Obama's Audacious Budget Brings Back Big Government
The president must now convince Congress to support his budget proposal
Historians disagree on whether architect Daniel Burnham actually spoke the enduring credo: "Make no little plans. They have no magic. . . . Make big plans." Some believe that after his death in 1912, a colleague penned the words based on things he'd said.
Burnham, like President Barack Obama, was a Chicago transplant bent on doing big things. Obama could have been channeling him in unveiling his first budget blueprint, breathtaking in its ambition.
The 134-page document, "A New Era of Responsibility: Renewing America's Promise," envisions jump-starting the economy, ending the Iraq war, cleaning pollutants from our skies, and overhauling the nation's healthcare system. It calls for pivoting from infusing billions of dollars into a troubled economy to curbing eye-popping deficits. And it aims, during a severe economic downturn that one top adviser blamed on a "once-in-a-century confluence of macroeconomic shocks," to get the nation's fiscal house in order.
"There are times where you can afford to redecorate your house, and there are times where you need to focus on rebuilding its foundation," Obama said Thursday. "Today, we have to focus on foundations." His blueprint calls for spending $3.9 trillion this year and $3.5 trillion in the fiscal year beginning October 1. It calls for an end to the Bush tax cuts, reining in tax deductions for the wealthy, and making permanent the just enacted tax cut for the middle class. It calls for investments in education, energy, and healthcare. It calls for a line-by-line review of the budget to cut waste. And it calls for never-before-seen deficits, $1.75 trillion this year alone, and fiscal discipline going forward.
Despite Obama's ambition, not everyone is happy. From Ohio's John Boehner, the top Republican in the House: "The era of big government is back, and Democrats want you to pay for it."
Already, though, Obama has pronounced supply-side economics dead on arrival. The theory was embraced in 1981 by another new president who inherited a fiscal mess, Ronald Reagan. He believed the government could cut tax rates and still bring in more revenue because people would work harder, earn more, and pay more taxes. Obama believes George W. Bush followed suit, to dismal effect. "The past eight years have discredited once and for all the philosophy of trickle-down economics—that tax breaks, income gains, and wealth creation among the wealthy eventually will work their way down to the middle class," Obama wrote in the proposal. "In its place, we need economic opportunity to trickle up." Obama won't have his say on his every aim, because, as the Constitution requires, the budget is subject to the wishes and whims of Congress. And persuading lawmakers may take some of Burnham's magic.
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Reader Comments
Simple Economics
Obama's plan benefits his big government, not the people. While he is creating more government revenue to pay off his massive spending bill, it will take away from the purchasing power of consumers.
Raising taxes takes away money from consumers, thus leaving them less to spend, thus leading to less money going back to companies that hire the consumers, which means they will cut back on their own capital such as labor. This only will create more unemployment and has already begun a hiring freeze.
He also wants to tax the wealthy, when in reality the middle class will be feeling the burden. The wealthy are not a group of evil greedy people that have a goal of taking away and hording everybody's money (there is an incredibly small percentage like this), they are those that have become successful for working hard and thinking wisely, which is what happens in capitalism: hard work is paid off!
The wealthy are the people that hire and give people jobs, and when you cut out their budgets, they will cut out jobs. So go ahead and take away money from the people that are paying your wages and giving you the means to own a car or a house, because they will be forced to take it all away when their companies are failing because they don't have capital to expand.
This is basic economics, and it is sad that our President is unable to realize it or able to convince the people that this is the path to success when historically big governments fall. China has created great economic growth and they have stabilized it by cutting taxes and returning the capital to the people, not the government. And what does America do? We decide to raise them and expand government spending.
This is not refreshing . . .
Thats not refreshing.
Its not hard to understand that TAX CUTS, without any math, will stimulate the economy.
Make sure that more people keep MORE of there earned money, CUT government spending massively at the federal level, specifically entitlement programs and by ending the earmark process since federal spending is supposed to benefit the entire country, not just some congressmans district.
If you arent earning any income, then figure out how.
You are entitled to life liberty and the PURSUIT of happiness.
LIFE can be short and cruel or prosperous, it is up to the individual.
LIBERTY provides you with the freedom to work hard or choose not to.
The PURSUIT of happiness IS NOT and SHOULD NOT be implicitly guaranteed by the federal government, and therefore funded by those who chose to work toward that happiness.
Cut our taxes, stop spending so much frigging money. and we'll all be better off.
Rasing the minimum wage, the minimum standard for schools, and the minimum of anything, doesnt change the fact that its still the bottom. If you raise the bottom, the roof goes up too. Everything is still just as far away.
Boehner and his fellow conservatives
Had no real problem when the last Bush budget raised the federal budget to 3.1 trillion dollars, based on extending the Bush tax cuts of 2001 and 2002 permanently. The Bussh 3.1 trillion dollar budget raised defense spending to levels not seen since World War II as a total percentage of the federal budget, leaving no way whatsoever to pay for those expenses.
The Bush budget which simply tranfered money from the social spending column into the defense spending column stated that it would balance the budget by 2012:
President Bush sends Congress his final budget — a $3.1 trillion proposal for fiscal 2009. It won't land with a thud, because in most cases this year it's traveling electronically. But a metaphorical thud is expected on Capitol Hill.
The plan purports to balance the budget by 2012, while not counting war costs or another inevitable fix to the alternative minimum tax.
Congress is expected to put up a fight over cuts in discretionary spending for domestic programs — or just wait for the next president in 2009.
At least Obama has a plan for raising money to pay for his budget. Its a simple solution. Its called raising taxes. It does not require new Rube Goldberg style mathematics that conservatives must invoke when asserting that tax cuts raise government revenues.
A straight and simple budget, as well as the means of paying for it all is what came out of the Obama White House.
That at least, is refreshing.
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