Obama's Plan Would Cost Another $20 Billion

Group says his proposals would lead to higher taxes.

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President Obama's agenda spelled out in his well-received State of the Union address would boost spending an additional $20 billion and lead to higher taxes, according to a line-by-line analysis from the National Taxpayers Union Foundation. [See photos of the Obamas behind the scenes.]"President Obama's speech last night hinted at tax reform, and spending restraint, but also opened the door to tax increases and major spending initiatives," said NTUF Senior Policy Analyst Demian Brady. "Americans heard encouraging words about more efficient government, but little in the way of specifics about spending priorities. This leaves taxpayers wondering not only whether the federal budget deficit is headed upward or downward, but also by how much." [See a slide show of 5 reasons Obama is the same as Bush, Clinton.] In their report provided to Whispers, the foundation conceded that the $20 billion in additional spending was far less than the additional $70 billion in his last State of the Union where he also called for a budget spending freeze and earmark ban.Here is the summary of the full report:
Study: Proposals in State of Union Speech Would Boost Spending over $20 Billion, but Lack of Detail Obscures True Price TagJanuary 26, 2011By Pete SeppBy Douglas Kellogg(Alexandria, VA) – President Obama's statement in yesterday evening's State of the Union speech that "the rules have changed" will likely surprise many taxpayers hoping for more specifics on how much they'll save – or pay – due to his fiscal policy proposals. According to a line-by-line analysis of his State of the Union speech by the non-partisan National Taxpayers Union Foundation (NTUF), all the quantifiable items in President Obama's speech taken together would increase federal spending by more than $20 billion, but the large number of items whose impact is unclear could dramatically affect this total."President Obama's speech last night hinted at tax reform, and spending restraint, but also opened the door to tax increases and major spending initiatives," said NTUF Senior Policy Analyst Demian Brady. "Americans heard encouraging words about more efficient government, but little in the way of specifics about spending priorities. This leaves taxpayers wondering not only whether the federal budget deficit is headed upward or downward, but also by how much."Among the findings of NTUF's analysis:* President Obama outlined items whose enactment would increase federal expenditures by a net of $21.349 billion per year, compared to the $70.46 billion in higher annualized costs to taxpayers that he called for in his 2010 State of the Union speech.* Obama outlined 15 proposals with a fiscal impact last night, five of which would boost spending, three of which would cut them, and seven of which had costs or savings that could not be ascertained from NTUF's accounting procedures. In 2010 NTUF concluded that about half of the spending-related items he discussed during that speech also had indeterminate fiscal consequences.* The single largest item Obama mentioned was increased "investment" in transportation infrastructure, which according to available sources could amount to $50 billion in additional outlays. Other large initiatives included $1.35 billion in possible higher spending for the "Race to the Top" educational program.* NTUF also identified several elements that could yield budgetary reductions for taxpayers. In 2010, Obama announced a three-year freeze on certain discretionary spending. He now proposes to extend that freeze for another two years, for net additional savings of $15 billion annually. Furthermore, he signaled support for medical tort reform, which could save $2.06 billion per year in Medicare and Medicaid spending.* However, the most important fiscal policy aspects in Obama's speech are the number of blanks the President left behind for taxpayers. For example, his highly generalized call to "merge, consolidate, and reorganize the federal government" holds potential for large reductions in expenditures, but this is by no means guaranteed. Proponents for a Department of Homeland Security argued that consolidating programs under such an agency could help streamline bureaucracy, but there is little evidence of substantial savings to taxpayers from this venture.