A Preview of the President’s Budget Speech
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Today, President Obama will address the nation regarding Washington’s efforts to become fiscally responsible. The city has been buzzing for the past few weeks about budgets, spending, taxes, and the fiscal future of our nation. The president is expected to address some of the proposals being discussed in Washington. In excerpts of his speech, President Obama said, “It’s [the Republican budget] a Trojan horse. Disguised as deficit reduction plan, it’s really an attempt to impose a radical vision on our country. It’s nothing but thinly veiled social Darwinism.”
The casual observer would assume that President Obama is referencing House Republican budget proposal regarding Medicare. But in fact, the Medicare proposal contained in the House budget is based on a framework adopted by Republican Budget Chairman Paul Ryan and Democratic Senator Ron Wyden who came together last year and produced a workable and bipartisan plan to save Medicare. A plan that does not risk benefits for those covered but puts Medicare back on track to fiscal stability and away from its $48 billion in fraudulent spending every year.
Politicians from both sides of the aisle must acknowledge the facts. The non-partisan Congressional Budget Office has concluded that Medicare bankruptcy is just eight years away – and potentially sooner (CBO Budget Director Doug Elmendorf, House Budget Committee hearing, June 23, 2011). This is not a Republican fact. It is not a Democratic fact. It’s just a fact. The question is: what are we going to do about it? (For a closer look at Medicare, check out our infographic)
According to press reports, President Obama is also expected to call for economic fairness encapsulated by the so-called “Buffett Rule,” arguing that the wealthy shouldn’t pay a smaller share of their income in federal taxes than middle-class taxpayers. Many wealthy taxpayers earn investment income, which is taxed at 15 percent, and the President has proposed that people earning at least $1 million annually—whether in salary or investments—should pay at least 30 percent of their income in taxes.
It’s time for Washington to face the facts. While some in Washington continue to talk about the “Buffett rule,” which will raise taxes on certain Americans, the facts are that this would do almost nothing in terms of deficit reduction. According to the non-partisan Joint Committee on Taxation, the official tax analysis arm of Congress, the “Buffett rule” would raise just $47 billion over the next ten years. Considering the country ran a deficit of $1.3 trillion last year, it’s clear Washington must start with cutting spending—not raising taxes.
We at Bankrupting America wouldn’t be surprised if President Obama confronts the fact that Ryan demands reductions in overall spending but raises spending on our nation’s defense as the wars wind down. Defending these increases at our recent Policy Summit, Ryan stated, “We don’t think the generals are giving us their true advice. We don’t think the generals believe that their budget is really the right budget… What we get from the Pentagon is more of a budget-driven strategy, not a strategy-driven budget.” Ryan has since apologized for this statement, saying that he misspoke. Regardless of how politicized the Pentagon’s budget may have become, the fact is that defense is the second-largest expenditure in the budget. We cannot afford to continue spending at this rate and expect to have money to spend in the future.