Atlantic: Obama To The Next Generation: Screw You, Suckers

[nonniey]

I see Andrew Sullivan has now turned on Obama, But it is Sullivan, so that was to be expected as he has a history of turning on the Presidents he previously had rabidly supported.

http://andrewsullivan.theatlantic.com/the_daily_dish/2011/02/obama-to-the-obama-generation-youre-on-your-own.html

The logic behind president Obama's budget has one extremely sensible feature: it distinguishes between spending that simply adds to consumption, and spending that really does mean investment. His analogy over the weekend - that a family cutting a budget would rather not cut money for the kids' education - is a sound one. We do need more infrastructure, roads and broadband, non-carbon energy and basic science research, and some of that is something only government can do. In that sense, discretionary spending could be among the most important things government could do to help Americans create wealth themselves. And yet this is the only spending Obama wants to cut.

But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there's some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I'd feel duped. And they were duped. All of us who took Obama's pitch as fiscally responsible were duped.

The cynical political calculation is obvious and it is well put by Yglesias and Sprung. If Obama backs Bowles-Simpson, the GOP will savage him for the tax hikes, while also scaring the wits out of the elderly on Medicare. The Democratic left - just look at HuffPo today - will have a cow. Indeed, if Obama backs anything, the GOP will automatically oppose him. He has to wait for a bipartisan agreement which he can then gently push ahead. But that's exactly why we are in this situation today. Because no president has had the balls to deal with it, and George W. Bush made it all insanely worse. Sprung says the proposal on corporate taxes is a trial balloon. He argues that:

Corporate income taxes account for about 12% of the Federal government's revenue. Obama's core premise for reforming them is structurally similar to the Bowles-Simpson commission's approach to personal tax reform: reduce targeted tax breaks while lowering the overall rate, currently at 35%.

And that's fine if you think we have plenty of time. But in a mere nine years, entitlements will account for 64 percent of all federal spending. And Obama just punted on his promise to cut Medicare payments to doctors, as pledged under Obamacare as a core part of the case that health insurance reform would cut the deficit. So congrats, Megan. We can chalk that up as a cynical diversion (even though Obama pledges to find savings elsewhere in the Medicare budget to make up for this lie - a promise we now have no reason to trust or believe).

There is some hope, as David Brooks has noted. Those who want to save the useful things that government alone can do, while pulling back from the fiscal brink, have to get behind an effort now being hatched by a group of courageous senators: Saxby Chambliss, Mark Warner, Tom Coburn, Dick Durbin, Mike Crapo and Kent Conrad. These public heroes have been leading an effort to write up the Simpson-Bowles deficit commission report as legislation to serve as the beginning for a serious effort to get our house in order. They’ve been meeting with 20 to 40 of their colleagues to push this along. They have to lead, because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bull**** it makes it perfectly clear that Obama is kicking this vital issue down the road.

To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you're fools. Either the US will go into default because of Obama's cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America's fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.

[Madison Redskin]

I agree somewhat in that cuts to discretionary spending aren't going to get the job done. As Rep. Ryan said, Obama "punted" the issue of cuts to entitlement spending to the GOP. That's an issue that needs to be tackled. I'm interested to hear what the GOP proposes we do about Medicare/Medicaid and Social Security spending.

[SkinsHokieFan]

I agree somewhat in that cuts to discretionary spending aren't going to get the job done. As Rep. Ryan said, Obama "punted" the issue of cuts to entitlement spending to the GOP. That's an issue that needs to be tackled. I'm interested to hear what the GOP proposes we do about Medicare/Medicaid and Social Security spending.

You would think a President who had his party controlling Congress wouldn't have "punted" it for 2 years.

But thats the Obama leadership style unfourtantly

What 100 percent floors me is that the 1.6 trillion dollar projected deficit is 4 times the "non financial crises" deficits of George W.

I simply am unable to fathom that, as there is no TARP in the upcoming year. Can someone break it down to me how we are so far north of 1 trillion without any bailouts this year?

---------- Post added February-15th-2011 at 01:10 PM ----------

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/14/AR2011021400906.html?hpid=topnews

Obama budget projects record $1.6 trillion deficit

By Lori Montgomery

Washington Post Staff Writer

Monday, February 14, 2011; 4:26 PM

President Obama rolled out a $3.7 trillion budget blueprint Monday that would trim or terminate more than 200 federal programs next year and make key investments in education, transportation and research. The plan is aimed at boosting the nation's economy while reducing record budget deficits.

In a news conference at a Baltimore County middle school, Obama cast the document as a responsible alternative to the deep spending cuts that Republicans will urge in a vote this week on the House floor. Obama's plan would trim domestic spending by hundreds of billions of dollars over the next decade, striking hard at programs long favored by Democrats to make room for targeted increases in energy and medical research, corporate research and development and a new network to bring high-speed Internet access to 98 percent of Americans.

However, Obama also would rely heavily on new taxes, to a degree unacknowledged by administration officials in recent days. His budget request calls for well over $1.6 trillion in fresh revenue over the next decade, much of it through higher taxes on the wealthy and businesses.

Households with income of more than $250,000 a year would immediately see new limits on the value of their itemized deductions. And starting in 2013, they would lose the lower tax rates and other breaks that were enacted during the George W. Bush administration and recently extended.

---------- Post added February-15th-2011 at 01:11 PM ----------

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/15/AR2011021500055.html?hpid=opinionsbox1

President Obama's budget kicks the hard choices further down the road

THE PRESIDENT PUNTED. Having been given the chance, the cover and the push by the fiscal commission he created to take bold steps to raise revenue and curb entitlement spending, President Obama, in his fiscal 2012 budget proposal, chose instead to duck. To duck, and to mask some of the ducking with the sort of budgetary gimmicks he once derided. "The fiscal realities we face require hard choices," the president said in his budget message. "A decade of deficits, compounded by the effects of the recession and the steps we had to take to break it, as well as the chronic failure to confront difficult decisions, has put us on an unsustainable course." His budget would keep the country on that course.

Granted, the budget outlines cuts in discretionary spending, ranging from military procurement to heating assistance for the poor. A five-year freeze in nonsecurity discretionary spending - two years longer than the three-year freeze proposed in last year's budget - would save $400 billion during that period compared to what would have been spent otherwise to keep up with inflation.

But as Mr. Obama noted in his State of the Union address, discretionary spending represents a small slice of government outlays, so cuts in discretionary spending are simultaneously onerous and insufficient to reach fiscal balance. The administration proclaimed that its budget would save $1.1 trillion, two-thirds of it from spending cuts. It neglected to point out that, even if all those savings were implemented, the debt would increase by another $7.2 trillion over the decade. And that's accepting the administration's optimistic projections. From 2013 to 2016, the administration estimates the economy will grow at an average rate of nearly 3.9 percent per year, while the Congressional Budget Office projects a growth rate of just 3.4 percent. That could make an enormous difference in the amount of revenue generated and, consequently, the size of deficits.

By 2021, the national debt will equal 77 percent of the total economy, even given the administration's rosy forecast - and, as the administration's chart reprinted here shows, the debt will then really explode.

Click link for rest

[Duckus]

No one wants to take the first step in addressing entitlement spending because it is a step right off a cliff.

The first person who proposes to cut Social Security and Medicare will be unemployed in 2012.

[SkinsHokieFan]

No one wants to take the first step in addressing entitlement spending because it is a step right off a cliff.

The first person who proposes to cut Social Security and Medicare will be unemployed in 2012.

If there is one guy who I think can actually get away with it, its President Obama.

Along with that, the military cuts are weak.

I am simply beffudled that we are winding down both Iraq and Afghanistan yet the budget deficit is 4 times the size that George Bush had at is highest pre financial crises.

[Larry]

What 100 percent floors me is that the 1.6 trillion dollar projected deficit is 4 times the "non financial crises" deficits of George W.

I simply am unable to fathom that, as there is no TARP in the upcoming year. Can someone break it down to me how we are so far north of 1 trillion without any bailouts this year?

The biggest reason for the growth of the deficit is that the recession has caused federal revenues to drop by 10% in FY08, and it's projected to fall by 20% in FY09.

(And no, I don't know why we don't have actual numbers for FY09.)

[Madison Redskin]

I am simply beffudled that we are winding down both Iraq and Afghanistan yet the budget deficit is 4 times the size that George Bush had at is highest pre financial crises.

I think the biggest reason is that tax revenue is waaaay down from the 2007-2008 levels.

[SkinsHokieFan]

The biggest reason for the growth of the deficit is that the recession has caused federal revenues to drop by 10% in 08, and it's projected to fall by 20% in '09.

I think the biggest reason is that tax revenue is waaaay down from the 2007-2008 levels.

1.2 trillion down?

From wiki

http://en.wikipedia.org/wiki/2007_United_States_federal_budget

Submitted by George W. Bush

Submitted to 109th Congress

Total revenue $2.54 trillion

Total expenditures $2.78 trillion

Deficit $244.2 billion

Debt $8.95 trillion

Website Congressional Budget Office

[Larry]

Correction to my data. I was looking at total government revenue, not just federal.

Federal only data.

(That explains why the numbers seemed different than I remembered.)

For federal revenue only:

FY $B

07 2567

08 2523

09 2104

10 2162

11 2173 (estimate)

A bit over $400B of the deficit increase is due to the drop in federal revenues.

Another chunk of it is because the recession caused spending to increase. (That's to distinguish it from spending increases because Congress actually mandated spending increases.) Things like more unemployed people causes the government to send out more unemployment checks. And people deciding to retire early causing the government to send out more SS and Medicare checks.

Yeah, the government also did things that increased the deficit. Things like extending unemployment. (Did they do that twice? I seem to to remember they did.) But the biggest single item in the increase in the deficit was the drop in revenue.

[Box76]

No one wants to take the first step in addressing entitlement spending because it is a step right off a cliff.

The first person who proposes to cut Social Security and Medicare will be unemployed in 2012.

As well as they should be unemployed. I think most reasonable people who pay into SS are entitled to some benefit and they see the absolute waste of money in so many other areas....welfare, bailouts , pet projects...etc. that should be cut first. It would be a lot easier to get on board with these cuts if the gov't started with real entitlement spending aka..those that do not pay into the system yet expect their rewards.

[Tulane Skins Fan]

If there is one guy who I think can actually get away with it, its President Obama.

Along with that, the military cuts are weak.

I am simply beffudled that we are winding down both Iraq and Afghanistan yet the budget deficit is 4 times the size that George Bush had at is highest pre financial crises.

Maybe after his re-election (if he is re-elected). Although, he has bit the hand that has fed him already, I can't see him taking on all of the seniors in the U.S. until he knows he has nothing to run for.

[SkinsHokieFan]

http://www.usgovernmentrevenue.com/downchart_gr.php?year=2004_2013&view=1&expand=&units=b&fy=fy12&chart=F0-total&bar=1&stack=1&size=m&title=&state=US&color=c&local=s

There's other reason (many of them also due to the recession.) For example, the recession caused federal spending on unemployment and other welfare to go up. And lots of people decided to retire early, causing SS spending to go up.

But contrary to the Talking Points, the explosion in the deficit mostly isn't due to anything that the government did. Part of it is, like the stimulus bills, and the government extending unemployment. (Did they do that twice? I don't remember.)

I think you are misunderstanding what I am stating here

The projected deficit GOING FORWARD in FY 2012 is 1.6 trillion dollars. This is based on the budget the President has just submitted to Congress

I understand why we had a massive spike in the deficit in 2009 and 2010. Revenues down, and expindetures up.

Going FORWARD there is no bailout. The stimulus law is pretty much done. We are winding down in Iraq and Afghanistan

Yet I see proposed spending being 1 trillion higher then proposed spending was in 2007. The deficit is 1.2 trillion higher. And all of this without bailouts and stimulus packages

I see this chart from your website Larry and see a 500 billion dollar increase in revenue from FY 2011 to FY 2012

http://www.usgovernmentrevenue.com/federal_budget

[Ignatius J.]

No one wants to take the first step in addressing entitlement spending because it is a step right off a cliff.

The first person who proposes to cut Social Security and Medicare will be unemployed in 2012.

I'm not sure that this is completely fair. The democrats tried to rein in medicare spending a little tiny bit in the health care plan and the result was "death panels" screamed from the rooftops by every conservative who could find a microphone. I'm not saying that democrats have done a great job fighting for their stance, but if obama were to come out with a reasonable plan now, all we'd likely see is a republican president and senate in 2012 cutting more taxes for the rich. So in an unreasonable situation this may be the best he can do.

So I guess don't hate the player, hate the game. I'm not sure Obama has a choice here since it is the conservative base that wants the spending cuts let them take the political heat for them. Fool me once, shame on....shame on you. Fool me.... You can't get fooled again.

edit:: and just to be a little more clear, I think this budget signifies that obama agrees in principle with the idea of cuts but he is really going to force the hand of those on the right to come up with some proposals that might pass.

[Larry]

I see this chart from your website Larry and see a 500 billion dollar increase in revenue from FY 2011 to FY 2012

http://www.usgovernmentrevenue.com/federal_budget

I just updated my post. Apologies.

[Duckus]

If there is one guy who I think can actually get away with it, its President Obama.

Really? You may be right, but I have doubts. The GOP accused him during the Healthcare debate for, of all things, "cutting" entitlements. They focused their attention on the elderly and their message was clear "this legislation is going to take away your Medicare" and "this legislation cuts Medicare funding" and of course "they will kill you." And it worked. The elderly completely freaked - like they do anytime someone even talks about SS or Medicare - and his numbers began to free-fall.

That game plan worked perfectly for the GOP. You think if he proposed massive changes to SS and Medicare the GOP they would not attack using the same playbook? I don't know, but I have a good feeling they would go after him just as viciously as you saw last year.

[SkinsHokieFan]

You think if he proposed massive changes to SS and Medicare the GOP would not attack? I don't know, but I have a good feeling they would go after him just as viciously as you saw with "death panels" and "ending Medicare" just last year.

Somehow Gingrich and Clinton managed to change welfare and usher in "the era of big government being over"

And not nearly as many people like Clinton as they do Obama.

The guy has the bully pulpit. Use it. Show some leadership on the issue, in particular when you'll have little primary challenge and will face an R who will be destroyed in his primary.

That time is now. Instead we got Ray Guy in the White House

[Duckus]

Somehow Gingrich and Clinton managed to change welfare and usher in "the era of big government being over"

And not nearly as many people like Clinton as they do Obama.

The guy has the bully pulpit. Use it. Show some leadership on the issue, in particular when you'll have little primary challenge and will face an R who will be destroyed in his primary.

That time is now. Instead we got Ray Guy in the White House

We agree that he should do it. I think he should do it even if it costs him the 2012 election. I just think you are underestimating the consequences of him doing it.

Welfare is verrrrrrrrrrrrrrrrrrrrrrrrrrrrry different than SS or Medicare.

Poor people don't vote in large numbers.

Old people win or lose you an election.

Seniors in the country right now (and the ones moving into their senior years) are the most entitled and selfish generation the country has ever had. Any threat to their part of the pie is unacceptable. Until those folks accept that, no politician will touch the issue in a serious manner.

[Larry]

No one wants to take the first step in addressing entitlement spending because it is a step right off a cliff.

The first person who proposes to cut Social Security and Medicare will be unemployed in 2012.

Actually, Larry's plan is:

It's not fair to move the goalposts on some guy who thought he was a month away from retirement. He's made too many plans, based on the current rules. My proposal for SS is:

No change for the next two years.

After that, the retirement age goes up 6 months, every year, until it gets to 70.

Result:

If you're 63 or 64, nothing changes.

If you're 62, then retirement age becomes 65.5

61? Your target is now 66.

59? 67.

53 or younger? Retirement age is 70.

[SkinsHokieFan]

Yeah, the government also did things that increased the deficit. Things like extending unemployment. (Did they do that twice? I seem to to remember they did.) But the biggest single item in the increase in the deficit was the drop in revenue.

According to your link we are now going to be back at and beyond FY 07 levels of revenue

2012- 2,627.5 (estimate)

Yet we are still 1.6 trillion in the red according to the President for FY 2012?

That isn't coming from revenue drops going forward

[Mooka]

I think you are misunderstanding what I am stating here

The projected deficit GOING FORWARD in FY 2012 is 1.6 trillion dollars. This is based on the budget the President has just submitted to Congress

I understand why we had a massive spike in the deficit in 2009 and 2010. Revenues down, and expindetures up.

Going FORWARD there is no bailout. The stimulus law is pretty much done. We are winding down in Iraq and Afghanistan

Yet I see proposed spending being 1 trillion higher then proposed spending was in 2007. The deficit is 1.2 trillion higher. And all of this without bailouts and stimulus packages

I see this chart from your website Larry and see a 500 billion dollar increase in revenue from FY 2011 to FY 2012

http://www.usgovernmentrevenue.com/federal_budget

I'm no expert but the costs for these things are over a long period of time. Tax cuts, wars, stimulus, bailouts, health care reform, etc.

I assume if you're projecting costs up to 2020 and a recession hits in 2008, then every year we're adding more to the deficit then previously calculated. (makes sense in my head anyway) The real answer is probably beyond my scope of economics.

[Larry]

So your point is that in a year or two, revenues will be back to what they were four years ago?

Gee, all we have to do to cut the deficit is to cancel all increases in government spending, retroactive for four years. That might suck for all the people who retired or went on welfare for the last four years. But I'm with you.

[Madison Redskin]

It would be a lot easier to get on board with these cuts if the gov't started with real entitlement spending aka..those that do not pay into the system yet expect their rewards.

Social security benefits are tied to what people "pay into the system."

[SkinsHokieFan]

So your point is that in a year or two, revenues will be back to what they were four years ago?

Gee, all we have to do to cut the deficit is to cancel all increases in government spending, retroactive for four years. That might suck for all the people who retired or went on welfare for the last four years. But I'm with you.

You still don't seem to understand. I am not worried about what happened the last 4 years. Its done and its over.

However when such elements like Iraq and Afghanistan, the stimulus and bailouts are all winding down, how in the h e l l are we seeing a projected deficit north of a trillion.

Your argument is that revenue has gone down. But it is going up from 2011 to 2012 by 500 billion according to your link. That is a decent sum of cash.

So again, with Iraq and Afghanistan winding down, bailouts and stimulus packages gone, how are we managing to go into FY 2012 with a President giving Congress a budget that has a deficit 4 times larger then the deficits of his predeccesor "pre financial crises"

Your argument is "well tax revenue is down"

But its not down by 1.2 trillion dollars. Even with additional mandtory spending (SSI, Medicare, Medicaid) we aren't seeing a + of 1.2 trillion there.

Somehow, from 2007 we had a budget proposed of 2.7 trillion dollars. A mere half decade later, we are seeing it propsed a trillion dollars higher

[nonniey]

So your point is that in a year or two, revenues will be back to what they were four years ago?

Gee, all we have to do to cut the deficit is to cancel all increases in government spending, retroactive for four years. That might suck for all the people who retired or went on welfare for the last four years. But I'm with you.

You missed the boat there, Larry. It is our President's point that revenues will be back where they were four years ago, not SHFs. point. And yet still a $1.6 trillion shortfall.

[Burgold]

You missed the boat there, Larry. It is our President's point that revenues will be back where they were four years ago, not SHFs. point. And yet still a $1.6 trillion shortfall.

That's the bizarre thing. All those wanting to return the budget to 2008 or 2006 levels seem to be forgetting how many problems we had back then and how those led us to where we are today. Returning to doing what we were doing in 2006 is not exactly a good idea.

I don't know who I'm agreeing with or disagreeing with by the way. I just feel it kind of nuts this strange nostalgia for the budgets of 2008.