Tax cheat Timothy Geithner is defending President Barack Obama’s proposed tax increases:
President Obama’s Treasury secretary is defending proposed tax increases, saying they are necessary to limit future budget deficits.
Timothy Geithner responded on Wednesday to Republican criticism that the administration wants to increase taxes during a recession. Geithner noted that tax increases on couples making more than $250,000 per year would not take effect until 2011.
Obama inherited a $1.3 trillion budget deficit that is expected to balloon to $1.75 trillion this year. Obama says his plan would reduce the deficit to $533 billion in four years.
Don’t you love how they act like the only way to cut the deficit is to raise taxes. I guess it’s too much to ask to just reduce spending to cut the deficit.
This is the fourth nominee by Obama that has come under scrutiny due to failure to pay taxes.
Need anymore evidence that taxes are too high, the tax code is difficult to understand and the tax system is broken? Look no further than appointees of Barack Obama.
The omnibus budget bill that passed the House last week could destroy school vouchers in Washington, DC and the Washington Post is urging the Senate to restore the funding:
Rep. Davis R. Obey (Wis.) and other congressional Democrats should spare us their phony concern about the children participating in the District’s school voucher program. If they cared for the future of these students, they wouldn’t be so quick as to try to kill the program that affords low-income, minority children a chance at a better education. Their refusal to even give the program a fair hearing makes it critical that D.C. Mayor Adrian M. Fenty (D) seek help from voucher supporters in the Senate and, if need be, President Obama.
Last week, the Democrat-controlled House passed a spending bill that spells the end, after the 2009-10 school year, of the federally funded program that enables poor students to attend private schools with scholarships of up to $7,500. A statement signed by Mr. Obey as Appropriations Committee chairman that accompanied the $410 billion spending package directs D.C. Schools Chancellor Michelle A. Rhee to “promptly take steps to minimize potential disruption and ensure smooth transition” for students forced back into the public schools.
We would like Mr. Obey and his colleagues to talk about possible “disruption” with Deborah Parker, mother of two children who attend Sidwell Friends School because of the D.C. Opportunity Scholarship Program. “The mere thought of returning to public school frightens me,” Ms. Parker told us as she related the opportunities — such as a trip to China for her son — made possible by the program. Tell her, as critics claim, that vouchers don’t work, and she’ll list her children’s improved test scores, feeling of safety and improved motivation.
But the debate unfolding on Capitol Hill isn’t about facts. It’s about politics and the stranglehold the teachers unions have on the Democratic Party. Why else has so much time and effort gone into trying to kill off what, in the grand scheme of government spending, is a tiny program? Why wouldn’t Congress want to get the results of a carefully calibrated scientific study before pulling the plug on a program that has proved to be enormously popular? Could the real fear be that school vouchers might actually be shown to be effective in leveling the academic playing field?
This week, the Senate takes up the omnibus spending bill, and we hope that, with the help of supporters such as Sen. Joseph I. Lieberman (I-Conn.), the program gets the reprieve it deserves. If it doesn’t, someone needs to tell Ms. Parker why a bunch of elected officials who can send their children to any school they choose are taking that option from her.
The vouchers cover up to $7,500 ($6,000 average), the average cost per student in DC is $24,600. So it’s hardly a substantial amount of money in comparison to the amount of money spent on the average student and the vouchers are having a positive impact for students.
Members of Congress and the President have made the choice to send their kids to private school. If they don’t trust the government to educate their kids, why should the residents of the District of Columbia?
One day after delivering a forceful campaign-style speech to the conference of conservative activists, former Massachusetts Gov. Mitt Romney won his third straight CPAC Straw Poll, earning 20 percent of the vote on a ballot that included nine other Republicans who could seek the party’s presidential nomination in 2012.
Romney’s straw poll win at the 2007 Conservative Political Action Conference helped to elevate Romney from a little-known governor to a bona fide presidential frontrunner, and his narrow victory in last year’s straw poll reaffirmed his support among conservative voters. But Romney failed to win the Republican nomination, which was eventually won by Arizona Sen. John McCain.
In the 2009 poll, Louisiana Gov. Bobby Jindal came in second with 14 percent of the vote, while Alaska Gov. Sarah Palin and Texas Rep. Ron Paul tied at 13 percent. Jindal and Palin did not attend the conference.
Rounding out the straw poll results were former House speaker Newt Gingrich at 10 percent, former Arkansas Gov. Mike Huckabee at seven percent, South Carolina Gov. Mark Sanford at four percent, former New York City mayor Rudy Giuliani at three percent, Minnesota Gov. Tim Pawlenty at two percent, and Florida Gov. Charlie Crist at one percent. Nine percent of poll participants were undecided.
Glad to see the folks at the conference aren’t taking Tax Hike Mike too seriously, though I’m a bit bummed about Mark Sanford’s numbers. I’m surprised to see how well Ron Paul did. I know C4L had a presence at CPAC, looks like it paid off.
Here is a better look at things from CPAC:
Fed Chairman Ben Bernanke says bank nationalization is unlikely:
Stress tests of big US banks that start this week are unlikely to lead to any of them being seized by regulators and nationalised outright, Federal Reserve chairman Ben Bernanke told Congress on Tuesday.
His comments provided the clearest signal yet that US authorities hope to support major banks as going concerns in the private markets, taking equity stakes as necessary to shore up their capital in what would amount to partial nationalisations.
Stocks rose in response, with the S&P 500 index rising 4 per cent from the previous session’s 12-year lows. Both Citigroup and Bank of America rose about 21 per cent to lead the market higher.
Asked whether the stress tests will lead regulators to move in to take outright control of some banks under powers used to deal with failing institutions, the Federal Reserve chairman said: “No, I don’t think so.”
He made it clear that he does not believe that outright nationalisation makes sense today.
“I do not see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalise a bank when it just is not necessary.”
He said the authorities had other ways to “exert adequate control to make sure they are doing what is necessary to become healthy and viable”.
Obama has been trying to play down nationalization for the last week as well, though some would argue that a partial nationalization has already taken place.
You have to wonder if nationalization would cause a run on banks. Wall Street was clearly worried about the prospect. Stocks tanked last week even as Obama was denying plans to nationalize, but they jumped when Bernanke said nationalization was unlikely.
Despite Obama basically telling us last night that the Era of Big Government is back and on steroids, Wall Street was has been skeptical of his plans. For the first time in months, I’m proud of Wall Street.
Tonight’s speech by Barack Obama isn’t a true State of the Union, but it’s close enough. Republicans will even have a response given by Louisiana Gov. Bobby Jindal.
Live-blogging will begin tonight around 8:30pm or so, I hope you’ll join us.
Good luck searching through the omnibus spending bill:
The $500 billion omnibus spending bill to fund the most of federal government for the rest of the year will be debated in the House this week. And it has now finally been posted online.
It’s a PDF of scanned pages, meaning it can’t be searched or parsed in any other way. All 1,133 pages of it. Same with the 1,845-page explanatory statement.
That’s placing form over substance, putting a bill online in a useless format.
The bill combines spending for several agencies. On parts of the bill posted on the House Appropriations Committee website, you can literally handwritten notes and crossed out lines on various pages of the legislation. You can see an example on page 9 on the section of the bill dealing with appropriations for “Agriculture, Rural Development, Food and Drug Administration, and Related Agencies.”
You can still go through and find the pork, but the lack of a tool to search the document makes it more difficult.
“I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadily resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people.” – Grover Cleveland
“We need earmark reform,” Obama said in September during a presidential debate in Oxford, Miss. “And when I’m president, I will go line by line to make sure that we are not spending money unwisely.”
President Obama should prepare to carve out a lot of free time and keep the coffee hot next week as Congress prepares to unveil a $410 billion omnibus spending bill that’s riddled with thousands of earmarks, despite his calls for restraint and efforts on Capitol Hill to curtail the practice.
The bill will contain about 9,000 earmarks totaling $5 billion, congressional officials say. Many of the earmarks – loosely defined as local projects inserted by members of Congress – were inserted last year as the spending bills worked their way through various committees.
In case you’re wondering, the highest number of earmarks in a single year is 13,997 (2005) at a cost of $27.3 billion. Though the number of earmarks dropped to 9,963 in 2006, the cost surpassed the previous year at $29 billion.
Obama has pledged to “slash earmarks to no greater than 1994 levels and ensure all spending decisions are open to the public.” This spending bill isn’t a great start on that promise.
You can read the FY 2009 Omnibus Appropriations Act here.
H/T: Club for Growth
President Barack Obama made a trip to Canada this week to settle fears over the “Buy American” provision in the so-called “stimulus” package:
President Barack Obama on Thursday moved to reassure business and trade partners that the “buy American” provision of the economic stimulus package will not further harm the economy.
Critics of the measure, including foreign trade partners, business groups and even some U.S. industries that use steel and other products, have called “buy American” protectionist and complained it will drive up the cost of business.
Obama, who met with Canadian Prime Minister Stephen Harper for several hours in Ottawa, said he told his counterpart the United States would abide by existing trade pacts.
“I want to grow trade and not contract it,” Obama said. “And I don’t think that there was anything in the recovery package that is adverse to that goal.”
The provision mandates that any construction or infrastructure project in the “stimulus” bill would be required to use American metals, like iron and steel, unless costs were to exceed 25%. This misguided provision has sparked fears of a trade war.
In 1845, Frédéric Bastiat wrote the Petition of the Candlemakers, satire that pointed out the follies of protectionism to French lawmakers:
You are on the right track. You reject abstract theories and little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
We come to offer you a wonderful opportunity for your — what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice — your practice without theory and without principle.
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Competition spurs improvements and lower prices. Protectionism is what brought us the Smoot-Hawley tariff in 1930, an interventionist economic policy that exacerbated economic problems which eventually led to the Great Depression.
Policies like “Buy American” will only cause retaliation in other parts of the world. We cannot afford that in the middle of a recession.
With Wall Street already showing absolutely no confidence in Barack Obama and Tim Geithner, the president is announcing tax increases in an attempt to cut the budget deficit by half in four years:
A summary of Obama’s budget request for the fiscal year that begins in October will be delivered to Congress on Thursday, with the complete, multi-hundred-page document to follow in April. But Obama plans to unveil his goals for scaling back record deficits and rebuilding the nation’s costly and inefficient health care system tomorrow, when he addresses lawmakers and budget experts at a White House summit on restoring “fiscal responsibility” to Washington.
Yesterday in his weekly radio and Internet address, Obama said he is determined to “get exploding deficits under control” and said his budget request is “sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline.”
Reducing the deficit, he said, is critical: “We can’t generate sustained growth without getting our deficits under control.”
To get there, Obama proposes to cut spending and raise taxes. The savings would come primarily from “winding down the war” in Iraq, a senior administration official said. The budget assumes continued spending on “overseas military contingency operations” throughout Obama’s presidency, the official said, but that number is lower than the nearly $190 billion budgeted for Iraq and Afghanistan last year.
Obama also seeks to increase tax collections, mainly by making good on his promise to eliminate some of the temporary tax cuts enacted in 2001 and 2003. While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule in 2011. That means the top tax rate would rise from 35 percent to 39.6 percent, the tax on capital gains would jump to 20 percent from 15 percent for wealthy filers and the tax on estates worth more than $3.5 million would be maintained at the current rate of 45 percent.
Obama also proposes “a fairly aggressive effort on tax enforcement” that would target corporate loopholes, the official said. And Obama’s budget seeks to tax the earnings of hedge fund managers as normal income rather than at the lower 15 percent capital gains rate.
Overall, tax collections under the plan would rise from about 16 percent of the economy this year to 19 percent in 2013, while federal spending would drop from about 26 percent of the economy, another post-World War II high, to 22 percent.
Add this to the list of “Things Not To Do During A Recession.” Soak the achievers and give absolutely meaningless tax cuts, $13 dollars a week, to the rest of us while the government continues to plunge us further into debt.
Enough with wealth envy and populism. Let’s cut taxes for everyone, cut spending and kill the corporate income tax.