President Obama has invented a new name one of Washington’s most enduring deceptions, the promise of spending cuts in return for tax increases. He calls it his “balanced approach.” As always the tax increases are real and immediate while the spending cuts turn out to be illusory.
The President wants to rescind the Sequester spending cuts he signed into law in 2011 but can’t without cooperation from House Republicans. His way of inviting their support is to demand that they postpone the cuts while enacting more tax increases. At his recent Sequester media event he said:
Economists and business leaders from across the spectrum have said that our economy is poised for progress in 2013 and we’ve seen signs of this over the last several weeks […] we’ve created more than 6-million jobs in the last 35-months.
Whenever Obama’s ideas conflict with common sense he claims to have the blessing of unnamed experts, in this case “economists and business leaders.” This is a textbook logical fallacy called “appeal to authority” used by those whose case is too weak to stand the reality test.
Back in 2010 the President agreed with Republicans to postpone tax increases citing the weak economy. Obama may see “signs” but the economy, as measured by quarterly GDP growth is clearly weaker now than it was in 2010. In fact, it turned negative in the final quarter of 2012. Yet he is determined to increase taxes again.
Upon examination of the data it turns out that Obama’s six million jobs in 35 months is the weakest post-recession labor market since the government began it’s monthly survey of employers in 1939.
The Sequester is a series of spending reductions scheduled for the next ten years that are considered draconian and unacceptable in Washington. It’s openly stated purpose was to scare the President and Congress into negotiating different cuts that were not so draconian. Obama told the assembled reporters:
The proposals that I’ve put forward during the fiscal cliff negotiations, in discussions with Speaker Boehner and others, are still very much on the table. I repeat; the deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table.
“Tax reform” is the President’s new euphemism for tax increases, which are beginning to lose their appeal to the public. Congress and the President avoided the fiscal cliff with last minute legislation that postponed the sequester until March 1 and increased tax rates on high income taxpayers. Democrats praised Obama as the fiscal cliff “winner” for cleverly forcing the Republicans to submit to his tax increase demand while stiffing them by reneging on his promise of “balance” via spending cuts.
Obama now declares more tax increases and “cuts” are still “on the table.” But nobody knows what his cuts are. They exist only as smooth chatter for the TV cameras, not as written legislation with numbers that the House and Senate could debate and vote on.
So we’ve been reminded that while it’s critical for us to cut wasteful spending, we can’t just cut our way to prosperity.
The converse of “we can’t cut our way to prosperity” would have to be we can spend our way to prosperity. But if government spending were the source of prosperity Obama’s record shattering spending increase should have produced record shattering, or at least above average growth. Instead we’ve seen the weakest post-recession economy ever recorded since the government began quarterly assessments of economic growth in 1948.
Under the law the President is required to submit his annual budget proposals to Congress by February 1. This year he instead submitted notice that his budget would be delayed. So the only Presidential spending proposals in writing are found in last year’s budget documents, displayed in the chart below. Whatever is “on the table” is invisible.