Bam, it’s time to cut spending – period
By BETSY McCAUGHEY July 27, 2011
President Obama is demanding that the debt ceiling be raised by a whopping amount — two or three times the normal increase — to let the federal government keep on borrowing past the 2012 election. The ceiling is generally raised once or twice a year, but Obama claims he wants to keep it “out of politics” in an election year.
Of course he does: Out-of-control government spending is the most important issue facing voters — but also one that undermines his chances of re-election.
The 2012 election should be a referendum on the president’s spending and borrowing record. In his first year, Obama pushed federal spending from 20 percent of gross domestic product to 25 percent. Only once before did federal spending reach that level — when the United States plunged into World War II.
Add in state and local spending, and government programs now consume 42 percent of GDP. In other words, 42 percent of we what produce going to work every day goes for government. And this is before the costly new entitlements created in the Obama health law go into effect in 2014.
Worse, an increasing share of this spending is on borrowed money. The deficit has shot up from $500 billion in the seventh year of the Bush presidency to $1 trillion the next year, then $1.9 trillion in 2010. It’s borrowing mania.
The president’s solution amounts to four words: “balanced approach” and “shared sacrifice.” Sounds good — but they’re all weasel words.
Obama says he wants a “balanced” approach that combines spending reductions with tax-code changes to make the wealthiest Americans do their part.
But the Obama health law already raised taxes by a whopping $503 billion (over 10 years, according to the Joint Committee on Taxation). You haven’t felt those tax hikes yet, because they don’t go into effect until 2013 or later, but they’re already the law.
If you and your spouse make $250,000 a year, your Medicare payroll tax is going up from 2.9 percent to 3.8 percent. If you own stocks or bonds or a home, and you sell at a profit, your “unearned income” on that transaction will be hit with a new 0.9 percent tax.
In other words, the tax-hike side of the balanced approach was done last year. It’s time for the spendaholics in Washington to cut spending, period.
What about “shared sacrifice”? The Obama health law imposed plenty of sacrifice on seniors and baby boomers: It slashed funding for Medicare by $500 billion over the next decade.
It uses those “savings” to pay for two entitlements: a huge increase in Medicaid enrollment and new subsidies for middle-income Americans (families earning up to $88,000 a year) to buy private health plans.
Thanks to the Obama health law, an astonishing 85 million people will be enrolled in Medicaid (or the children’s version of it) by 2014 — nearly a third of all Americans below 65.
For true “shared sacrifice,” why not look to the sector that’s gotten fat under Obama? Uncle Sam added a net 107,057 new federal jobs in fiscal 2009 and 2010, even as Obama’s stimulus preserved the state and local government work forces.
Stop threatening to withhold Social Security checks, Mr. President — furlough federal workers before going after Grandma again.
Betsy McCaughey is a former New York lieutenant governor and author of “The Obama Health Law: What It Says and How to Overturn It.”
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