it. But trying to squeeze more revenue out of them does nothing to address the spending problem.

SukieTawdry on April 12, 2011 at 3:24 PM

underceij on April 11, 2011 at 1:29 PM

The top 1% of earners in the country pay over 50% of the taxes already. Your post is nonsense.

fossten on April 11, 2011 at 1:31 PM

So we double their taxes, and they’ll pay 100%. Problem solved!!!!!

/liberal “thinking”

tom on April 12, 2011 at 8:32 PM

underceij on April 11, 2011 at 1:29 PM

People, this is the new Plouffe troll. Read and observe what Obama’s paid puppets are going to be saying over the next few days and be ready to refute it.
….

northdallasthirty on April 11, 2011 at 2:53 PM

Well, it certainly walks like a duck and talks like a duck. Seems likely it’s exactly what it looks like.

I’m seeing more and more people suddenly start calling for tax increases. Almost as if it were … somehow … coordinated …

But that’s crazy, right?

tom on April 12, 2011 at 8:41 PM

Read our lips! No new taxes.

Also, no new euphemisms, like “revenue enhanchment,” “tax code simplification,” etc.

flataffect on April 13, 2011 at 12:38 PM

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