More Notes On The Budget Debate

Heritage.org posted an analysis of President Obama's budget yesterday. 

The article at Heritage.org reports:

"Under the President's budget, the deficit in 2011 will hit a new record of $1.645 trillion, and the national debt held by the public over the next 10 years would nearly double, rising by nearly $7.2 trillion.  This measure of debt refers to debt held by the public net of financial assets."

The article lists the changes in tax policy listed in the budget proposed by President Obama (note that the scoring of these proposals is very creative):

• He proposes to raise the top tax rate on capital gains and dividends to 20 percent from 15 percent and lists this as a tax cut that reduces revenues by $124 billion over 10 years.
• He proposes to extend the Bush tax cuts for low- and middle-income families and correctly includes this extension in the revenue baseline. But then, breaking with past practice, he leaves the tax relief for upper-income individuals and small businesses out of the baseline and thus conveniently has no reporting of the resulting tax hike.
• He proposes to prevent the Alternative Minimum Tax from rising in 2013, and then in classic Washington style proposes $321 billion in new tax hikes to offset the cost of not raising taxes.

Debt. Under the President's budget, despite the proposed tax hikes, publicly held debt (net of financial assets) rises from $9.5 trillion in the current year to $16.7 trillion by 2021.

The recommendations of the Deficit Reduction Commission were totally ignored.  Although I did not totally agree with the Commission's conclusions, their suggestions would have made a good place for the debate to begin.  Unfortunately, the President's budget does not even engage in the debate--he ignores the current discussion and continues down the road that brought us to the budget crisis we are currently experiencing.

The article concludes:

"The American system of government is intended to compel opposing forces to struggle, for in the struggle is refinement, improvement, and a crude but effective system of checks and balances. However, this system generally cannot function to solve difficult problems when the President thoroughly abdicates his leadership role. With this budget, the President has done just that, and now Congress must find its own way to regain control of the nation's finances."

This is a time in the history of our country when we desperately need leadership.  Hopefully Congress can provide it at this time.