Liberals constantly lampoon the idea that tax cuts will allow businesses and wealthy individuals to reinvest extra cash in the private economy, resulting in more jobs and cheaper goods and services. This theory has been derisively labeled “trickle-down economics.” Heather Cirmo, a conservative pundit, and I have a new term to describe President Obama’s version of class-warfare economics: trickle-down Obamanomics.
Here is how it works: The President will propose massive tax increases on the American people, with the promise that some of the new spending that results will trickle down to the middle-class and poor. Increased government money will be siphoned off to pay for new government bureaucrats to administer newly created programs. It will also be funneled to union-controlled spending projects so they can fund left-wing political campaigns and pay people to protest violently in Occupy Wall Street.
Obama’s American Jobs Act is an excellent case study. First, the President hikes taxes. His version of the American Jobs Act has increased taxes on individuals making more than $200,000 a year and families making more than $250,000 a year. Other tax increases add up to some $450 billion over a 10-year period. Then the President squanders just less than $450 billion in new spending and preferential tax benefits. His bill contained a $10 billion government-run infrastructure slush fund, $50 billion for union-controlled road projects, $30 billion for greening schools, and $35 billion for teachers/first responders.
The President’s first trickle-down Obamanomics experiment didn’t work, so why should this one? Just look at his $850 billion so-called stimulus. These same ideas resulted in 9.1% unemployment, 2 million more unemployed individuals, venture Socialist spending on enriching the CEOs of green-energy initiatives such as Solyndra, Fisker and SunPower.
Balanced Budget Amendment to the Constitution
House Republicans will soon make a final decision on whether they will force a vote on the version of a Balanced Budget Amendment to the Constitution (BBA) sponsored by Utah Republican Senators Orrin Hatch and Mike Lee, or a weaker version.
The Hatch-Lee version caps the size of government at 18% of the economic output of the United States, and forces a supermajority vote for balancing the budget by raising taxes. Weaker versions would strip out these protections against higher taxes and bigger government. Some politicians forget that the purpose of a BBA is to limit the size and scope of the federal government.
A Super Committee Turkey
The Thanksgiving deadline for the Joint Select Committee on Deficit Reduction, also known as the Super Committee, to produce a bill to cut between $1.2 and $1.5 trillion from the projected deficit is fast approaching. The odds now are that the Super Committee won’t reach an agreement, but if it does, it will be a terrible deal for conservatives. Congressional Quarterly is reporting that Democrats will not come to the table for a deal until Republicans support some tax increases. This can happen in one of two ways:
First, Republicans could support a deal that will close some tax loopholes in exchange for the extension of some Bush tax cuts. This would be a big mistake, because it’s very likely that some, if not all, of the Bush tax cuts will stay in place in late 2012 or early 2013 outside the Super Committee.
Second, it’s possible that the Super Committee will set up a sneaky scenario in which taxes can be hiked outside the regular rules of business in the House and Senate. As Hazen Marshall, former staff director of the Senate Budget Committee under Sen. Don Nickles (R.-Okla.), told HUMAN EVENTS: “Because of their limited time and continued stalemate, I think it’s very plausible that the select committee could decide to punt their problem of tax and entitlement reforms back to Congress in the form of instructions to committees to cut the deficit by a date certain with procedural protections similar to a reconciliation bill, which is a complicated way of saying that the Super Committee could in essence create another super committee.
Get ready for an epic Republican cave on taxes if the Super Committee comes to an agreement and reports a bill to the House and Senate.
Appropriations Overspending Battle
The Senate last week passed a smaller version of the appropriations measures for Fiscal Year 2012 known as the “minibus” bill after Sen. Jeff Sessions (R.-Ala.) battled hard against congressional overspending. Sessions noted that the minibus actually increased spending over total levels from last year of $9.4 billion in the domain of the Agriculture, CJS (Commerce-Justice-Science) and THUD (Transportation and Housing and Urban Development, and Related Agencies) appropriations bills. Sessions forced a vote that failed on an amendment to curtail the abuse of food stamps that would have saved the taxpayers at least $10 billion. Three cheers for Sen. Sessions!
Brian Darling is a senior fellow at The Heritage Foundation.