GOP critics hit Obama's $3.8 trillion budget
Photo
Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Tuesday, Feb. 14, 2012, before the Senate Finance Committee hearing on President Barack Obama's fiscal 2013 federal budget.
WASHINGTON — Treasury Secretary Timothy Geithner told Congress Tuesday that the president's new $3.8 trillion spending plan would impose new taxes on only 2 percent of the nation's wealthiest families and the alternative would be to seek more painful cuts in other government programs such as defense, Social Security and Medicare.
Geithner defended the new budget plan in the face of intense attacks from GOP members of the Senate Finance Committee. Republican Sen. Orrin Hatch of Utah told Geithner that the administration's spending plan would give the country a "permanently larger, European-inspired government."
But Geithner said deeper spending cuts now would damage economic growth and push more Americans into poverty at a time when the economy is still struggling to recover from a deep recession.
Geithner told the committee that the administration hopes to send Congress next week a framework for making changes in the country's corporate tax structure.
He said the administration would not offer detailed legislative language but rather broad principles for corporate tax reform. He said the administration would propose eliminating a number of current business tax breaks in an effort to lower the corporate tax rate.
The nominal U.S. corporate tax rate is 35 percent, the highest in the world after Japan, but few companies pay that much after taking various deductions.
Obama has proposed lowering that tax rate but has not said by how much it should be lowered. The president has also proposed ending tax breaks for U.S. companies moving jobs or profits to foreign countries while suggesting tax breaks for businesses that move jobs back to the United States.
Geithner did not offer any hints about what recommendations the administration will make on corporate rates in its submission to Congress.
Congress may put off the tough decisions on the budget until after the November elections, but the spending document will certainly be used as a campaign document for Obama and a key target for Republicans running against Democrats.
Republican Mitt Romney, who is campaigning for the GOP nomination to challenge Obama in the fall, called the budget Obama released Monday "an insult to the American taxpayer." GOP candidates Rick Santorum, Newt Gingrich and Ron Paul are all advocating bigger spending cuts to control the deficits, and all the GOP candidates oppose Obama's tax increases.
"The president's budget is a gloomy reflection of his failed policies of the past, not a bold plan for America's future," House Speaker John Boehner, R-Ohio, said Monday after the budget was released. "The president offered a collection of rehashes, gimmicks and tax increases that will make our economy worse."
Republicans are arguing for deeper spending cuts and a frontal assault on the biggest drivers of the deficit, the soaring costs of Medicare and Medicaid, whose already sizable costs are projected to double in future years as baby boomers retire.
Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, said Monday that he expected the Republican-controlled House would in coming weeks pass an alternative to the Obama budget that would gain control of the deficit, not by raising taxes but by curtailing Medicare and Medicaid.
"President Obama's irresponsible budget is a recipe for a debt crisis and the decline of America," Ryan said.
Obama's cuts in Medicare and Medicaid avoid cuts in benefits and instead make modest trims in payments to health care providers. In contrast, the Republican House last year approved Ryan's plan, which would essentially transform Medicare into a voucher system in which future seniors would get a fixed amount to buy medical insurance.
The Obama budget proposes spending $3.8 trillion in the 2013 budget year, which begins Oct. 1. It would achieve $4 trillion in deficit cuts in part through restraining the growth of many government programs, adhering to the agreement Congress approved in August for spending caps to achieve $900 billion in deficit reduction over a decade.
Obama's plan also proposes additional deficit reduction in order to avoid $1.2 trillion in across-the-board cuts scheduled to take effect next January.
But the president relies on $1.5 trillion in tax increases, mainly by allowing the Bush-era tax cuts to expire on families making more than $250,000 per year, imposing additional taxes on those making more than $1 million per year and eliminating various corporate tax breaks.
The tax increases all have been rejected by Republicans.
With both parties holding entrenched positions, it is very likely that no solution will be found before the November elections, with both sides preferring to use the debate to score political points.
If that occurs, Congress will probably be back in Washington after the November elections for a lame-duck session to resolve the battle over taxes and spending cuts.
Lawmakers are facing end-of-the-year deadlines when the Bush-era tax cuts on all taxpayers expire and across-the-board spending cuts will go into effect if lawmakers can't agree on $1.2 trillion in further deficit reduction over the next decade.
Feb 17, 2012 at 9:54 a.m.
Suggest removal
What I find funny is in 2010 the Republican's took back Congress pretty much via a landslide. Anybody remember what they campaigned on to win? I do, it was to stop the free for all spending the current White House is doing. Yes, they said they were going to stop Obama from spending money like it was free! In order to do that they had to become the party of "NO" in the process. And now that they are known to be the party of NO to stop the spending, American's still are not happy. So what exactly do we as middle class American's truely want? In 2010, the majority of American's wanted the spending to stop and the Republican's took the house and have pretty much slowed down the free for all spending. Whether we want to admit it or not, they did what they said they would do, which is say no! So what exactly is it that American's want done? You can take all the rich folk's money and the problem still isn't solved. Remember that money won't be put in the public sector via jobs, it will go to the government via hand outs. So now that the rich are no longer rich because the government has all their money, now what? Who's going to create jobs now that the rich don't have their money anymore? Do we all just work for the government? Now who pays for the government to survive? Jcommon hit the nail right on the head. The politicians are pitting us all against each other so we don't truely look at them for what they are. At some point to fix all the problems some very hard and unpopular decision will have to be made to turn this nightmare of a government around. Try and run a company the way our govenment operates and its game over in 3 months! People are going to have to start looking at their own parties for what they do that is causing all these issues. No one party is not guilty for what has happened to our country. Anyone who thinks their party is perfect and everything was caused by the other side is a 100% idiot and out of touch with reality! So once again the question comes full circle, What do American's really want done?
Feb 16, 2012 at 11:17 a.m.
Suggest removal
Did anyone see Stossl's example of what the government budget looks like in terms of income vs expenditures and then cuts in spending?
$21,700 Income
$38,200 Spending
$16,500 Additional Debt
$142,000 Balance of debt
$385 Cuts in Spending
This is the Obama budget and Obama math. Is this how we would run a household or a business?
Feb 16, 2012 at 10:56 a.m.
Suggest removal
If you make 20K from Walmart, you are not paying 24% tax. Your effective tax rate will be way below that. I would bet it is closer to 5%-6%. If not, get a better accountant.
Feb 16, 2012 at 10:43 a.m.
Suggest removal
Do you really want to keep raising taxes? I don't understand that logic whatsoever.
Feb 16, 2012 at 10:38 a.m.
Suggest removal
Income from dividends and income from working at Walmart are not the same. What if you took your 20k from Walmart, paid income tax, then took that money and made 5k from dividends? You would be taxed the same for those dividends as what Warren Buffet would be.
Feb 15, 2012 at 11:34 a.m.
Suggest removal
People -- You cannot cover the spending currently proposed if you took every peeny earned from the 1%. The reality is that increasing taxes on dividends does not fill the hole -- its not even close. If the dems got serious about cuts in spending, made changes to entitlements, the repubs wouldnt have much ground to stand on. It would negate the entire arguement. The 2 sides -- both -- want all or nothing and are using our lives -- as the political football. The quantitative easing is creating inflation and deflation of the US $$ against most currencies. There are trillions of $$ sitting out and waiting to see what the government does about spending, regulation, healthcare and entitlements, because it will affect their long term cost structures.
The admin is using the American people and by his actions or lack thereof -- creating a larger lower class than any change that would be made. When we vote ALL of them out and -- as Pelosi said drain the swamp (And she is one of the swamp rats), we will be much better off.
Feb 15, 2012 at 11:06 a.m.
Suggest removal
nOOb - good points.
jcommon - how about this article from Politifact:
http://www.politifact.com/truth-o-meter/...
Feb 15, 2012 at 10:37 a.m.
Suggest removal
I think the devil is in the details if I make 20K working a Wal-Mart and you make 20K in returns from your investments (dividends) than I pay 24% and you pay 14% or 15% because return on investments is taxed at an entirely different rate. This was intended to spur investment in companies creating more jobs and a better life for the people employed there. However since most investments today are not creating jobs in THIS COUNTRY but in china, japan, India as well as a host of others then that tax break is no longer serving its purpose and should be stopped. However by making statements like NO NEW TAX's we have effectively cemented this problem into the future of our budgets. Is that still considered controlling spending when we fail to stop spending money that is not doing what it was intended to do?
Feb 15, 2012 at 9:53 a.m.
Suggest removal
Please site an example of your comment.
If Warren Buffet makes 20k and you make 20k over the course of the year, you will both pay the same amount of federal taxes on that income provided that income is from the same place. It would be the same if it was 1 dollar or 1 million dollars. Income from the same source is taxed the same regardless if the person is middle class or upper class.
Feb 15, 2012 at 9:43 a.m.
Suggest removal
More tax breaks have been given to the 1% because of the power (and favors) money can buy. Power that the middle class does is not afforded. I am saying that the tax structure is just as messed up as everything else these "politicians" have put there hands on. it is not to be discounted when looking to fix what is wrong in this country. I have never heard anyone explain yet how someone in the 1% bracket can pay less taxes by percentage than the majority of Americans, and how that can be considered fair. Please explain that to me, as I clearly don't see the same picture.
I am not talking about implementing a flat tax. Just get the pork out of the tax structure that benefits only 1% of the people. Trickle down just don't work, Ronnie.
Feb 15, 2012 at 9:25 a.m.
Suggest removal
The 100% comment was to prove a point, no matter how much the government takes, they still spend more. Also, you do realize that within the current tax structure, we all pay the same on the same dollars. You would pay the same on your dividends as Warren Buffet. Nowhere does it say that if you make 1 million dollars, then you automatically pay only 1% of your income. They need to quit worrying about the current tax structure and concentrate on getting spending under control first.
Feb 15, 2012 at 9:11 a.m.
Suggest removal
jcommon - I never heard anyone say take 100% from the 1%, just make them pay fair taxes. Or do you believe the fact that billionaires pay only 15%, while middle class can pay between 18 and 24% (because we don't get the tax breaks the 1% got from their buddies)is fair????
It's not class warfare to ask for equal tax payments from all.
But you are right in that spending and handouts should be looked at to make sure we are getting the best bang for our taxpayer buck. And partisanship is so rampant, that no plan will ever be best for us.
Feb 15, 2012 at 8:56 a.m.
Suggest removal
To All US Legislatures:
Stop messing with the tax structure and START reducing spending and handouts. Is it that hard to figure out? You can take 100% of the money from the 1% and the government would be able to run for 1 Month. 1 month, that's it. Quit using class warfare to pit people against each other and start doing something to help the US as a country. Obama doesn't have a plan to fix the US, that is for sure, but it sure doesn't seem like anyone else does either.
Feb 15, 2012 at 8:30 a.m.
Suggest removal
Why can't we control spending AND make the rich pay the same percentage in taxes as the middle class? I mean, Warren Buffet paid only 15%, and you know more of the 1% do the same. Oh yeah, Republicant's don't want to anger Daddy Warbucks as he might take away their political funding for that lying political party.
Face it. All politicians have bad points these days. But looking at the news, the Republican party leads in having the most creepiest, unfaithful, money pandering leeches who get involved in illegal activities. yeah, lets listen to the likes of Boehnhead, Fake Newton, and Rick Sanitarium.
Feb 15, 2012 at 7:42 a.m.
Suggest removal
The nation needs to "start living within its means," Obama told children at Parkville Middle School and Center for Technology in Baltimore. (quote from AARP website)
Now he is lying to children, what a lowlife.
Feb 15, 2012 at 7:22 a.m.
Suggest removal
Pathetic.
Feb 14, 2012 at 6:46 p.m.
Suggest removal
The only Republican I know of that makes any sense is Paul Ryan. Everyone else wants to grow government further. It's just that different parties want government to grow in different ways.
I don't think there's anyone in congress who's done as much work trying to really understand the economy like Ryan has.
It's too bad he keeps voting for the Patriot Act, the wars in the Middle East, and his medieval religious stance on abortion among other things. Otherwise I'd vote for him.
Feb 14, 2012 at 5:16 p.m.
Suggest removal
Defense budget as political football...Nice one Panetta.
Feb 14, 2012 at 4:56 p.m.
Suggest removal
I love this picture of Geithner-looks like he's about to choke us (the taxpayers)to death. I've said it before but I wouldn't let this guy do my taxes (1040A form).
Before you post a comment, consider this:
Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy AgreementPost Comment
Commenting requires registration.