Friday, February 27, 2009

Republicans criticise Obama's massive $3.5tn budget.

The Guardian are calling it, "the biggest redistribution of wealth from the rich to the poor in US history" and are citing Republicans fears that Barack Obama could turn out to be, "one of the most liberal presidents ever".

I would be very pleased if both turned out to be true. It's time the pendulum swung the other way. For the past thirty years the gap between the rich and poor in the US has been sharply increasing, with the rich getting richer and the poor having to do more than one job in order to eke out a living.

While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.

The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.

Anything Barack Obama can do to redress this situation will win support from me.

The figures in the budget are on a scale that would have been almost unimaginable a year ago. One of the biggest expenditures is $634bn to be directed towards fulfilling Obama's campaign pledge to make a start on providing universal healthcare.

Obama, speaking at the White House before the budget was released, said, that in spite of recession, it was time to address the fundamental problems facing America. "There are times when you can afford to redecorate your house and there are times when you have to focus on rebuilding its foundation."

This meant, he said, "some hard choices" lay ahead. To try to pay for his ambitious spending plans, he intends to rip into Pentagon spending, with expensive projects such as the F-22 fighter jet at risk.

Also to be targeted are farm subsidies that have existed for decades and tax-breaks for corporations.

But the most contentious issue is his planned increase in taxes for anyone earning more than $250,000 a year from 2011.

The president faces a marathon battle with Republicans, who are committed to limited government and lower taxes. Mitch McConnell, leader of the Republicans in the Senate, said: "I have serious concerns with this budget, which demands hardworking American families and job creators turn over more of their hard-earned money to the government to pay for unprecedented spending increases."

Mitch McConnell is talking through his arse. There are no "hard working American families" being asked to turn over more of their income to the government, Obama is simply ending Bush's tax cuts to individuals earning more that $250,000 a year.

The Republicans will, no doubt, oppose Obama's plans every step of the way. That is to be expected. But, at the moment, all the momentum is on Obama's side. He is right to be as ambitious as he is showing himself. The political wind which is currently behind his back won't last forever and he should strike while he can. And I am secretly pleased that he is showing himself to be much more of a liberal than many people expected.

I am especially pleased that he is being brave enough to talk about things like the F-22 fighter. For too long Democrats have been arguing within parameters set by the Republican party, which meant that defence spending had to be maintained in order to prove one's patriotism. The US already spends more on defence than the next 45 country's combined and accounts for 48% of all the world's military spending, which I regard as simply ludicrous in a country which doesn't even guarantee health care to all of it's citizens.

Obama is, at last, refusing to accept what the Republicans see as universal truths and is making a different argument. He is actually stating that cuts can and should be made in defence in order to ensure healthcare for all Americans.

Oh, it will drive the Republicans nuts, but they are nutcases anyway. And, at the moment, they appear to be on the wrong side of every argument.

Click title for full article.


The Intellectual Redneck said...

Taxing the rich at 100% won't pay for Obama's budget. The Wall Street Journal has reported that taxing the rich at 100% won't pay for Obama's budget. Barack Obama promised not to raise taxes on anyone making under $250,000 per year. Where is he going to get the money? The numbers indicate Obama will need to take 100% of the income of everyone making over $75,000.

Kel said...

He's already answered that:

"I know that banks and big student lenders won’t like the idea that we’re ending their huge taxpayer subsidies, but that’s how we’ll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won’t like us ending nearly $30 billion in tax breaks, but that’s how we’ll help fund a renewable energy economy that will create new jobs and new industries."

You might not like what he's doing, but it's dishonest to pretend that he is only raising money by taxing the wealthiest citizens.