Obama Speech is Weak and Has TOO Many Hole

Today, President Obama gave a speech on deficit reduction. Besides pandering to the Liberal base, the speech is nothing more than a class warfare tactic to increase the tax on the rich. America heard that cliché before many times and I think we are sick of the rhetoric. When Liberals and Democrats say tax the rich, they meant to tax everybody. Look at the price of food and other consumable goods. Look at the gas price we are currently paying. These are form of taxes that everybody pays.

Democrats had their chance when they took over in 2006. Since then, they didn't create a balance budget. In reality, they weren't serious about it. Initially, Obama created a Fiscal Commission and that was a façade. It was ceremonial pageantry. In fact, Obama ignored the commission’s recommendations and disregarded many of their suggestions from the budget. Now, Obama decides to play leadership. In the speech today, Obama wants to put another commission to solve the problem he refuses to confront. This is called "kicking the can" down the road. Obama is hoping a miracle that the deficit will fix itself.

(Weekly Standard) House Budget chairman Paul Ryan's office highlights "key facts" from Obama's speech:

· Counts unspecified savings over 12 years, not the 10-year window by which serious budget proposals are evaluated.

· Postpones all savings until 2013 – after his reelection campaign.

· Runs away from the Fiscal Commission’s recommendations on Social Security – puts forward no specific ideas or even a process to force action.

Calls for the appointment of another commission, after mostly omitting from his Fiscal Year 2012 Budget any of proposals submitted by the commission he appointed last year.

· Non-specific framework fails to meet his Fiscal Commission's own deficit-reduction goals.

Taxes:
· Proposes to raise taxes on the American people by more than $1 trillion, devastating our fragile economy and stifling job creation.

· Endorsed the Fiscal Commission’s ideas on taxes, which specifically called for lower tax rates and a broader base, but then called for higher tax rates. Which is it?

· Government health and retirement programs are growing at more than twice the speed of the economy. At the current rate of spending, revenue would have to rise “by more than 50 percent” just to keep debt at its current level, according to the Government Accountability Office. That means tax increases across-the-board, now and in the future.

Medicare:
Instead of proposing structural reforms that would actually reduce health care costs, the President proposed across-the-board cuts to current seniors’ care.
· Strictly limits the amount of health care seniors can receive within the existing structure of unsustainable government health care programs.

· Gives more power to unelected bureaucrats in Washington to determine what treatments seniors should or shouldn’t get, against a backdrop of costs that continue to rise.

· Conceded that the relentlessly rising cost of health care is the primary reason why the nation is threatened by debt, and implicitly conceded that his health care law failed to solve the problem.

· Eviscerates the only competitive element anywhere in health-care entitlement programs – the competition amongst Part D prescription-drug plans – which allowed the drug benefit to come in 41 percent under budget.

Medicaid:
Acknowledges that the open-ended financing of Medicaid is a crippling financial burden to both states and the federal government, but explicitly rejected the only solution to this problem, which is to give states the freedom they need to design systems that work for the unique needs of their own populations.

Defense:
Proposes more cuts on top of $78 billion in cuts included in his own defense budget, which he proposed just two months ago – all at a time when he continues to task the military with new missions.

Dont Let Government Scare You To Raise the Debt Ceiling. It is Bogus

Ronald Reagan said, “Government is the problem, not the solution.” That statement speaks volumes and it is share by many Americans, especially the Tea Party Movement. Republicans and Democrats are guilty for not telling the truth. We are one week away till we meet our maximum debt ceiling. The media, Republicans, and the Democrat are claiming an eventual shutdown in the government. That is nonesence. It will mean public employees may see a delay in their paycheck. It will also mean that Congress cannot create any new debt, which is good. With the revenues collected from the tax payers, there is enough money to pay our interest debt obligations, including Social Security.




The Obama Administration says, “Failure to raise debt limit quickly could cripple US.”

but,

(Tucson Citizen) The Reason Foundation, a libertarian, free-market think tank takes a different view:

The statutory debt limit, or debt ceiling, was designed to control congressional spending by limiting the amount of debt the federal government could accumulate. Clearly, it has not fulfilled its legislative purpose. In fact, the government has lost its ability to monitor its own spending. Having to raise the debt ceiling yet again is a sign that Congress has failed to do what is necessary to get the nation’s finances in order. Here are three myths about the debt ceiling, each one rebutted by a fact.

Myth 1: Failure to increase the debt ceiling is insanity. Unless we increase the debt ceiling, the U.S. government will default on its debt.

Fact 1: The federal government has other options. If the debt ceiling is not increased, the Treasury Department can make interest and debt payment its first priority to avoid a default. Then it can essentially put the government on a stringent pay-as-you-go basis.

The Obama administration warns of an economic armageddon if Congress doesn’t raise the debt ceiling. It is called “insanity” not to take the simple step of allowing the government to borrow more money. Treasury Secretary Timothy Geithner has warned that if we don’t increase the debt ceiling the U.S. would default, resulting in a bond market crash with disastrous impacts felt at home and abroad.

Technically, if the debt nears its statutory limit, the Treasury Department cannot issue new debt to manage short-term cash flows or manage the annual deficit—the government may therefore be unable to pay its bills. But in the real world things are different.

First, if the debt ceiling is not increased it doesn’t mean the federal government will have to repay the entire debt at once. The government just won’t be able to increase its borrowing. Americans understand the difference between not being able to borrow more money and defaulting on one’s mortgage.

Also, while Congress has never before refused to raise the debt ceiling, it has frequently taken its time about doing so. In 1985, for example, Congress waited nearly three months after the debt limit was reached before it authorized a permanent increase. In 1995, four and a half months passed between the time that the government hit its statutory limit and the time Congress acted. And in 2002, Congress delayed raising the debt ceiling for three months. It took three months to raise the debt limit back in 1985 as well. In none of those cases did the world end.

More importantly, the Treasury Department has other options. For instance, if the debt ceiling is not increased, the Treasury can prioritize interest and debt payment to avoid a default.

If Congress refuses to raise the debt ceiling, the federal government will still have more than enough money to fully service the debt. This year, for instance, about 6.1 percent of all projected federal expenditures will go to interest on the debt, and tax revenue is projected to cover about 60.1 percent of all government expenditures. With roughly 10 times more income than needed to honor its debt obligations, why would the government ever default?

Let’s sum it up: As long as the government continues to pay interest on the debt, then it technically is not in default. With tax revenues expected to be $2.2 trillion, interest payments amount to roughly $300 billion—this would still leave $1.9 trillion in revenues to pay for the government’s most important priorities. For instance, lawmakers could decide to honor the promises made to people benefiting from entitlement spending, such as Social Security, Medicare, and Medicaid. In that case, even after paying for all of the entitlement spending, the Treasury would still have $300 billion left.

Would that involve cuts in government spending? Absolutely. But it could, and should, be done.

Would it make the bond market nervous? Yes, it would. Not raising the debt ceiling would probably introduce additional uncertainty. However, market participants (especially foreign creditors who now own a majority of our debt held by the public) may have already changed their expectations due to the increased attention to this issue and because of the alarmist language being used by the Treasury and White House.

With some signs of life—such as increases in consumer spending—we could expect declines in demand for Treasury and fixed-income assets. However, the Federal Reserve is still actively purchasing notes, which will likely increase demand. Ultimately, it makes predictions on the effect of interest rates very tricky.

One thing is certain: not increasing the debt ceiling will make us travel to a new equilibrium, which almost always means a certain level of disruption in the short term. But shouldn’t such change be the easiest way to mitigate short-term concerns while moving to a more sustainable long-term equilibrium?

Those who are worried about default should realize that our ability to remain solvent depends on our continued commitment and ability to pay the interest on our debt, not on our willingness to raise the debt ceiling. As long as we continue to run deficits, our ability to borrow money cheaply, with low interest rates, is the key to avoiding default.

This could change if investors become worried about their chances of getting paid back. In that case, they might find some safer or more profitable place to invest their capital than the United States government. Also, they may demand an increase in the interest rate for the money they lend. Either of these changes could result if the U.S. government’s reputation as a conscientious debtor is called into question by a continued increase in the demand for funds.

The bottom line is that the government must make serious changes to the way it spends and borrows money, it must stop paying the interest on the debt by borrowing additional money, and it must stop making benefit promises it will never be able to deliver.

Both Moody’s and Standard & Poor’s have warned that our credit rating will be reduced unless we get a handle on our national debt. We’ve heard a lot recently about the European debt crisis, but, as one senior Chinese banking official recently noted, in some ways the U.S. financial position is more perilous than Europe’s. “We should be clear in our minds that the fiscal situation in the United States is much worse than in Europe,” he recently told reporters. “In one or two years, when the European debt situation stabilizes, [the] attention of financial markets will definitely shift to the United States. At that time, U.S. Treasury bonds and the dollar will experience considerable declines.”

Myth 2: These are extraordinary times. We need to increase the debt ceiling now and will cut spending later.

Fact 2: In the last 10 years, Congress has raised the debt ceiling 10 times, sometimes twice in the same year. Congress has raised the debt ceiling 98 times since 1940. The government has lost its ability to monitor its spending. Having to raise the debt ceiling again is a sign that Congress has failed to do what is necessary to get the nation’s finances in order.

Myth 3: Democrats are the big spenders and are the party of debt. We know this because they now want to increase the debt ceiling while Republicans oppose the increase.

Fact 3: Historically, the party in power always wants to increase spending. As a result, lawmakers in power—regardless of party affiliation—overwhelmingly vote to increase the debt limit.

In conclusion, the data presented above reveals that the debt limit, far from providing fiscal discipline, has in fact served only as a symbolic cap that Congress, regardless of the party in power, will simply push higher and higher as spending increases dictate.

UPDATE: Obama Budget Proposes Broader Unemployment Taxes

Forget what Obama said about not raising taxes over the last two year. In today's headlines, Obama wants to increase unemployment taxes. Hypocrite! It would be easier to give business more of a tax break so they can hire employees and expand their business. Therefore, there would be a larger pool of workers to fund the unemployment insurance program. It is commonsense!

(WJS) WASHINGTON—President Barack Obama's budget proposal is expected to give states a way to collect more payroll taxes from businesses, in an effort to replenish the unemployment-insurance program. The plan could cause controversy at a time when the administration is seeking to mend fences with corporate America.

The proposal would aim to restock strained state unemployment-insurance trust funds by raising the amount of wages on which companies must pay unemployment taxes to $15,000, more than double the $7,000 in place since 1983.

The plan, which would take effect in 2014, could increase payroll taxes by as much as $100 billion over a decade, according to a person involved in its construction.

To avoid hitting businesses with a tax increase during the economic recovery, the proposal would delay the new rules until 2014. The plan is expected to be included in Mr. Obama's budget proposal for fiscal 2012, to be released Monday.

Obama Claims He Lowered Taxes Over the Last Two Years. YAWN

Obama is delusional at best..................

(CNSNews.com) – President Obama’s assertion on Sunday that he “didn’t raise taxes once” is “blatantly false,” a taxpayer watchdog group says. Obama made the claim in his pre-Super Bowl interview with Fox News host Bill O’Reilly.

According to Americans for Tax Reform (ATR), President Obama has signed into law at least two dozen tax increases. In chronological order:

Feb. 4, 2009 – Obama signs federal tobacco tax hike: Just sixteen days into his presidency, Obama signed into law a 156 percent increase in the federal excise tax on tobacco – a hike of 62 cents per pack. Obama’s signature on this tax hike was a violation of his central campaign promise – a “firm pledge” that no American making less than $250,000 would see “any form of tax increase”. The median income
of smokers is just over $36,000.

March 23, 2010 – Obama signs the healthcare bill into law: Obama’s signature on the health care bill enacted two dozen new or higher taxes (at least seven of which violate his “firm pledge” on taxes), including but not limited to:

-- Individual Mandate Excise Tax
-- Employer Mandate Excise Tax
-- Small business 1099-MISC Information Reporting
-- Surtax on Investment Income
-- Excise Tax on Comprehensive Health Insurance Plans
-- Hike in Medicare Payroll Tax
-- Medicine Cabinet Tax
-- HSA Withdrawal Tax Hike
-- Flexible Spending Account Cap – aka “Special Needs Kids Tax”
-- Tax on Medical Device Manufacturers
-- "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI
-- Tax on Indoor Tanning Services
-- Elimination of tax deduction for employer-provided retirement Rx drug coverage
-- Blue Cross/Blue Shield Tax Hike
-- Excise Tax on Charitable Hospitals
-- Tax on Innovator Drug Companies
-- Tax on Health Insurers
-- Biofuel “black liquor” tax hike
-- Codification of the “economic substance doctrine”

Now let’s turn to the second part of Obama’s claim: “I lowered taxes over the last two years. I lowered taxes for the last two years.”

• President Obama’s entire claim of being a net tax-cutter rests merely upon the temporary tax relief he has signed into law. The tax increases Obama has signed into law have invariably been permanent. In fact, Obama signed into law $7 in permanent tax hikes for every $1 in permanent tax cuts

• Over 90% of the dollar value of the tax cuts Obama signed into law are only temporary

• 100% of the tax increases Obama signed into law are, however, permanent

• Permanent changes to tax law signed by Obama amount to a net tax hike of $618.7 billion