Winners and Losers of Obama's Budgetby Gerri Willis
Now that we've had some time to digest the President's nearly $4 trillion spending plan – I mean budget - it’s clear there are winners and losers. One of the biggest losers are the so-called wealthy Americans (people making $250,000 and more).
The budget calls for two major tax increases on the well-to-do: One - elimination of the Bush Tax cuts on people with incomes above $250,000. The other would radically change the nation's tax code implementing the so-called "Buffett Rule" taxing incomes above a million dollars at a 30% rate.
Also, estate taxes would return to their 2009 levels - a $3.5 million exemption - down from $5 million now - and a 45% tax rate - up from 35% now. So not only are we taxing these people more, we're taxing them more twice!
Also, tax breaks would be eliminated for major companies, oil and gas companies, hedge fund managers and owners of corporate jets. The list goes on and on. More losers include the Defense Department, which will see a nearly $500 billion cut. The budgets of the Justice Department and the Environmental Protection Agency will be slashed, and the President will continue his attack on NASA cutting their budget by a third of a percent.
To be fair, there are some winners. Spending on roads and highway projects will skyrocket by more than $175 billion by 2018. Two of the three departments Rick Perry was going to cut will actually see their budgets increase, by quite a bit mind you. So, that's the long and short of it, but here's the thing.
These budget projections are based, once again, on some pretty fuzzy math. For one, the President is taking credit for upwards of $850 billion in savings from ending the wars in Iraq and Afghanistan.
First of all, he's been claiming these wars have been winding down since his first year in office. Secondly, these wars were never paid for. It was all borrowed money. The top Republican on the Budget Committee Senator Jeff Sessions says: "When you cease to spend the money on the war, it's not as if there's extra money coming into the pot to spend."
So, that money he's directing at transportation projects doesn't actually exist! Also: the Obama Administration's numbers are based on some rosy predictions in the coming years including 4% GDP growth in 2014. But their predictions have never been very accurate.
Last year, the administration built its proposed budget on a projection of 2.7% growth in 2011. It turned out to be 1.7%. And while they're predicting at least 3% growth this year, many experts say it will be closer to 2%. And most of all, this entire budget is a pipe-dream; a campaign platform not an actual plan for our spending and our economy. Why?
Because tax increases are a non-starter. Instead of working with Congressional leadership to craft a consensus budget, he gets to use the bully pulpit and take his wish list on the road.
But that's what it is - all wishes and no reality, which has kind of been the theme of this entire presidency hasn't it?!