by Big Dog on Jan 26, 2010 at 05:30 Political
Still feeling the heat from the stinging loss in Massachusetts, Barack Obama will pander to the middle class in an attempt to get people to realign with his priorities. The first thing he will do is ask for a three year spending freeze on a very small part of the federal budget. This is in response to mounting concerns among voters regarding out of control spending. Remember, Obama was going to go line by line and cut out the waste.
Instead, he has signed bills, including the stimulus, loaded with pork. He has yet to go through and cut wasteful spending. Count that as another promise broken.
The idea for a freeze would be a start if it were not a ruse. The agencies that will be frozen have already seen budget increases as high as 50% so a freeze means little. They are being frozen at a high level of funding. In order to bring things under control the budget needs to be cut and Obama can start by going line by line as he promised.
The next thing he will do, which will be officially disclosed at the State of the Union Address, is to enact (or expand) programs for the middle class. Obama is expected to introduce the following:
-Nearly doubling the tax credit that families making under $85,000 can receive for child care costs, with some help for families earning up to $115,000, too.
-Capping the size of periodic federal college loan repayments at 10 percent of borrowers’ discretionary income to make payments more affordable.
-Increasing by $1.6 billion the money pumped into a federal fund to help working parents pay for child care, covering an estimated 235,000 additional children.
-Requiring employers who don’t offer 401(k) retirement plans to offer direct-deposit IRAs for their employees, with exemptions for the smallest firms.
Some of these things are more government intervention and will cost more money. The doubled tax credit will lower the tax burden of those who, for the most part, pay little, if any, taxes and it might not even help them. The credit will not result in more of a refund if the person pays no taxes so those on the lower end are not likely to receive much more. But those who do benefit will increase the tax burden on those who pay taxes, including those who have no children in the first place.
Capping loan payments will extend the life of the loan though it might make it easier to pay back. There will be a trade off for this but it might benefit those who are having trouble making the loan payments. One problem I see is they will be paying for a longer period after they graduate.
Pumping more money into a fund to help people pay for child care will cost taxpayers. The insult is that other taxpayers will be paying for their cildren’s care and the care of someone else’s children. Those with no children will also pay for the care of those with children. This is another redistribution plan that Obama loves so much.
Requiring employers to offer IRAs is more government intervention in the private sector. So long as employers only have to offer the plan and don’t have to fund (and are not forced to provide it) then it should not be an issue. The problem is that government does not belong being involved in private business. What a company offers should be between the company and its employees. We will need to watch this one to see how much government creeps into the issue.
Spending more money for people to take care of elderly relatives will cost money and means that we will get to support the parents of other people. They did not raise us, clothe us, feed us or provide us with a house when we were growing up but we will be expected to pay for their care.
Obama is in trouble a year and a week into his term and he is pandering to the middle class to try and soothe their fears. The Brown victory in Massachusetts was a wake up call and Obama knows he must appease the minions by giving them trinkets or his party will be in very serious trouble come November.
None of these things will create jobs (something Obama will note) and none of them reduces spending. They are nothing more than shiny beads given in an attempt to appease the masses and make them think dear leader loves them.
Here is an idea. Get rid of the capital gains tax for a year and eliminate the corporate tax for a year and then raise it to 50% of what it was. Cut government spending by going line by line (where have I heard that before) and eliminating waste. And for now, focus solely on job creation and the economy and forget the grandiose, pie in the sky things.
The liberal leaning website Wonkette has a great take on this issue.
How is that hope and change working out for ya?
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