The story of the sequester

On Friday, the deadline for the federal spending sequester passed without an agreement between Democrats and Republicans on what portions of the federal budget to cut. Many may wonder exactly what the sequester is and how the nation reached the point where $85 billion will be cut from federal spending with no one in Washington taking responsibility.

The sequester has its origins in the debt limit debate of the summer of 2011. As the nation’s credit rating was downgraded and the federal government neared the end of its ability to borrow, President Obama pressed Congress to raise the debt limit. In exchange for doing so, House Republicans insisted on spending cuts. By 2011, President Obama was spending nearly a trillion dollars per year more than 2008, President Bush’s most expensive year, according to the White House Office of Management and Budget. Nevertheless, President Obama and the Democrats fiercely resisted any attempts to rein in spending. For their part, Republicans were equally tenacious in their opposition to tax increases.

The stalemate was broken by the sequester. According to investigative journalist Bob Woodward, whose book, “the Price of Politics,” details the negotiations from the summer of 2011, the stalemate was broken by an agreement to delay the decision on taxes and spending cuts. Part of the agreement was a “doomsday” plan in which taxes and cuts would automatically take place if Congress failed to take action by January 1, 2013. The combination of automatic tax increases and spending cuts came to be known as the “fiscal cliff.” The compromise was signed into law as the Budget Control Act of 2011.

The 2012 election threw a wrench into the plans of both Congress and President Obama for dealing with the cliff. Both parties expected to win a convincing victory. Neither party expected that the election would end in a stalemate, a continuation of the status quo in which the Democrats controlled the presidency and the Senate and Republicans kept control of the House of Representatives, but that is exactly what happened. The election results meant that the stalemate of 2011 was doomed to be repeated.

The tax section of the fiscal cliff was settled on New Year’s Day with a compromise that raised taxes on upper income Americans and let the payroll tax holiday expire for everyone else in what the Wall St. Journal called the “largest tax increase in two decades.” Part of the tax cliff compromise included extending the deadline to deal with the spending cuts, the sequester, until March 1.

As the deadline for the sequester approached, President Obama and the Democrats reneged on the agreement that tax increases would be balanced with spending cuts. In December 2012, the Republicans offered a tax reform package that would have raised $800 billion in revenues without raising tax rates. The plan would have closed loopholes and eliminated some deductions for the wealthy. Now President Obama, according to Factcheck, wants the revenue package previously offered by Speaker Boehner along with the tax increases that he has already received.

After the fiscal cliff deal, Republicans warned President Obama that they would accept no more tax increases. Mitch McConnell (R-Ky.) wrote in an op-ed on Yahoo, “That debate is over. Now the conversation turns to cutting spending on the government programs that are the real source of the nation’s fiscal imbalance.”

Because the tax increases in January were automatic, the Republicans had no leverage. If they had not compromised with the Democrats, tax rates would have gone up even more and impacted virtually every American. In the sequester, the opposite is true: Spending will be cut automatically if Congress does not act.

President Obama and the Democrats desperately want to avoid any sort of cuts to federal spending. Nevertheless, by tying sensible cuts to tax hikes that the Republicans find unpalatable they have guaranteed that the sequester will happen. There are three possible reasons for this strategy.

First, having agreed to the spending cuts only to get an increase in the debt ceiling in 2011, the Democrats now want to make the cuts as haphazard and painful to American voters as possible. If they can cause pain to the voters and make them believe that the Republicans are responsible, it may give them a victory at the polls in 2014 that will guarantee future tax hikes and avoid any possibility of reining in spending.

Second, Obama undoubtedly expects that if he can force the Republicans to cave into his demands once again that it will further splinter the party. With the Republicans fragmented, demoralized and pointing fingers at each other, it will be easy for Obama to gain new concessions in the future. He will need them. The federal government will reach its debt limit again in a few months.

Third, political observer Dick Morris theorizes that Obama wants the sequester to take effect so that he can blame Republicans for the economic downturn that his policies are causing. Writing in The Hill, Morris notes that Obama and the Democrats have imposed a multitude of new taxes totaling $300 billion. According to an analysis by the Washington Post, the cuts for 2013 only come to $85 billion, 28 percent of the amount that Obama’s tax increases have removed from the economy.

President Obama has attempted to cast the blame for the sequester on Congress, but Bob Woodward who was present during the 2011 negotiations disputes that. Writing in the Washington Post, Woodward described how the idea for the sequester originated with Jack Lew, at the time the White House chief of staff, and Rob Nabors, the White House chief of congressional relations. According to Woodward, President Obama personally approved the plan before it was presented to Senate Majority Leader Harry Reid (D-Nev.).

Woodward reported that representatives of the Obama Administration told him that he would “regret doing this” after he pointed out the inconsistencies in the Obama Administration’s statements. The exchange is detailed in the Wall St. Journal, which also points out that administration officials have attempted to intimidate at least two other journalists who have published stories critical of Obama.

There were several congressional attempts to limit the impact of the sequester. Factcheck agrees that Republicans in the House passed two bills in 2012 that would have replaced the sequester’s defense cuts with entitlement cuts. These bills died in the Senate. In the current term, two bills were proposed in the Senate, but neither passed. A Democratic bill would have replaced the sequester cuts with alternative cuts and more tax increases. The Republican version would have required President Obama to propose alternative cuts without tax increases.

In last days of February, Republicans offered to give President Obama the power to choose which programs to cut in order to mitigate the pain of the sequester. President Obama threatened to veto the bill if it passed Congress, instead opting for the across-the-board, untargeted cuts. The White House told the Defense News, “There is no way to cut spending this dramatically over a seven-month period without drastically affecting national security and economic priorities. Moreover, [it] would explicitly protect pork barrel spending and, in so doing, would reduce the President’s ability to protect national security.”

In reality, even though the sequester cuts almost a trillion dollars from federal spending over ten years, total federal spending will increase even if there is no compromise to avert the cuts. According to an analysis of Congressional Budget Office spending figures in Forbes, the sequester cuts are subtracted after adding in inflation adjustments and spending exempted from the cuts. The result is that spending will increase by $110 billion after the sequester cuts are accounted for.

On Friday, the sequester officially took effect as Obama ordered federal agencies to begin the initial $85 billion in cuts. As the Wall St. Journal pointed out, President Obama may be the biggest loser if Americans find that spending cuts really aren’t so bad after all.

Originally published on Examiner:

http://www.examiner.com/article/week-review-the-sequester-takes-effect?cid=db_articles

GOP revolt blocked Boehner’s spending amendment

According to a report by Dick Morris, Republican rebels scuttled a last minute attempt by Speaker John Boehner attach an amendment to the fiscal cliff deal that would have tied spending cuts to the tax increases. If the amendment had passed, it would have sent the bill back to the senate which would have had to vote to accept or reject it.

Bloomberg and CBS News also reported on Boehner’s attempt to tie the tax increases to spending cuts. According to CBS, the amendment would have required 217 Republican votes to pass. The final bill garnered 85 Republican votes and was passed primarily with Democratic support.

Among the Georgia delegation, the vote largely followed party lines. Rep. John Barrow (D-12) crossed party lines to vote against the bill and Rep. John Lewis (D-5), whose wife recently passed away, did not vote.

If the amendment had passed, it is unlikely that it would have passed the senate and the fiscal stalemate would have continued. A Democratic leadership aide told CBS, “We will absolutely not take up the House bill if they change the bipartisan agreement reached in the Senate" and Senate Majority Leader Harry Reid told Bloomberg, “My senators have gone home.”

The Republican opposition may have been due to unwillingness to accept any tax increases as part of a compromise to avert the fiscal cliff. However, on the Dec. 21 edition of the Michael Medved Show, even Grover Norquist of Americans for Tax Reform agreed that compromising with President Obama on tax rates for the wealthy would not be considered a vote for a tax increase because taxes were already scheduled to go up.

“They made it clear because they had a previous vote to extend it [the Bush tax rates] for everybody in the country,” Norquist told Medved, “so the two votes taken together make it very clear, we wanted to extend it for everybody, but in order to get something to the senate and get it passed, let’s extend it for as many as they [the Democrats] will allow. I mean if somebody’s thrown anybody out of the lifeboat, it’s the Democratic senate and the Democratic president….”

The Republican revolt ended quickly as the same representatives who refused to follow Speaker Boehner in fighting for spending cuts on Tuesday reelected him to a second term as speaker on Thursday. Only 12 House Republicans failed to vote for Boehner.

Originally published on Examiner.com:
http://www.examiner.com/article/gop-revolt-blocked-boehner-spending-amendment?cid=db_articles

Fiscal cliff deal pushes U.S. toward Obama recession

The fiscal cliff deal that House Republicans and President Obama agreed to on New Year’s Day means that a return to recession is almost inevitable. The House voted Tuesday night to approve the deal, officially named the American Taxpayer Relief Act of 2012, which essentially gives President Obama and the Democrats everything that they wanted.

The Wall Street Journal notes that the deal, the biggest tax increase in 20 years, is being cynically spun as a tax cut for the middle class. Nothing could be further from the truth. Even though income tax rates only increase on income above $400,000 ($450,000 for joint filers) there are no tax cuts for anyone and all Americans will pay more in taxes in 2013. Additionally, because joint filers can only earn $250,000 each before the higher rates take effect, the marriage penalty is being returned.

According the Journal’s analysis of the deal, there are a multitude of tax increases that will affect every American, not just the wealthy. The death (estate) tax, which affects many family farms and businesses, will increase from 35 to 40 percent. The capital gains and dividends taxes will rise from 15 percent to 23.8 percent. This includes a 3.8 percent Obamacare investment income surtax. While often associated with the wealthy, the capital gains and dividends taxes affect anyone with a 401(k), an IRA, or any other type of investment. Many countries that compete with the U.S. for international business do not have capital gains taxes at all.

There are also other tax increases associated with Obamacare that will now take effect. The medical device tax is a new 2.3 percent excise tax on medical equipment. There is also an additional Obamacare payroll surtax on incomes above $200,000 ($250,000 for joint filers) of 0.9 percent.

Finally, the payroll tax holiday is expiring. This means that taxes on income up to $113,700 will increase by two points to 6.2 percent. According to an analysis by CBS, this means that a worker earning $50,000 would pay almost $1,000 more in payroll taxes in 2013. According to the Tax Policy Center, the average taxpayer will see an increase of $1,257.

The total cost of the tax increases in the deal is $620 billion over ten years according to Forbes. This represents money that will not be available to small business owners to expand or hire new workers, that families will not be able to spend or save for their own needs, and that will be diverted from wealth-building projects into tax shelters to avoid the new Obama tax increases. As $620 billion exits from the fragile U.S. economy, there will almost certainly be a contraction that will lead to another recession.

New tax increases were unavoidable given President Obama’s reelection and would have been more palatable if they had been accompanied by meaningful spending cuts. Under President Obama, the federal government has run deficits in excess of $1 trillion every year. The so-called emergency stimulus spending has become permanent. Erskine Bowles, Bill Clinton’s chief of staff and head of Obama’s own deficit commission, recently was quoted by the Wall Street Journal saying, “If we're going to raise revenue and if we're going to raise it in any form, then we darn well better cut spending, because spending is the biggest part of this problem.”

So how did the fiscal cliff deal handle the deficit spending issue? Spending and the associated borrowing actually increase under the compromise. According to the Congressional Budget Office, the deal will increase federal spending by $332 billion over 10 years. Deficits are projected to rise by $3.9 trillion. This means that the ballooning federal debt will continue to crowd out private investment and act as a drag on the economy.

The fiscal cliff deal is a clear victory for President Obama and the Democrats and presents the country with the worst of both worlds. Taxpayers and businesses will be faced with massive tax increases in an already weak economy paired with still more increases in federal spending, borrowing and growth of government.

Originally published on Examiner.com:

http://www.examiner.com/article/fiscal-cliff-deal-will-lead-to-the-obama-recession?cid=db_articles

Fiscal cliff poll has good news for both sides

A new poll released on December 10 by Battleground is being touted to show President Obama’s edge in the fiscal cliff negotiations. While it is true that the poll shows that 60 percent of voters favor the president’s plan to raise taxes on Americans who earn more than $250,000, other items in the poll are not as favorable for Obama. Sixty-five percent of respondents also favor increasing taxes on large corporations even though the U.S. corporate tax rate is already the highest in the world.

In the same poll, 69 percent opposed raising taxes on small businesses that earn more than $250,000. The problem is that many small businesses are privately held by individuals who earn more than $250,000.

Seventy-six percent favor cutting government spending across the board, a position that President Obama is at odds with as he tries to negotiate for the ability to unilaterally increase the debt limit to avoid spending cuts. Sixty-nine percent of respondents opposed making significant cuts to the debt limit.

Respondents were evenly split on several issues. There was slight approval (51 percent) for reducing Medicare benefits for wealthy seniors. Fifty percent approve of reducing Social Security benefits for the wealthy. Forty-eight percent want to end foreign aid while 46 percent disapprove.

Obama gets bad marks for his job performance on several issues as well. Fifty-nine percent disapprove of his handling of the deficit and 53 percent disapprove of his handling of the economy. He gets marginal approval (50 percent) for working with Congress, taxes (49 percent) and Medicare (48 percent).

For Republicans, the current battle is largely lost on tax increases even though the wealthy already pay the vast majority of taxes. The challenge is to use their mandate to cut spending and reduce the deficit to force President Obama and the Democrats to compromise on real spending cuts.

 

Originally published on Examiner.com:

http://www.examiner.com/article/fiscal-cliff-poll-has-good-news-for-both-sides?cid=db_articles

Republicans should vote ‘present’ on fiscal cliff

The Republicans face a lose-lose proposition on the fiscal cliff. Even though President Obama ruled out a compromise on tax rates long before the election, a new poll by Battleground released on December 10 indicates that most voters favor raising taxes on Americans who earn more than $250,000 and large corporations. Further, Examiner’s analysis of exit polls showed that a majority of voters favor increasing taxes on the wealthy. These results have been consistent with other polls for some time. As late as yesterday, the president was still indicating his refusal to compromise on tax hikes for the wealthy according to CBS.

Georgia Senator Johnny Isakson is almost certainly right that President Obama does not really care if the country goes over the fiscal cliff. If there is no compromise prior to January 1, then President Obama will get the tax increases that he wants on the wealthy. It is also likely that he will get credit for enacting tax cuts when the Democrats push through a bill to return tax rates to their pre-cliff levels for all but the top income brackets. Republicans will have no choice but to vote for the tax cuts on middle and lower income brackets unless they want to be blamed for increasing taxes.

In essence, it is inevitable that taxes are going up. It is in the Republicans best interests to negotiate a deal as quickly as possible on the best terms possible. Republicans should categorically reject President Obama’s desire to be able to unilaterally increase the federal debt limit. They should also insist on the maximum amount of immediate spending cuts that they can get from the Democrats. Spending cuts should real, not reductions in the rate of increase, and not be future promises.

President Obama and the Democrats will blame Republicans no matter how the fiscal cliff negotiations proceed. If the country goes over the cliff, then they will blame Republicans for being unwilling to compromise on taxes for the wealthy. If the Republicans agree to the tax hikes, then Democrats and conservatives alike will attack them for raising taxes in the next election.

One possible solution is for Republicans to adopt then-Senator Obama’s strategy of voting present. Republicans should get the best deal that they can from the Democrats and then abstain from the vote. The bill will go through because Republicans won’t vote against it, but their fingerprints will not be on any tax increase. If and when the economy slips back into recession because of the president’s insistence on raising taxes, the Democrats will have no one to blame but themselves.

Republicans do hold some cards in the negotiations. Examiner’s analysis of exit polls showed that 74 percent of voters believe that the deficit or the economy was the most important issue facing the country. Sixty three percent of voters opposed raising taxes to cut the deficit. A majority rejected the proposition that the government should do more. Additionally, the middle class voters that the Democrats are holding hostage went convincingly for Mitt Romney.

The Battleground poll also found that voters favor across-the-board cuts to federal spending and oppose raising the Social Security retirement age. They were evenly split on cutting Medicare and Social Security benefits for seniors with higher incomes. Voters still disapprove of President Obama’s handling of the economy and the deficit by large margins. They only agree with him on taxing the wealthy.

President Obama does not have a strong mandate from the 2012 election, but Democrats do hold the presidency and the senate. Elections have consequences. If the Mitt Romney and the Republicans had been elected in greater numbers, America would not have to cope with a tax increase and another likely recession. As things are, the only question is what President Obama and the Democrats will have to give up to get their way.

Originally published on Examiner.com
http://www.examiner.com/article/fiscal-cliff-poll-has-good-news-for-both-sides?cid=db_articles

Obama doesn’t want deal on fiscal cliff

Georgia Senator Johnny Isakson wrote yesterday that he is concerned that President Obama is not sincerely negotiating to avoid the fiscal cliff. The comment, written in Isakson’s weekly newsletter to constituents on Dec. 7, echoed a statement made earlier this week on MSNBC’s Daily Rundown with Chuck Todd.

Isakson wrote, “I am concerned that the president is not acting in good faith and actually wants us to go off the fiscal cliff, let tax cuts expire, cut defense spending and then turn around and cut taxes on just a few later on in order to gain exactly what he has wanted all along while looking as though he has single-handedly rescued the country.”

The senator believes that President Obama and the Democrats are presenting the Republican negotiators with unrealistic proposals in order to force the country toward the fiscal cliff. He believes that the president intends to either force the Republicans to give in to a one-sided deal or simply wait for the automatic tax hikes to take effect. Afterward, the Democrats would attempt to enact new tax cuts for all but the top two percent of taxpayers.

Senator Isakson told MSNBC that he favors an approach that would “raise the base” by “capping itemized deductions at means-tested levels.” Tax reform of this type would increase tax revenue without raising tax rates as wealthy taxpayers would be able to take fewer deductions, leaving them with more taxable income. Isakson says that this was the approach favored by President Obama’s own bipartisan deficit commission.

This sort of tax reform was also used by President Reagan in 1986 in a tax compromise with Democrats. The Tax Reform Act of 1986 lowered the top marginal rate from 50 percent to 28 percent while at the same time eliminating many loopholes and tax shelters. According to historical data from the Tax Policy Center, federal tax receipts increased both in terms of dollars and as a percentage of GDP after the reform.

As support for his position that President Obama does not really want a deal, Isakson cited the fact that Senate Minority Leader Mitch McConnell (R – Ky.) offered Senate Majority Leader Harry Reid (D- Nev.) the chance to vote on President Obama’s proposal. Sen. Reid declined to allow the senate to vote on the measure. The proposal included $1.6 trillion in new taxes and would have given the president the power to raise the federal debt limit without congressional approval. A Republican summary of the president’s proposal provided to Huffington Post also includes an additional $600 billion in taxes effective in 2014, more stimulus spending, an extension to unemployment payments, and a one year deferral of the spending cuts included the fiscal cliff.

Meanwhile, President Obama repeated that he is not willing to compromise on raising tax rates. The president told Yahoo News, “If we're serious about reducing our deficit while still investing in things like education and research that are important to growing our economy - and if we're serious about protecting middle-class families - then we're also going to have to ask the wealthiest Americans to pay higher tax rates. That's one principle I won't compromise on.”

Rep. Tom Price (R- Ga.) had previously pointed out on MSNBC that Congressional Budget Office figures show that Obama’s tax increase would generate only $82 billion per year. According to Price’s figures, this represents just over two percent of the $3.5 trillion 2012 federal budget, enough to fund the federal government for about eight days. The 2012 federal deficit is $1.1 trillion according to the Treasury Department.

The president’s confidence may be the result of two new polls that show that a majority of voters trust the Democrats to make “a good-faith effort to cooperate with Republicans” according to Yahoo News. By almost two-to-one, voters would blame Republicans over Democrats if the country goes over the fiscal cliff.

Originally published on Examiner.com

http://www.examiner.com/article/ga-senator-says-obama-may-not-want-fiscal-cliff-deal?cid=db_articles

Obama not taking bipartisan tack after election

President Obama won a narrow election victory over Mitt Romney earlier this month, but if voters expected the president to take a more conciliatory tone and seek a middle ground with Republicans, they are likely to be disappointed. In spite of the fact that President Obama is the only president to have been reelected with less support than he won in his first election, he has doubled down on the policies that cost him much of his popularity in his first term.

One of the first actions taken by the Obama Administration after the election was to reopen talks with the committee drafting the United Nations arms trade treaty. According to Reuters, the talks on the treaty will resume on March 18. The treaty was scheduled to be signed last July, but opposition from groups concerned that the treaty would infringe on Second Amendment rights led the Obama Administration to table the treaty until after the election.

An unnamed U.S. official told Reuters, “We will not accept any treaty that infringes on the constitutional rights of our citizens to bear arms.” Nevertheless, many Second Amendment activists believe that the treaty could subject the U.S. arms industry and Second Amendment rights to the control of the U.N. Critics also point out that it could make it difficult for legitimate freedom fighters to defend themselves against tyrannical governments.

The president has also taken a hard line with respect to negotiations for a deal to avoid the fiscal cliff. Yahoo News reports that when talks resume this week that the president will ask Republicans for $1.6 trillion dollars in tax increases over ten years. This is double the $800 billion in new taxes that President Obama had sought during the 2011 budget negotiations. The president’s request is also higher than the automatic tax increases scheduled to kick in if the country reaches the fiscal cliff. According to Businessweek, the automatic tax increases are estimated at $536 billion.

The fiscal cliff also includes $100 billion in spending cuts for 2013 according to Businessweek. Many of these cuts would affect the defense budget. The White House did not specify what level of spending cuts President Obama would be willing to accept under a compromise. As the Wall Street Journal recently pointed out, the emergency stimulus spending of 2009 has now become a permanent part of the baseline federal budget.

Annual deficits for the federal government have been in excess of a trillion dollars for each year of President Obama’s administration. Combined spending cuts of $100 billion and tax increases of $500 billion would still not allow the federal government to operate in the black.

Two of President Obama’s potential second-term cabinet picks also seem calculated to provoke Republican opposition. Susan Rice, the apparent frontrunner for Secretary of State, and John Kerry, a potential Secretary of Defense, have already drawn strong opposition.

Susan Rice, currently the ambassador to the United Nations, has been criticized for her role in the administration’s misstatements in the wake of the Sept. 11 attack on the U.S. consulate in Benghazi. A statement by Rice that the attack was the result of an anti-Islamic video was featured prominently in the days after the attack. Subsequent information revealed that the president and administration officials knew as the attack was occurring that it was a terrorist attack, not the result of a spontaneous mob.

President Obama reacted to the criticism with outrage, telling the Wall Street Journal, “If Sen. McCain and Sen. Graham and others want to go after somebody, they should go after me. But for them to go after the U.N. ambassador, who had nothing to do with Benghazi and was simply making a presentation based on intelligence that she had received and to besmirch her reputation, is outrageous.”

John Kerry is also a controversial nominee. Kerry was the Democratic presidential candidate in 2004, losing to George W. Bush. Kerry is perhaps most well known for his 1971 testimony to the Senate Foreign Relations Committee in which he said that American soldiers in Vietnam “had personally raped, cut off ears, cut off heads, tape wires from portable telephones to human genitals and turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in fashion reminiscent of Genghis Khan, shot cattle and dogs for fun, poisoned food stocks, and generally ravaged the country side of South Vietnam….” During the 2004 campaign, a number of veterans came forward to dispute Kerry’s account.

CNS News also notes that Kerry has long supported engagement with Syrian President Bashar Assad. Kerry met with Assad at least six times and shortly before the Syrian uprising began in March 2011 he was still voicing his belief that “Syria will change, as it embraces a legitimate relationship with the United States and the West and economic opportunity that comes with it and the participation that comes with it.”

Democrats control the senate, which is responsible for confirming presidential appointments. Republicans do have enough support to filibuster controversial nominees, however.

President Obama’s second term is still several months away from its official beginning, but the battle lines are already being drawn. It seems that voters who hoped that giving the president a second chance to make good on his promises of bipartisanship will probably be not be satisfied in the near term.

 

Read this article on Examiner:

http://www.examiner.com/article/obama-seeks-confrontations-after-election?cid=db_articles

Reasons to NOT vote for Obama

Early voting has already started in many states for this year’s elections. In the rest, Election Day is now only two weeks away. The number of undecided voters is dwindling as most have already decided on which presidential candidate to vote for. This column is directed toward these undecided voters as well those who lean toward President Obama.

The most obvious reason not to vote for President Obama’s reelection is the economy. Even though the economy has officially been recovering for the recession for more than three years, most Americans still do not feel the recovery. Unemployment remains high. The poverty level is higher than it was when President Obama took office. Despite an increase in the U.S. population, fewer Americans are working today than when President Obama was inaugurated. In August, twice as many Americans went on food stamps as found jobs according to Forbes.

Much of the blame for the lagging recovery belongs to President Obama. In spite of his 2008 campaign promises, President Obama has passed a bundle of tax increases for the middle class as well as the wealthy. The most infamous of these is the individual mandate, which was ruled by the Supreme Court to be a tax, but Forbes lists seven additional taxes that hit the middle class. Obamacare itself contains a bevy of new taxes in addition to the individual mandate. Investor’s Business Daily found 20 more taxes totaling more than $675 billion.

In addition to taxes, President Obama has also dramatically increased the number of expensive regulations with which businesses must comply. The American Action Forum estimates that Obama’s regulations, including Obamacare and the Dodd-Frank financial regulation law, cost the economy more than $488 billion. The paperwork required to comply with these regulations is equal to what it would take to build 220 Empire State Buildings.

These factors combine with the federal debt that has increased by more than 40 percent under President Obama and the looming fiscal cliff, which is comprised of even more tax increases coming at the end of this year, to create uncertainty for businesses. This uncertainty and the cost of the tax increases that Obama has promised if he is reelected make businesses hesitant to expand and hire and consumers reluctant to spend.

An additional factor in the country’s economic difficulty is President Obama’s hostility to oil-based energy. As Examiner noted last spring, approvals for drilling permits under President Obama have fallen from 73 percent to 23 percent. Time for approving a permit has increased from 60 days to more than 90. Obama has canceled oil leases issued by the Bush Administration, issued new regulations to discourage fracking, and rejected the Keystone XL pipeline that would bring Canadian oil to U.S. refineries. The cumulative effect of these policies is to drive up the prices of oil and gasoline. High energy prices contribute to the poor state of the economy.

On foreign policy, Obama has had one big success, the killing of Osama bin Laden. His failures are only now becoming apparent. The fiasco and subsequent cover-up surrounding the al Qaeda attack on the U.S. Consulate in Benghazi is only the tip of the iceberg. More serious and far-reaching are Obama’s policies regarding Israel and Iran.

President Obama claims to be a friend of Israel, but his actions tell a different story. President Obama seems to see a moral equivalence between Israeli soldiers and Palestinian terrorists. He is the only president to ever propose that Israel go back to its pre-1967 borders. This would leave Israel with an indefensible and narrow frontier. More recently Obama declined to meet with Benjamin Netanyahu, Israel’s prime minister, and his administration has reportedly pressured Israel not to attack Iranian nuclear facilities.

With respect to Iran, President Obama is fond of pointing to the tough sanctions in place on the rogue regime. What he fails to mention is that congress passed those sanctions over his objection. President Obama also issued 20 waivers to the sanctions. Countries receiving waivers include China, Iran’s largest trading partner. Yahoo News notes that Obama will have to decide whether to renew the sanctions after the election.

Iran is not intimidated by President Obama and or the sanctions. It has scarcely been a year since Iranian agents attempted to assassinate the Saudi ambassador with a terrorist attack in Washington, D.C. In the Jerusalem Post, Iranian President Mahmoud Ahmadinejad is gleeful that America’s debt is weakening the country. “How long can a government with a $16 trillion foreign debt remain a world power?” he asks.

President Obama’s term has also seen the erosion of personal freedom. The freedom not to buy a government mandated product is only the most obvious loss. Freedom of religion has also been disregarded by the administration, most notably in the Health and Human Services mandate that requires all insurance policies to cover contraceptive and abortifacient drugs.

Most disturbing, during and after the September 11 attacks on U.S. diplomatic facilities in the Middle East, the Obama Administration was openly critical of the freedom of speech. Even before the Benghazi consulate was attacked, the U.S. Embassy in Cairo, Egypt released a statement condemning the anti-Islamic film that allegedly sparked the attacks. The text of the statement, available on Politifact, says, “We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others.” Fox News reports that when he spoke to the United Nations later in the month, President Obama said that the “future must not belong to those who slander the prophet of Islam.” The man responsible for the film was arrested in California on charges that he violated his probation.

If Obama’s record so far is disturbing, even scarier is what might lie ahead. Reuters reported last March that President Obama told Russian President Dmitry Medvedev that “This is my last election ... After my election I have more flexibility.” The exchange evidently related to missile defense, but the same logic applies to every controversial issue from abortion to gun control to taxes.

Given that Obama has shown that he is willing to circumvent congress with executive orders, there is no practical limit to what he can do as long as congress does not override his veto. The president has used executive orders or rulemaking by executive branch agencies to change U.S. immigration law, implement net neutrality, and implement a cap-and-trade carbon regulation system. Further, the president unilaterally launched a war in Libya without informing congress and made several recess appointments while congress was still in session.

Some leftists have opined that a benevolent dictator might be what the United States needs to break the gridlock in Washington and get things done. Such an executive, who does not blanch at using his autocratic powers, might very well be what we get in a second Obama term. The problem with this idea is that the American economy is simply too complex to be micromanaged. And a benevolent dictator is still a dictator.

Next:  Reasons to vote FOR Mitt Romney

This article was first published on Examiner.com

http://www.examiner.com/article/reasons-to-not-vote-for-obama

Obama rejects compromise to avoid fiscal cliff

Obama Administration officials recently confirmed that President Obama is prepared to veto any legislation addressing the looming “fiscal cliff” that does not accede to Mr. Obama’s demands for tax increases on upper-income Americans. The “fiscal cliff” is a bundle of tax hikes scheduled to take effect on January 1, 2013 unless Congress and the president take action.

On October 17, the Washington Post reported that the president’s plan is to wait until after the election, which he presumes he will win, and use his victory to force the Republicans to agree to tax hikes. Since they took control of the House of Representatives in 2011, the Republicans have allied with the Tea Party to resist calls by President Obama and the Democrats to raise taxes to pay for increased federal spending and deficits.

The congressional stalemate led to the creation of a deficit commission that called for spending cuts paired with tax and entitlement reform. Congress never enacted its own program of cuts so a package of automatic across-the-board spending cuts and tax increases is now very close to taking effect. In addition to dramatic increases on a number of taxes, deep cuts to defense spending and social programs will also take place.

In 2009, President Obama said, “You don’t raise taxes in a recession.” In a Youtube video of the question and answer session, the president continues, “We have not proposed a tax hike for the wealthy that would take place in the middle of a recession…. That would just suck up, take more demand out of the economy and put businesses in a further hole.”

While the recession is technically over, many Americans still feel that the recovery has not yet begun in earnest. Economic growth is barely above one percent and estimates are frequently revised downward after they are issued. Unemployment has ticked down officially, but is still almost eight percent. The poverty rate is up, income is down, and fewer Americans are working now than when Mr. Obama took office. Few would argue that the economy is at a point where it can sustain taking “more demand out of the economy.”

Tax increases in the current economic environment, especially tax increases of the size and scope now being threatened by President Obama, would almost certainly plunge the economy back into a deep recession. The prospect of these tax increases is a large factor in why the economy is not recovering as well as it should. Businesses are waiting to see what will happen over the next year.

The tax increases are not a panacea for the federal government’s debt and spending problem. A report by the Tax Policy Center, a group affiliated with the liberal Brookings Institution, says that President Obama’s proposal “not nearly enough to close the cumulative budget deficit.” This is because the biggest cost from extending the current, Bush-era tax rates comes from protecting the middle class from tax increases. Preserving the upper-income tax rates would only cost an additional $8 billion according to the Washington Post. These figures also do not reflect the negative economic effects of increasing taxes which often lead to lower than expected tax receipts.

Writing in the Washington Times, Rep. Darrell Issa (R-Ca.) pointed out that even confiscating all of the income from the wealthy would not solve the federal spending crisis. “Even if the president took 100 percent of every millionaire’s income,” he says, “that still would leave a deficit of more than a half trillion dollars, and our national debt would remain at more than $15 trillion.”

President Obama’s insistence on tax increases may be his undoing. The economy is unlikely to improve under the threat of tax hikes and Mr. Obama is unlikely to be reelected unless the economy improves. Rasmussen reports that voters favor Mitt Romney over Obama on the economy by 13 points. After the first debate which dealt largely with economic issues, Mitt Romney surged in the polls nationally.

Even if President Obama loses the election, he can still force tax increases on the American people. Since a new president and congress will not be inaugurated until January, the tax hikes and spending cuts will already be law unless Mr. Obama allows them to be stopped in a lame duck session. Chastened by a defeat at the hands of Mitt Romney, it seems that President Obama would be unlikely to make that concession.

This article was originally published on Examiner.com

http://www.examiner.com/article/president-obama-rejects-tax-compromise-to-avert-fiscal-cliff