One Big Mess

01/02/10

Today President Barack Obama announced a nearly $4 trillion-US budget (effectively tripling the size of the deficit). Proposals in the budget include:

· AA spending freeze on some programs

· BBillions of dollars for job-creation measures and tax breaks, partly offset by tax hikes on high-income earners

· I Identified $20 billion in cuts

· Middle-class tax breaks would be extended, tax cuts oil companies, investment fund managers and individuals earning over $250, 000 a year will be continued, Obama

I do not know whether to feel sorry for Obama or just shake my head at ineffective leadership. You can either blame Bush (who doesn’t blame him for everything wrong in America today? Excluding the far far-right) and feel sorry for Obama. Or be critical for Obama’s inability to bring the two divided sides of Congress together in a time of crisis, thus shaking your head at ineffective leadership. I lean towards the latter. It’s typical in politics to blame the guy before you for the problems the country faces, even those problems, like a growing deficit, are the result of actions you supported. Now, I understand that Congress is bitterly divided and there will always be partisans who will turn oppose every action Obama takes (I’ll discuss this shortly), it doesn’t undermine the fact that as a leader, Obama appears to be rather weak. The last time there was a crisis in the country, Congress was united. Yes, I know, that unity did lead to a blind and dangerous patriotism that led to two wars. However, why can’t Obama, a preacher of hope, unite Congress to face a crisis that arguably affects more Americans directly than 9/11 did? I will say however, that this budget is an obvious step towards bipartisanship, even if it doesn’t succeed in uniting the country.

1) A spending freeze on some programs

a. It’s a good idea to put the freeze on programs while we figure out what programs are working and what aren’t

b. The right opposes it because they want outright spending cuts and say this doesn’t go far enough

c. The left opposes it because they feel that stopping the stimulus will only make things worse for the economy (keep in mind this is a freeze not an outright cut)

2) Billions of dollars for job creation measures and tax breaks, partly off-set by taxes on high-income earners

a. This is a proposal I’d want to see more detail on, as I am sceptical as to how jobs can actually be legislated into existence

b. Ideally this would be a measure that gives tax breaks and financial benefits to small and medium size businesses, the true backbone of the economy

3) I Identified $20 billion in tax cuts

a. Compared to the size of the budget this seems so insignificant

b. It also exposes another issue that is dividing Congress. On the one hand, America will eventually have to stop the stimulus spending and get its deficit under control, tax cuts are good for putting money back in the pockets of the people but, they aren’t good for bringing in revenue to clear up the deficit. Here we have the right who can’t face the reality that tax increases will be necessary to fix the deficit and a left that doesn’t want to accept that eventually this massive spending will have to be cut. This situation really flies in the face of the traditional, low taxes and cut spending vs. increase taxes and spend that is the usually divide of the political parties. Now the situation is, increases taxes and cut spending. Both sides are coming out unhappy on this one

4) Middle-class tax breaks would be extended, tax cuts for oil companies, investment fund managers and individuals earning over $250, 000 a year will not be continued

a. Simple, the left likes this, the right wants to see those tax cuts stay on

b. The problem: everyone’s taxes will be going up in the future

So there you have it, a budget that is clearly trying to please both sides of Congress. Sadly, without a strong leader and the will of both sides to come together, it’s just a big mess.

Source: http://www.cbc.ca/world/story/2010/02/01/obama-budget.html#ixzz0eJmhTEHI