published Tuesday, September 20th, 2011

Obama's veto promise

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    President Barack Obama talks about the ongoing budget negotiations on Monday in the briefing room of the White House in Washington.

It had to come to this. After getting his nose bloodied every time he offered Republicans a reasonable compromise on debt reduction -- balancing spending cuts and tax offsets -- President Obama finally had to acknowledge that there will be no budget compromise short of a plebiscite. That, apparently, will come in the 2012 elections.

For the interim this year and next, Obama has at last drawn a blunt and necessary line in the sand: He promised Monday to veto any proposal from the joint House-Senate debt-reduction committee that relies solely on spending cuts to such vital programs as Social Security and Medicare, and that fails to raise revenue by closing corporate tax loopholes and ending the previous Bush administration's enormously unfair tax cuts for the ultra-wealthy, who now enjoy effective tax rates far lower than those on ordinary Americans.

In making that pledge, he issued his own proposal to cut $3 trillion over the next 10 years from the nation's projected federal debt, in addition to the $1 trillion agreed to in the summer debt-ceiling accord. Roughly half of the new $3 trillion in savings would result from reductions in spending, and the other half from tax increases, which Republicans have promised to deny.

Obama rightly and passionately emphasized that a balance of spending cuts and tax increases was required for basic fairness.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," he asserted. "This is not class warfare," he declared. "It's math."

The tax increases would come from letting the high-end Bush tax cuts expire for the wealthiest 2 percent of Americans, and from reform of the corporate tax structure. That's imminently fair. The needless Bush tax-cuts lavished the bulk of the benefits on the richest 1 percent of Americans -- the multi-millionaires and billionaires who reaped the lion's share of the immense dividend, capital gains and income tax breaks. Reform of the corporate tax codes is equally vital. Current loopholes typically let more than half of the nation's rich corporations avoid paying any taxes.

Obama's proposed spending cuts would include $580 billion in health and entitlement programs, including $248 billion in Medicare and $72 billion in Medicaid over the next decade. Medicare savings under Obama's proposal, however, would not entail an increase in Medicare eligibility age or core benefits. Rather, they would end the egregious subsidies to for-profit insurers that Republicans shifted from the general Medicare budget to the insurance industry in the 2003 Medicare modernization act. Another $1.1 trillion in spending cuts would come from ending the wars and withdrawing from Afghanistan and Iraq.

Obama's proposal marks a welcome shift in his own leadership, and in the debate on the best way to reduce national debt down to the affordable 2-to-3 percent range of GDP over the decade. It offers a direct and necessary counter-point to the irrational Republican mantra that it's unfair, untimely and wrong to require the nation's most privileged and rich corporations and super-wealthy individuals to give up their egregiously unfair tax advantages and pay a fair-share of the burden to reduce the nation's cumulative debt.

Indeed, roughly half of the nation's current $14.3 trillion in debt comes from the prior Bush administration gratuitous squandering of budget surpluses and an unthinkable plunge into unaffordable tax cuts while plunging into debt for two wars. That history of gross fiscal malfeasance must be reversed by fair burden-sharing. It's past time for Obama to join this cause. His re-election will depend on his staying this course.

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AndrewLohr said...

Tax hikes happen, but spending cuts, or even growth slowdowns?

What works? Countries in fiscal trouble that got out used about $6 in spending cuts for $1 in tax increases.

Yeah, simplify the tax codes, so we can produce wealth instead of paperwork.

Jesus Christ is rather libertarian, as I like to post.

September 20, 2011 at 12:27 a.m.
nucanuck said...

Andrew, you should have Jesus help you with economics, you seem to have quite a deficit.

September 20, 2011 at 1:52 a.m.
conservative said...

Baloney! Your Marxist fantasy is only going to believe by fellow travelers. Even the Demoncrats have in the past and will now, oppose most of his plan. You must have missed the mid term and special election results where the Demoncrats lost big. In a radio interview prior to the mid term election, Obamboozler said the election would be a referendum on him and his policies. The Demoncrats lost the House and continue to lose more house seats. America can't wait untill we vote him and his fellow travelers out next year. This class warfare talk will only increase the margin of defeat.

September 20, 2011 at 7:55 a.m.
01centare said...

Lib4, your obvious racism and bigotry for a black man {"mulatto"} in the white people's house is showing. If Jesus Christ returned to earth in the form of a black man, hispanic(latino), or {"mulatto"} you'd be attacking Him too at each and every turn.

President Obama is the first brilliant educated president the U.S. has had in quite some time. Who just so happens to be black {or "mulatto" as you perfer to call him), and for whatever reason, that frightens the he/ll!! out of you and your kkkin.

September 20, 2011 at 11:47 a.m.
Livn4life said...

Wow, a lot of vitrol on here. But I wonder if the President also has bloody ears to Not Hear what the country is saying. We cannot continue on the same line that he is leading. So many say "vote him out." I'd support that. But...whomever the "vote him out" winner is, will likely make us continue on a path that is not heading out of the woods nor even going toward the daylight. We are at a tough juncture my fellow Americans. And the sad part is there is no one looming on the horizon who gives any indication, he or she has the guts to do what would really help this nation. So go on delude yourselves into thinking from the left, how stupid are the righties; from the right how arrogant and out of touch are lefties. Meanwhile, the fun continues and our economy declines. Maybe it is not so much a money problem as a heart problem. People's hearts just do not seem to be in the proper place. Is there a political heart surgeon available?

September 20, 2011 at 1:02 p.m.
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