Tag Archives: Trillion

Obama’s fiscal cliff plan would increase debt to $20 trillion by 2016

Forbes magazine explains why Obama’s plan doesn’t solve our long-term spending problem.

Excerpt:

The President, while not presenting concrete proposals, has been quite clear on what he wants: to raise taxes on the top two percent, keep the Bush tax cuts for everyone else, offer only vague promises of future spending cuts, and gain the unprecedented authority to raise the debt limit without Congressional approval. He does not plan to reform the entitlements so dear to his heart and his base’s. Instead of less spending, he would like to spend more on “stimulus” and “investments.” Obama knows that physicians will desert Medicare if he cuts their compensation by the scheduled 26.5 percent. That is simply not going to happen.

Here are Obama’s desired alternative fiscal policies to avoid the fiscal cliff in order of their effect on the five-year budget as estimated by the CBO:

1. Preserve Bush tax cuts and other tax provisions for everyone except the top 2 percent: Raises the five-year deficit by $2.0 trillion.

2. Drop the fiscal-cliff sequestration of spending and expand discretionary spending by the rate of inflation: Raises the five-year deficit by another trillion dollars.

3. Raise the tax rate on the top 2 percent:  Lowers the five-year deficit by $300 billion.

4. Extend enhanced unemployment benefits: Raises the five-year deficit by $200 billion.

5. Do not cut Medicare payment rates to physicians: Raises the five-year deficit by some $100.

Four of the five fiscal policies on Obama’s wish list raise the deficit. Only one – the vaunted tax on the rich on which he based his campaign – lowers the deficit, but only by a miniscule $300 billion ($60 billion per year). If Obama gets the tax and spending changes he wants, his 2017 successor will inherit a national debt in excess of  $20 trillion.

A warning: The 2013-2017 budget deficits could be much higher. No one knows what the costs of Obama Care will be. By 2017, the federal government will be spending more on health care than on social security. The CBO projection assumes that the costs of Obama Care come in on target. If Obama Care cannot contain health care costs, we could easily see a five-year deficit well in excess of $5 trillion, for an annual deficit of more than a trillion dollars. The CBO also uses a historically low rate of increase of discretionary non-defense spending equal to the rate of inflation. If we return to “business as usual” in Washington, the discretionary spending figure could also be blasted out of the water.

Obama based his re-election campaign on “the rich should pay their fair share” and “I killed Osama.” Well before the election, it was clear from the government’s own figures that taxing the top two percent would make only a tiny contribution to solving our deficit problems.

Why was this not pointed out by the media, who played along with the “tax the rich” fairy tale?  Why was this not the central theme of the Republican campaign?

I think that point I highlighted in bold deserves emphasis. Obama ran up over $6 trillion in new debt – pushing us to a $16.5 trillion dollar debt. His “balanced approach” will generate a measly $60 billion a year in “new revenues”, assuming that “the rich” don’t just curtail their productive activities and shift their operations elsewhere (Canada). If you generate $60 billion in revenues, there is NO WAY that this is going to pay for a trillion dollars a year in new debt. So we are on track to hit over $20 trillion in national debt in Obama’s second term, taking us into Greece-like territory.

And that is according to the official CBO numbers.

John Boehner on Fox News Sunday discussing the fiscal cliff

It’s time for our weekly update on the fiscal cliff.

Full text:

On Fox News Sunday, Speaker John Boehner said Republicans have offered a balanced approach to averting the fiscal cliff but the president is “not being serious about coming to an agreement.” Boehner says the White House is holding tax increases over the heads of the middle class while demanding more spending and tax rate hikes that will hurt small businesses.

Here are some of the highlights:

Boehner: President Obama’ s Fiscal Cliff Offer is “Nonsense,” a “Non-Serious Proposal”:

“A non-serious proposal.  The president was asking for $1.6 trillion worth of, uh, new revenue over 10 years, twice as much as he’s been asking for in public.  He has stimulus spending in here that exceeded the amount of new cuts that he was willing to consider.  It was not a serious offer. … I looked at [Secretary Geithner] and I said, ‘you can’t be serious?’ … You know, we’ve got several weeks between Election Day and the end of the year.  And, uh — and three of those way — weeks have been wasted, uh, with the — with this nonsense.”

Boehner: President Obama Asked for More New Spending Than Spending Cuts:

“We’ve put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They have actually asked for more revenue than they’ve been — been asking for the whole entire time. … And all of this new stimulus spending would literally be more than the spending cuts that he was willing to put on the table. … Look at the fact that they put $400 billion worth of unspecified cuts up that they’d be willing to talk about, but yet, at the same time, that’s over $400 billion over 10 years.  Uh, while he wants over $400 billion in new stimulus spending. And this is — this is — it’s a non-serious proposal.”

Boehner: What Will President Obama Do With $1.6 Trillion? Spend It!

“I mean think about the — the proposal we got from the president.  If we gave the president $1.6 trillion of new money, what do you think he’d do with it? He’s going to spend it.  It’s what Washington does. … They’ll spend it.”

Boehner: Raising Tax Rates Will Hurt Small Businesses and Destroy Jobs:

“Now, listen, I believe that raising tax rates hurts our economy, hurts the prospects for more jobs in our country.  And I realize that the president may disagree.  But the fact is, is that if there’s another way to get revenue, uh, from upper income Americans, that doesn’t hurt our economy, then why wouldn’t we consider it?”

Boehner: Spending Cuts & Reforms Must Exceed Any Increase in the Debt Limit:

“Forever.  Silliness.  Congress is never going to give up this power.  I’ve made it clear to the president that every time we get to the debt limit, we need cuts and reforms that are greater than the increase in the debt limit.  It’s the only way to leverage the political process to produce more change than what it would if left alone.

Boehner: Going Over the Fiscal Cliff Will Hurt Our Economy, Is Not Fair to the American People:

“[T]his isn’t an issue about Democrats and Republicans.  My goodness, this is about our country.  And we get — ought to get serious about dealing with the problems at the end of the year.  And we need to get serious about our deficit and our debt, uh, that are burying our children’s future. … [G]oing over the cliff will hurt our economy, will hurt job creation in our country.  It’s not fair to the American people. … This agreement should come sooner rather than later, because just the threat of the fiscal cliff is already hurting our economy.”

That’s where the Republicans stand. They did offer to tax the rich by capping tax deductions, so that the very wealthy would pay more in taxes. But Obama turned down that offer. That was a solid offer, and Obama turned it down.

Right now, I am just sick of the American people who re-elected this spendthrift. I want the Republicans to let all the tax cuts expire. It will be good for the American people as a whole to see the importance of not re-electing an ignorant fool. Maybe we have to hit the bottom of how much we can borrow before the people who voted for “Obamaphones” will feel the effects of their economic ignorance.

Obama calls for $1.6 trillion of new taxes as economy faces a new recession

Do you raise taxes in a recession? Obama once thought that raising taxes would hurt a recovery and hamper job creation.

Fox News reports on what Obama the President thinks now.

Excerpt:

President Obama, ahead of his first press conference since winning re-election and a meeting later this week with congressional leaders, staked out his starting point for fiscal cliff negotiations — $1.6 trillion in tax hikes. 

White House Press Secretary Jay Carney made clear that the president is sticking by his original budget plan, which includes $1.6 trillion in new revenue, by raising taxes on households making more than $250,000. 

[…]Republicans, though, are adamantly opposed to raising tax rates, despite a willingness to deal on closing loopholes and deductions.

[…]On Tuesday he met with labor leaders and liberal groups, telling them he would stand behind his campaign pledge to make top earners pay more in taxes.

“We’re prepared to stand up to make sure there is shared sacrifice here, so the rich actually start paying their fair share and the middle class don’t get soaked for that,” said AFL-CIO labor union federation President Richard Trumka.

At issue is an annual U.S. budget deficit that now is routinely above $1 trillion and a national debt that has risen to near $16.5 trillion.

Washington politicians have just over seven weeks, including breaks for the Thanksgiving holiday next week and the Christmas holiday season, to avert the year-end fiscal cliff.

$1.6 trillion of tax increases won’t hurt the middle class?

This article from Arthur C. Brooks addresses that point.

Excerpt:

On average, failed attempts to close budget gaps relied 53 percent on tax increases and 47 percent on spending cuts. Successful consolidations averaged 85 percent spending cuts and 15 percent tax increases. Some of the most successful financial comebacks–like Finland’s in the late 1990s–involved more than 100 percent spending cuts, so that taxes could be lowered. The spending cuts by the successful countries centered on entitlements and government personnel.

Now let’s look at the moral argument against raising taxes. Why does the president want to increase America’s tax burden? You may think it’s just a way to increase revenues and reduce the deficit. But even the president knows he can’t solve the fiscal crisis by helping himself to bigger and bigger chunks of the income of America’s most successful people. Even if individuals earning more than $200,000 were taxed at a 100 percent marginal rate–and we confiscated their passports so they could not flee–the take would come to $1.27 trillion, or just 77 percent of this year’s deficit.

For the administration, it’s not about the money–as we have heard again and again, it’s about “fairness.” The president believes that we will be a better nation if we redistribute more money from those who have more to those who have less. How much more do we need to redistribute until our system is fair?

As you ponder this question, remember the facts: The wealthiest 5 percent of Americans already account for 59 percent of federal income taxes. Nearly half of our citizens pay no federal income taxes at all–yet two-thirds of us believe that everybody should at least pay something, even if just to remind ourselves that government isn’t free. The Tax Foundation reports that the percentage of Americans who are net takers from the tax system is nearing 70 percent.

Note that even if you confiscated the passports of the wealthy, as communists tend to do, they would not agree to work for free voluntarily – they would stop working and do other things with their time instead. Perhaps Obama’s plan involves forcing the rich to continue to work while confiscating the fruits of their labor to distribute to his non-working constituencies. That would be slavery, which is not surprising if you know your history of slavery in the United States. Abraham Lincoln was a Republican, after all, and William Wilberforce was a Conservative.

The right way to solve this problem is with spending cuts and shutting down duplicate programs, waste and entire federal departments that are unconstitutional. But since we re-elected Obama, this is unlikely to happen. The Democrats are the party of big government and they will pass the costs of big government onto the middle class and their employers. When you tax the rich, you tax job-creating businesses and job-creating investors. You lose jobs. You make more people dependent on government. That’s what “making the wealthy pay their fair share” really means.

Is Obama telling the truth about U.S. oil reserves?

The Department of Energy's own figures

The Department of Energy’s own figures

Investors Business Daily explains. (H/T Master Resource)

Excerpt:

When he was running for the Oval Office four years ago amid $4-a-gallon gasoline prices, then-Sen. Barack Obama dismissed the idea of expanded oil production as a way to relieve the pain at the pump.

“Even if you opened up every square inch of our land and our coasts to drilling,” he said. “America still has only 3% of the world’s oil reserves.” Which meant, he said, that the U.S. couldn’t affect global oil prices.

It’s the same rhetoric President Obama is using now, as gas prices hit $4 again, except now he puts the figure at 2%.

“With only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices,” he said. “Not when we consume 20% of the world’s oil.”

The claim makes it appear as though the U.S. is an oil-barren nation, perpetually dependent on foreign oil and high prices unless we can cut our own use and develop alternative energy sources like algae.

But the figure Obama uses — proved oil reserves — vastly undercounts how much oil the U.S. actually contains. In fact, far from being oil-poor, the country is awash in vast quantities — enough to meet all the country’s oil needs for hundreds of years.

The U.S. has 22.3 billion barrels of proved reserves, a little less than 2% of the entire world’s proved reserves, according to the Energy Information Administration. But as the EIA explains, proved reserves “are a small subset of recoverable resources,” because they only count oil that companies are currently drilling for in existing fields.

When you look at the whole picture, it turns out that there are vast supplies of oil in the U.S., according to various government reports. Among them:

At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered, according to the government’s Bureau of Ocean Energy Management.

About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.

Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope, says the U.S. Geological Survey.

Up to 12 billion barrels in ANWR, according to the USGS.

As much as 19 billion barrels in the Utah tar sands, according to the Bureau of Land Management.

Then, there’s the massive Green River Formation in Wyoming, which according to the USGS contains a stunning 1.4 trillion barrels of oil shale — a type of oil released from sedimentary rock after it’s heated.

[…]All told, the U.S. has access to 400 billion barrels of crude that could be recovered using existing drilling technologies, according to a 2006 Energy Department report.

When you include oil shale, the U.S. has 1.4 trillion barrels of technically recoverable oil, according to the Institute for Energy Research, enough to meet all U.S. oil needs for about the next 200 years, without any imports.

Please share this article, because it is unlikely that Obama’s Solyndra-supporting buddies in the mainstream media will report the facts on domestic energy production.

Production of oil, gas and coal on federal lands sinks to 9-year low

Obama claims that production of oil, gas and coal is up since he took office. It’s true that areas under state control are producing more, but what about energy production on federal lands? That’s the part of the country that Obama is responsible for.

Let’s see what two recent studies from the Energy Information Administration and the Institute for Energy Research found.

Excerpt:

The updated EIA report revealed a 12 percent decline in production for coal, oil, and natural gas on federal and Indian lands from fiscal 2003 through fiscal 2011.

During this same period, production on state and private lands has increased, boosting overall production numbers for the United States. That’s a point even President Obama will acknowledge: “Under my Administration, domestic oil and natural gas production is up,” he said upon announcing his rejection of the Keystone XL pipeline.

Obama is correct. He just can’t rightfully claim the credit, since the vast majority of America’s new oil and gas production is happening on private lands in states like North Dakota, Alaska and Texas.

The administration, meanwhile, has also taken several steps to limit production…

  • Withdrew areas offered for 77 oil and gas leases in Utah that could cost American taxpayers millions in lost lease bids, production royalties, new jobs and the energy needed to offset rising imports of oil and natural gas.
  • Cancelled lease sales in the Western Gulf of Mexico, the Atlantic coast and delayed exploration off the coast of Alaska and kept other resource-rich areas off-limits.
  • Finalized rules, first announced by Secretary Salazar on January 6, 2010, to establish more government hurdles to onshore oil and natural gas production on federal lands.
  • Withdrew 61 oil and natural gas leases in Montana as part of a lawsuit settlement over climate change.

“The big picture is clear that government policies undertaken by the Obama administration have produced a significant decline in offshore oil production on federal lands in fiscal year 2011,” the Institute for Energy Research said in response to last week’s updated EIA analysis. “That is certainly not a way to increase domestic production of oil and keep oil and thus gasoline prices in check.”

While it was waiting for EIA to update its numbers, the Institute for Energy Research conducted its own analysis of Department of Interior data in February. It came to the same conclusion: “Production on federal lands is down, while production on state and private lands is up.”

That’s the real story behind Obama’s claims about higher energy production. He’s doing his best to block energy production in the areas under his control. His energy plan is Solyndra, Solyndra, Solyndra – paying off his rich Democrat buddies with taxpayer money.