BUDGET ACCOUNTING GIMMICKS
Obama promised to end budgetary accounting gimmicks used by his whipping boy predecessor, George W. Bush, yet ObamaCare was defined by egregious budgetary gimmicks. As Pete Wehner, a senior fellow at the Ethics and Public Policy Center, noted, in Obama’s speech to a joint session of Congress he claimed to have identified $2 trillion in “savings,” but $1.6 trillion of those were based on the Iraq surge continuing for ten more years, even though Obama had promised to promptly discontinue the surge.28 Even New York Times Obamacon David Brooks acknowledged ObamaCare was “stuffed. . . . with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending.”29
THE FREE MARKET
In an interview with Bloomberg Business Week, Obama called himself a “fierce advocate” of the free market. “You would be hard pressed,” he said, “to identify a piece of legislation that we have proposed out there that, net, is not good for businesses.”30 In a speech in New York City on April 22, 2010, while stumping for his financial reform bill, Obama averred, “As I said two years ago on this stage, I believe in the power of the free market.”
It’s noteworthy that no other president has felt the need to repeatedly make that point. Does he protest too much? Well, in New York, he couldn’t even wait a full paragraph to qualify his statement. He added, “But a free market was never meant to be a free license to take whatever you can get, however you can get it.”31 Whoever said it was? And what system of laws ever permitted such a thing by the private sector? One wonders why we don’t hear Obama apply the same qualifier to the power of the federal government; could he bring himself to say, “But the federal government was never supposed to have a license to take whatever it can get, however it can get it”?
In fact, as Obama continually protested that he loved capitalism, he was doing everything in his power to permanently dismantle much of it in the United States, from his auto takeover, to ObamaCare, to cap and trade, to the financial overhaul bill.
Along the same lines, Obama said he wanted to “disabuse people of this notion that somehow we enjoy meddling in the private sector.” In that case, perhaps he regrets having taken over GM and Chrysler, firing its CEOs and its board of directors, intervening by force in the mortgage business, interfering with existing private contracts, subsuming one-sixth of the economy with ObamaCare, trying to saddle businesses with stifling cap and trade laws, preventing TARP companies from paying their loans back, setting executive compensation, demonizing the insurance industry and Big Pharma, and paving the way for the abolition of private health insurers.
FISCAL HAWK
With a straight face, Obama characterizes himself as a fiscal hawk, vowing to usher in a “new era of responsibility,” to rise above petty politics, and to cut the deficit in half by the end of his term—all while submitting bankrupting ten-year budgets. He says he wants to steer America “from an era of borrow and spend” to one of “save and invest.” The CBO, meanwhile, reported that the national debt would double in six years under Obama and triple in ten years.
READ MY LIPS—SORT OF
During the campaign, Obama said, “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”32 But just weeks into his presidency, Obama violated his pledge by signing a law to triple the federal excise tax on cigarettes, from 39 cents to $1.01 per pack--a tax that would fall hardest on individuals and families making far less than $250,000 per year.33 When questioned about this, White House press secretary Robert Gibbs flippantly responded, “People make a decision to smoke.”
Later, when asked whether Obama’s tax pledge applied to his healthcare plan, Gibbs replied, “The statement didn’t come with caveats.” But smoking was precisely such a caveat, and healthcare quickly became another one. Obama brazenly denied an excise tax on the uninsured—which was part of a healthcare reform proposal drafted by his Democratic ally, Montana senator Max Baucus—would violate his pledge. In fact, he was visibly irritated when ABC’s George Stephanopoulos invoked a dictionary definition of “tax” to contradict him, shooting back, “I absolutely reject that notion.” At many other times, Obama’s various spokespersons refused to answer the question, employing evasions like, “We’re going to do what’s necessary,” “It is never a good idea to absolutely rule things out, no matter what,” and “We’re going to let the process work its way through.”34
Obama himself has tried to weasel out of his “firm pledge,” saying on February 9, 2010, in an interview in the Oval Office, that he was “agnostic” on whether his budget commission should consider raising taxes as a deficit-fighting measure. “The whole point of it is to make sure that all ideas are on the table. So what I want to do is to be completely agnostic, in terms of solutions.”35 Continuing to meander all over the board, he said on April 10, 2010, that his pledge, which he made in the campaign and vacillated into agnosticism in February, now only applied to income taxes. “And one thing we have not done is raise income taxes on families making less than $250,000. That’s another promise we’ve kept.”36 In fact, he did not keep that promise because that was not the promise he made. His new focus solely on income taxes was an implicit acknowledgement that his tax hike on cigarettes had already broken his actual promise not to raise “any of your taxes.”
And we’re in store for even more tax increases via ObamaCare. Americans for Tax Reform broke down the policy “by the numbers” revealing a startling expansion in the federal government. Among their findings, the healthcare bill will include nineteen new tax increases, seven of which “unquestionably violate” Obama’s “firm pledge” not to raise “any form” of taxes on families making less than $250,000. Furthermore, the bill will have $497 billion worth of tax increases over the first decade it is effective; increase the top federal tax rate on wages and self-employment earnings to 43.4 percent, increase the annual tax for every man, woman, and child in America by $165; increase the top federal tax rate on early distributions from Health Savings Accounts to 59.6 percent (how’s that for promoting thrift?); and limit the “currently unlimited” amount parents of special-needs children can save tax-free for tuition in Flexible Spending Accounts to $2,500.37
Republicans on the House Ways and Means Committee cite fourteen tax hikes on middle class families in ObamaCare totaling more than $316 billion, including a new tax on individuals who do not purchase government-approved health insurance; a new tax on employers who fail to fully comply with government health insurance mandates; a new 40 percent excise tax on certain high-cost health plans; a new ban on the purchase of over-the-counter drugs using funds from FSAs, HSAs, and HRAs; an increase, from 7.5 percent to 10 percent of income, on the threshold after which individuals can deduct out of pocket medical expenses; a new $2,500 annual cap on FSA contributions; a new annual tax on health insurance; a new annual tax on brand name pharmaceuticals; a new 2.3 percent excise tax on certain medical devices; a doubling of the penalty for non-qualified HSA distributions; a further increase in the tobacco tax with expanded enforcement authority; and an extension of federal unemployment surtaxes through June 2011.38
CAP AND TAX
Obama also attempted to violate his tax pledge with the Waxman-Markey cap-and-trade bill. In testimony before the Senate Republican Conference, Heritage Foundation expert Ben Lieberman described the bill as “nothing more than an energy tax in disguise,” and “the most convoluted attempt at economic central planning this nation has ever attempted.” The way the bill works, Lieberman explained, is by “raising the cost of energy high enough so that individuals and businesses are forced to use less of it.” It’s about “inflicting economic pain” to ensure the “emissions targets will be met.”
Cap and trade is a tax in all but name—and a massive one at that. Heritage estimates for a household of four, energy costs will inc
rease by $436 the first year it’s in effect, reach $1,241 by 2035, and average $829 per year in increased costs over that period. Electricity costs are projected to increase 90 percent by 2035, gasoline by 58 percent, and natural gas by 55 percent. The cumulative direct costs for a family of four by 2035 will be an astounding $20,000. But since these higher energy costs will cause prices on many other items to increase, Heritage projects the estimated average annual cost for a family of four between 2012 and 2035 will be even higher—$2,979.
Lieberman also estimates manufacturing net job losses averaging 1.14 million at any given time from 2012 through 2035. The hardest hit sector will be farming, whose profits are expected to drop by a staggering average of 57 percent between 2012 and 2035. This would put American farmers at a “global disadvantage” if, as is expected, competing food exporting nations are saddled with no such burdens.
The bill’s stunning overall impact is projected to be an average reduction of gross domestic product by $393 billion annually between 2012 and 2035 for a cumulative loss of $9.4 trillion. Lieberman concludes, “In other words, the nation will be $9.4 trillion poorer with Waxman-Markey than without it.”39
Highlighting the profound disingenuousness and hypocrisy of the Obama Democrats, this horrendous piece of legislation hurts low-income households the most, because they spend a disproportionate share of their incomes on energy. And it is extremely doubtful the bill’s proposed rebates to low-income families will offset the enormous net losses they will sustain.
VAT
On April 21, 2010, Obama suggested a new value-added tax on Americans is still on the table. This was just two days after White House spokesman Robert Gibbs insisted a VAT “is not something the President has proposed nor is it under consideration.”40
Of course, adopting a VAT would flagrantly breach his promise not to raise taxes. Yet on April 27, 2010, as he was discussing the first meeting of his National Commission on Fiscal Responsibility, Obama attacked the media for even asking whether he would still honor his no-new-taxes pledge:Our friends in the media, will ask me and others once a week or once a day about what we’re willing to rule out or rule in. That’s an old Washington game and it’s one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure fiscal footing. So I want to deliver this message today: We’re not playing that game. I’m not going to say what’s in. I’m not going to say what’s out. I want this commission to be free to do its work.41
Clearly, Obama can’t allow pesky questions about old promises to obstruct his quest to transform America.
ELIMINATION OF CAPITAL GAINS TAX
In his so-called comprehensive tax plan, Obama promised on the campaign trail to end capital gains taxes for small businesses. His advisers Austan Goolsbee and Jason Furman affirmed the promise a few weeks prior to the election. Although his stimulus bill raised the 50 percent gain exemption to 75 percent, it did not eliminate it.42 Moreover, it is no secret that Obama plans on increasing the capital gains tax rate from 15 percent to 20 percent.43 His new 3.8 percent Medicare tax also constitutes a capital gains tax increase, as well as a tax on dividends.
JOBS: “THE MOST IMPORTANT DOMESTIC PRIORITY”
In his first State of the Union address, Obama said, “That is why jobs must be our number one focus in 2010 and that is why I am calling for a new jobs bill tonight.” After canceling his trip to Asia a few months later to lobby for final passage of ObamaCare, Obama told an Indonesian TV reporter that healthcare is the “most important domestic priority here in the United States.”44
UNEMPLOYMENT
Obama insisted unemployment would spiral out of control unless Congress passed his stimulus bill, which he said would boost the economy and keep the unemployment rate below 8 percent. Yet more than a year after the bill passed, unemployment continued to hover between 9 and 10 percent. Long before that, in July 2009, Time magazine declared that the “$787-billion stimulus plan is turning out to be far less stimulating than its architects expected” and was “failing by its own measure.”45
That obvious conclusion didn’t keep Obama’s advisers from blithely bragging about the bill’s supposed benefits. But for the bill, we are told, we would have faced financial collapse—something very likely false, but in any event, impossible to disprove. Other Democrats offered different excuses for Obama’s failed promise, claiming the stimulus had not failed (to say otherwise would be a breach of faith in liberal orthodoxy), but that Obama’s advisers had simply underestimated the magnitude of Bush’s economic crisis. That excuse barely passes the laugh test when you consider the degree of urgency Obama brought to the discussion, as when he stated as president-elect that the nation needed to address the “great and growing” economic crisis.46
STATE OF THE UNION SPEECH
Amazingly, the Associated Press followed Obama’s 2010 State of the Union speech with a damning fact check .47 The AP and many others savaged Obama’s credibility, as the following examples amply illustrate: • Obama said that starting in 2011 he would “freeze government spending for three years” except for national security, Medicare, Medicaid, and Social Security. Yet during the campaign, he ridiculed Senator McCain for a similar proposal, saying it was “using a hatchet where you need a scalpel.” Tellingly, his proposed freeze wouldn’t quite even make it to the scalpel level. The Cato Institute reported the freeze only covers 13 percent of the total federal budget, and doesn’t cover the enormous spending mandated under the stimulus bill.48 Heritage Foundation scholars report Obama did not even propose a real freeze because it would not be imposed across the board, but would simply adjust priorities within categories. Without controls on the fastest growing budgetary items, i.e., entitlements, any attempt to bring the budget under control is a farce. Nor was it clear whether the freeze would begin at pre-stimulus levels or at the artificially higher levels following Obama-budgeting. As Heritage put it, “The simple fact is this: no matter how they spin it, the President must hold spending level with last year—minus all the temporary stimulus, TARP and other bailout spending—otherwise this freeze is a fakeroo.”49
• Obama said ObamaCare “would preserve the right of Americans who have insurance to keep their doctor and their plan.”50 But he knew his plan had no such guarantee, and he also knew the plan would likely crowd out private insurers. The chief actuary of the Medicare program estimates 14 million people will lose their employer coverage under ObamaCare, even though many will want to keep it.51 In fact, many companies are now evaluating whether they can save money by paying the penalty in lieu of providing their employees healthcare coverage. AT&T, Caterpillar, John Deere, and Verizon have all made their internal calculations, and those results don’t portend well for their employees.52 Additionally, Investors Business Daily reported that internal White House documents show ObamaCare may result in 51 percent of employers (and 66 percent of small business employers) relinquishing their current healthcare coverage by 2013.53 Another ObamaCare rule is that if an employer switches its healthcare provider to a more cost effective plan it will lose its federal health plan exemptions, which will cause even more employees to lose their current coverage. Of course, just as he exempted unions from the Cadillac tax on high-cost insurance coverage, he reportedly has exempted labor from this new rule as well.54
Furthermore, Obama has publicly supported the elimination of private employer-provided insurance, as discussed below. It’s bad enough his plan would destroy private insurers or turn them into public utilities, but it’s especially offensive that he demonstratively claims otherwise. A few months after ObamaCare was signed into law, Dr. Scott Gottlieb, a former official at the Centers for Medicare and Medicaid Services, wrote that it was already clear that Obama’s promise that Americans could keep their insurance plans and their doctors under ObamaCare “cannot be kept. Insurers and physicians are already reshaping their businesses as a result of Mr. Obama’s plan.”
The bill impos
es caps on insurance company spending and profits. One of the only ways to manage expenses is to reduce the actual cost of products, which means “pushing providers to accept lower fees and reduce their use of costly services like radiology and other diagnostic testing.” To accomplish this, insurers will have to exert more control over doctors—so they “are trying to buy up medical clinics and doctor practices.” In the meantime, says Gottlieb, in anticipation of ObamaCare’s stifling effects, doctors “are selling their practices to local hospitals.” He spells out the bottom line: “Defensive business arrangements designed to blunt Obamacare’s economic impacts will mean less patient choice.”55 The Washington Examiner’s editors agree, noting a Fortune magazine article reporting that “companies across the country are looking at dropping health coverage for their employees because ObamaCare makes it profitable to do so.”56
• Obama said the White House and Congress should “do our work openly, and . . . give our people the government they deserve.” But as the AP noted, instead of working with Republicans, Democrats and the White House had made their private multi-million dollar deals behind closed doors with hospitals, pharmaceuticals, and other stakeholders.
• Obama claimed his administration had “excluded lobbyists from policymaking jobs.” As discussed earlier, with his numerous exemptions to his own ethics rules, this is hardly the case.
Crimes Against Liberty Page 8
