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Obama: From King of the World to Paralysis in 6 Months

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Photo Credit: VisitOSLOFate is fickle, power cyclical, and nothing is new under the sun. Especially in Washington, where after every election the losing party is sagely instructed to confess sin, rend garments and rethink its principles lest it go the way of the Whigs. And where the victor is hailed as the new Caesar, facing an open road to domination.

And where Barack Obama, already naturally inclined to believe his own loftiness, graciously accepted the kingly crown and proceeded to ride his reelection success to a crushing victory over the GOP at the fiscal cliff, leaving a humiliated John Boehner & Co. with nothing but naked tax hikes.

Thus emboldened, Obama turned his inaugural and State of the Union addresses into a left-wing dream factory, from his declaration of war on global warming (on a planet where temperatures are the same as 16 years ago and in a country whose CO2 emissions are at a 20-year low) to the invention of new entitlements — e.g., universal preschool for 5-year-olds— for a country already drowning in debt.

To realize his dreams, Obama sought to fracture and neutralize the congressional GOP as a prelude to reclaiming the House in 2014. This would enable him to fully enact his agenda in the final two years of his presidency, usually a time of lame-duck paralysis. Hail the Obama juggernaut.

Well, that story — excuse me, narrative — lasted exactly six months. The Big Mo is gone. It began with the sequester. Obama never believed the Republicans would call his bluff and let it go into effect. They did.

Read more from this story HERE.

All of a Sudden, the President Says We Don’t Have a Debt Crisis

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Photo Credit: Llima

Presto, change-o! At the beginning of the year, we were sternly lectured that huge tax increases were absolutely necessary to confront our looming debt crisis. America was driven to the edge of the “fiscal cliff,” ostensibly producing business panic that explained a fair measure of Barack Obama’s permanent economic malaise, by the President’s refusal to budge an inch from his demands for those deficit-fighting tax increases.

During the previous years, the President insisted that this “payroll tax cut,” funded by a raid on Social Security, was the vital ingredient to American economic survival. He asked citizens to send him their horror stories about how losing $60 in higher taxes from each paycheck would ruin their lives. But at the end of 2012, Obama let this supposedly crucial tax cut die without saying one single word in its defense. I mean that literally – he made absolutely no effort to protect it during “fiscal cliff” negotiations. The urgency of deficit reduction through tax increases was simply too great!

Throughout the 2012 campaign, every proposal for growth-inspiring tax cuts, and every serious effort at reforming America’s embarrassing tax system – from Mitt Romney’s relatively modest proposals, through the flat tax ideas advanced by Rick Perry and Newt Gingrich, to Herman Cain’s “999 Plan” – was savagely denounced by the President and his team because they would supposedly risk increasing the deficit. A fraudulent study supposedly “proving” that Romney’s plan didn’t “add up” was endlessly cited by the Obama campaign, even after its authors admitted it was bunkum. The same argument is invariably advanced by liberals whenever ideas like the Flat Tax, Fair Tax, or even small tax rate reductions are suggested. The possibility (indeed, to any serious student of economics, absolute certainty) of increased government revenue from the combination of lower rates and higher economic output – a smaller slice of a larger pie – is dismissed out of hand. We simply cannot risk adding a single dollar to the deficit by reducing the tax burden on American consumers and businesses!

But all of a sudden, Barack Obama sat for an interview with George Stephanopoulos of ABC News and breezily asserted that “we don’t have an immediate crisis in terms of debt.”

Well– I understand. Which is why, at some point, I think I take myself out of this. Right now, what I’m trying to do is create an atmosphere where Democrats and Republicans can go ahead, get together, and try to get something done. And, y– you know– I think what’s important to recognize is that– we’ve already cut– $2.5– $2.7 trillion out of the deficit. If the sequester stays in, you’ve got over $3.5 trillion of deficit reduction already.

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Se·ques·ter: To Isolate, Or Hide Away

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Photo Credit: Irish Central Sequester. Since we are getting bombarded with the word, I decided to look it up to see what it means in the dictionary.

In its noun form, it is a general cut to government spending

In the verb, it means to isolate or hide away. In this case I think it’s use is the verb and the truth is hidden away.

In order to get the Republicans to agree to avert the fiscal cliff/debt ceiling crisis two years ago, the President said he would be glad to cut expenditures…in two years. So the President came up with a deal and it was called sequestration. Well the two years is up and the cuts will occur in two days.

Like all of the other fiscal cliffs and debt ceiling crises we have been exposed to for the past 4 years, nothing gets done until the last minute. There is no leadership, no one at the helm to bring all of the parties together and hammer out a deal.

Obama’s sequestration included cuts to the military that he figured would be revolting to Republicans and they would eventually agree to compromise with him. But the Republicans seem willing to go along with these cuts, the wars are winding down and there is less pressure on the military.

This reaction from the Republicans was unexpected to Obama. In his sequestration he had also included cuts to many social programs his base relies on…cuts he never thought he would have to make.

President Obama has taken to the road to try to drum up outrage against Republicans to pressure them to cave in on the sequestration cuts.

President Obama treats the sequester like it is a red headed step child, as if he was the innocent bystander and had nothing to do with it…But award winning journalist Bob Woodward, blew the whistle and firmly placed paternity rights to sequestration in Obamas corner.

But in this case “sequester” hides the truth. The truth is that these so called “cuts” are only a pinprick to the growth of government spending.

Both sides are equally guilty of protecting their pet projects and sacred cows which automatically grow fatter each year under baseline budgeting.

Senator Tom Coburn who knows better than most what the game is about, said the other day: “There’s easy ways to cut this money in ways the American people will never feel. What you hear is an outrage because nobody wants to cut spending.”

Senator Coburn has documented billions in waste and fraud that could be cut from the budget…read his excellent, 2012 Wastebook. But none of this is being addressed in the “sequester.”

The CATO Institute did an exhaustive study on how we are spending 100 billion on corporate welfare. But none of this is being touched with the “sequester” either. Here is their excellent report: Corporate Welfare in the Federal Budget.

The people and their children who will have to shoulder the burden of this out out of control spending, are tired of having the truth about the debt and deficit “sequestered” away by their leaders.

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US Debt Headed Toward 200 Percent of GDP Even After ‘Fiscal Cliff’ Deal

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The nation’s long-term fiscal outlook hasn’t significantly improved following the recent agreement between Congress and the White House over tax and spending issues, according to a new analysis.

The “fiscal cliff” deal, combined with the debt-limit agreement of August 2011, only slightly delays the United States reaching debt-to-gross domestic product levels that would damage the economy and risk another fiscal crisis, according to a report from the Peter G. Peterson Foundation released on Tuesday.

The agreement “may have prevented the immediate threats that the fiscal cliff posed to our fragile economic recovery, but we haven’t remotely fixed the nation’s debt problem,” said Michael A. Peterson, president and COO of the Peterson Foundation.

“The primary goal of any sustainable fiscal policy is to stabilize the debt as a share of the economy and put it on a downward path, and yet our nation is still heading toward debt levels of 200 percent of GDP and beyond,” he said.

The report concludes that the recent round of deficit-reduction measures won’t make major improvements because they fail to address most of the major contributors to the debt and deficit, including rapidly rising healthcare costs.

Read more from this story HERE.

FreedomWorks Intends to Use New Year’s Day Tax ‘Massacre’ in 2014 Primaries

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The fiscal cliff deal cut in the wee hours of New Year’s Day was a late Christmas present, according to FreedomWorks’ Matt Kibbe, whose tea party group plans to capitalize on what he called a tax “massacre” heading into the 2014 midterm elections.

“Our sense is that the New Year’s Day massacre is … unfortunately, is going to be a gift that keeps giving,” Kibbe told The Daily Caller in a phone interview.

Asked who was massacred, Kibbe said “the taxpayers … [and] fiscal responsibility are getting massacred.”

“I think, whether we like it or not, this constant budget crisis — which I think is by design — is going to continue to define the congressional debate all the way up until the 2014 election,” he continued.

“And we view each of these failures … as opportunities to educate the American public on the gross irresponsibility of the representation in Washington,” Kibbe said, describing it as “a teaching moment for America on exactly how not to do things.”

Read more from this story HERE.

Conservative Group Targeting McConnell in Kentucky Over Fiscal-Cliff Deal

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photo credit: gage skidmore

A conservative group has begun running online ads in Kentucky targeting Senate Republican Leader Mitch McConnell (Ky.), who is up for reelection in 2014, because of the “fiscal-cliff” deal he brokered.

Brent Bozell, the chairman of ForAmerica, which reports an online membership of 3 million, has launched one of the first ads of the 2014 cycle on conservative websites in Kentucky. The group says it is a five-figure buy.

The ad, titled “Whose Side Are You On,” asks conservatives to sign a petition letting Republican lawmakers know they will be held accountable if they vote for legislation to further increase taxes.

“As negotiations over the so-called ‘fiscal cliff’ were intensifying, conservatives called on McConnell and congressional Republicans to hold the line on tax rates and demand cuts to spending, as they had promised,” the petition states. “But when the deadline was looming, McConnell called Vice President Joe Biden and signed off on a deal with the White House that included tax increases and virtually no spending cuts.”

Bozell said in an interview that he “wouldn’t be surprised” if McConnell faced a conservative challenger in the 2014 Kentucky Republican primary.

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Boehner Coup Attempt Larger Than First Thought

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A concerted effort to unseat Speaker John A. Boehner was under way the day of his re-election to the position, but participants called it off 30 minutes before the House floor vote, CQ Roll Call has learned.

A group of disaffected conservatives had agreed to vote against the Ohio lawmaker if they could get at least 25 members to join the effort. But one member, whose identity could not be verified, rescinded his or her participation the morning of the vote, leaving the group one person short of its self-imposed 25-member threshold. Only 17 votes against Boehner were required to force a second ballot, but the group wanted to have insurance.

Even with 24 members, the group would easily have been able to force a second ballot round, but the effort was aborted in frenetic discussions on the House floor.

“There was an effort to get to a particular number,” said one Republican member who voted for Boehner but was familiar with the effort to oust him.

Republican Reps. Justin Amash of Michigan, Mick Mulvaney of South Carolina and Raúl R. Labrador of Idaho played key roles in organizing the plot. But participants describe its origin as organic and not led by any particular member, despite the suggestion by at least one House Republican that Amash was the ringleader.

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New York Times: Tax Code May Be the Most Progressive Since 1979

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WASHINGTON — With 2013 bringing tax increases on the incomes of a small sliver of the richest Americans, the country’s top earners now face a heavier tax burden than at any time since Jimmy Carter was president.

The last-minute deal struck by the departing 112th Congress raised taxes on a handful of the highest-earning Americans, with about 99.3 percent of households experiencing no change in their income taxes. But the Tax Policy Center estimates that the average family in the top 1 percent will pay a federal tax rate of more than 36 percent this year, up from 28 percent in 2008. That is the highest rate since 1979, at least.

By some measures, the tax code might now be the most progressive in a generation, tax economists said, while noting that every American is paying a lower burden currently than they did then. In fact, the total federal tax rate is still vastly lower for the very rich than it was at any point in the 1940s through 1970s. It has risen from historical lows, but is still closer to those lows than where it was in the postwar decades.

“We made the system more progressive by raising rates at the top and leaving them for everyone else,” said Roberton Williams of the Tax Policy Center, a research group based in Washington. “The offsetting issue is that the rich have gotten a lot richer.”

Indeed, over the last three decades the bulk of pretax income gains have gone to the wealthy — and the higher up on the income scale, the bigger the gains, with billionaires outpacing millionaires who outpaced the merely rich. Economists doubted that the tax increases would do much to reverse that trend.

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The Fiscal-Cliff Mirage

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The politics of the “fiscal cliff” deal is debatable: On the one hand, Boehner got the “Bush tax cuts” made permanent for most Americans; Obama was forced to abandon his goal of increasing rates for those earning $250,000. On the other, on taxes Republicans caved to the same class-warfare premises (the rich need to pay their “fair share”) they’d successfully fought off a mere two years ago; while on spending the Democrats not only refused to make cuts, they refused to make cuts even part of the discussion.

Which of the above is correct? Who cares? As I said, the politics is debatable. But the reality isn’t. I hate to keep plugging my book After America in this space, but if you buy multiple copies they’ll come in very useful for insulating your cabin after the power grid collapses. At any rate, right up there at the front — page six — I write as follows:

“The prevailing political realities of the United States do not allow for any meaningful course correction. And, without meaningful course correction, America is doomed.”

Washington keeps proving the point. The political class has just spent two months on a down-to-the-wire nail-biting white-knuckle thrill-ride negotiation the result of which is more business as usual. At the end, as always, Dr. Obama and Dr. Boehner emerge in white coats, surgical masks around their necks, bloody scalpels in hand, and announce that it was touch and go for a while but the operation was a complete success — and all they’ve done is applied another temporary band-aid that’s peeling off even as they speak. They’re already prepping the OR for the next life-or-death surgery on the debt ceiling, tentatively scheduled for next Tuesday or a week on Thursday or the third Sunday after Epiphany.

No epiphanies in Washington: The Congressional Budget Office estimates that the latest triumphant deal includes $2 billion of cuts for fiscal year 2013. Wow! That’s what the government of the United States borrows every ten hours and 38 minutes. Spending two months negotiating ten hours of savings is like driving to a supermarket three states away to save a nickel on your grocery bill.

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Video: How Corporate Tax Credits Got Into the ‘Cliff’ Deal

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The “fiscal cliff” legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren’t the fruit of eleventh-hour lobbying conducted on the cliff’s edge — they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.

The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios — and their lobbyists. So, if you’re wondering how algae subsidies became part of a must-pass package to avert the dreaded fiscal cliff, credit the Biotechnology Industry Organization’s lobbying last summer.

Some tax lobbyists mostly ignored the August bill “because they thought it would be just a political document,” one K Streeter told me. “They were the ones that got bit in the butt.”

Here’s what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.

Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.

Read more from this story HERE.