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Economist: Obama using 'abracadabra budgeting'

Posted By -NO AUTHOR- On 02/13/2013 @ 9:38 pm In Front Page,Money,Politics,U.S. | No Comments

President Obama claimed significant progress in deficit reduction, called for additional tax hikes and pushed dozens of new programs that he says won’t add a dime to the deficit.

However, Club for Growth founder and Wall Street Journal economist Stephen Moore told WND the facts show Obama is not at all serious about reducing our deficit and is engaging in budgetary sleight of hand when it comes to his agenda.

In his speech, Obama said he and members of Congress have already agreed to $2.5 trillion in deficit reduction and are on the way to fiscal stability. Moore said technically those cuts are scheduled to take effect in the next few years, but he’s very skeptical that they’ll actually happen.

“The question I would ask is, ‘Mr. President, you’re not willing to accept cuts that are supposed to happen now. Who would believe that you’re going to accept cuts that are going to happen in 2014, ’15, ’16, ’17 and ’18?’” Moore said. “No, there are no cuts. In fact, the president created this monster of Obamacare which is going to blow another hole in the budget. We’re nowhere near stabilizing our finances. The $2.5 trillion of cuts is science fiction, and I think the real discouraging note of that talk is that he’s not serious about getting serious about cutting those spending programs.”

Moore noted that despite the president’s description of the nation’s fiscal health, the Congressional Budget Office is projecting trillion-dollar deficits as far as the eye can see.

“That is the road to ruin,” he said. “It’s not a road to recovery.”

Obama also addressed the looming sequestration that is set to take effect March 1. The president called the cuts to defense and other programs harsh and arbitrary, but Moore said that approach strikes him as ironic because the sequester was Obama’s idea.

“President Obama came up with this idea because he didn’t think that Republicans wouldn’t go along with the defense cuts and would therefore agree to a tax increase. What happened was, Republicans said (they) can live with these cuts. Then President Obama changed his stance, and now he wants to veto the very cuts that he himself created,” Moore said. “Just last year he said he would veto any attempt to get rid of the sequester.”

Obama rejected Republican efforts to shift the defense spending cuts to other areas and said only a “balanced approach” would suffice to avert the sequester. He failed to specify which spending cuts would be part of that balance, but he did say ending tax loopholes on wealthy individuals and some industries would provide additional revenue.

Moore said he and many other economists and business owners are strong proponents of tax reform, but their vision and the Obama vision are very different.

“The idea of tax reform is to close those loopholes and to lower tax rates to make the system more understandable, more efficient and more pro-jobs. That’s not what the president is talking about. He’s talking about closing loopholes and using that money for more spending programs,” Moore said. “That is a perversion of the whole idea of a bipartisan approach to tax reform. He’s had three or four commissions in his first term that he appointed the people to who all said we need to get those corporate and business tax rates down. He has no interest in that.”

Moore said this is a critical moment for Republicans, and he believes giving into Obama on taxes now could even be fatal to the GOP.

“The Republicans will be extinct. They will be an endangered species if they continue to raise taxes,” he said. “They agreed to the increase on Jan. 1 because they didn’t have many other options, but I think if they were to cave in on higher taxes there would be a third party created in this country that really believes in growth and the Reagan idea of low taxes and getting government spending under control.”

In his address, Obama also outlined dozens of new initiatives that he promises would not add “one dime” to the deficit. Moore said the president’s vow does not match reality.

“I think that sounds like abracadabra budgeting to me,” Moore said. “He proposed tens of billions of dollars of new spending programs, and Lord knows where he’s going to get the money to pay for it. Does he really think he can get all that money out of the top one percent? We just had the biggest tax increase in 50 years starting on Jan. 1 with the increase in the capital gains tax, the dividend tax, the estate tax, the business tax. All those went up. We can’t keep raising taxes to pay for all these play things in the budget that President Obama wants to create.

“There’s no offsets to this. It will increase the deficit,” he warned. “It’ll make our government more inefficient, and debt, which is already $16 trillion, will grow even higher.”


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