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Obama's Secret Plan to Raise Taxes
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When Obama returns home, former Clinton adviser Matt Miller says he'll face a mounting budget crisis—and will have to come clean about needing to raise our taxes.
Just before President Obama left for his boffo European tour, he offered an uncharacteristic evasion at home that revealed a looming political vulnerability. It came during his prime-time press conference on March 24, when he called on Chip Reid of CBS.
“At both of your town-hall meetings in California last week,” Reid began, “you said, quote, ‘I didn't run for president to pass on our problems to the next generation.’ But under your budget, the debt will increase $7 trillion over the next ten years. The Congressional Budget Office says $9.3 trillion. ... Isn't that kind of debt exactly what you were talking about when you said ‘passing on our problems to the next generation?’”
For a president who has been unusually willing to answer the questions he is actually asked, Obama’s reply was a telling Beltway dodge. He talked about his Republican critics having failed fiscal responsibility when they were in charge. He tweaked the GOP for lacking the courage to offer an alternative budget themselves. He offered a sidebar on the assumptions used by the White House and the CBO in their projections—differences that were irrelevant, because whichever forecast you believe, the new debt slated to be added on Obama’s watch is unprecedented. And he peddled the stock administration line that you can’t fix the budget without renewing economic growth and slowing the surge in health costs.
The one hard truth Barack Obama won’t utter is that all Americans will have to pay higher taxes before long.
But Obama never answered the question of how his epic debt can be squared with his call for generational responsibility. He can’t, because it can’t.
Behind this fudge is a secret: Obama and his advisers expect to limit such debt via broader tax increases, presumably in a second term. As every honest observer knows (and as I show in this chapter of my book The Tyranny of Dead Ideas), once this recession is past, taxes will go up in the years ahead no matter who is in power. John McCain’s top economic advisers from the campaign say so themselves. That’s because we’re retiring the baby boom, which means we’ll be doubling the number of people on Social Security and Medicare. We already have trillions of dollars in unfunded promises in these programs. The math simply doesn’t work at current levels of taxation.
This makes Obama’s debt dilemma an interesting case study in how an uncommonly forthright politician weighs the virtue of candor versus its political cost. Remember, Obama is the candidate who wouldn’t join the pandering when both McCain and Hillary Clinton were peddling that bogus gas-tax “holiday” last summer. He’s the president who routinely eschews happy talk, telling us the economy may well get worse before it gets better. But the one hard truth Barack Obama won’t utter is that all Americans will have to pay higher taxes before long.
Why not? The answer, at one level, is obvious, but it’s instructive to dissect. Having sat in such meetings in the early Clinton years, I suspect the conversation at the White House ran something like this. Yes, the president’s advisers told him, at some point taxes will need to rise broadly for the reasons described above. If we didn’t inherit this economic mess, we might be discussing it now as part of a plan to put Medicare and Social Security on a sounder footing. But tax cuts are needed for most Americans to combat the recession—and, by the way, that’s what you promised in the campaign. Saying the truth publicly—that taxes will need to rise once the recession is past—will let the GOP brand you as a tax-and-spend socialist. They’ll try to do that anyway based on the modest taxes for the top you’re proposing, but if you go this further step, their charge may well stick. Given how tough times are for most Americans today, floating the prospect of future tax increases would cost you too much support, and your ambitious agenda—hard to enact under any circumstances—would be imperiled. Better to finesse this tax thing for now.
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koreanovice
I thought I heard BO say previously that nothing is free and that if we wanted roads, bridges, and high-speed trains built that we would have to pay for it. So I don't see where he is being intellectually dishonest.
tmuiney
It is scary how high on the pedastal so many people have Obama. He has been as dishonest as most, if not all, other politicians.Somehow the guy gets out clean. The purchase of his home through Tony Resco should have been enough to illustrate early in his campaign that he plays the game just like everyone else.
AndreainNY
Intellectual honesty? I would think that were Obama intellectually honest he would have not made so many promises that he could not keep during his campaign.
Surely, a more honest assessment of his own capabilities would have helped him see how his promises might be just a tad more difficult, if not impossible, for him to deliver? Of course, no one demanded real honesty from him.
For example, no one demanded to know exactly how he would achieve bipartisanship with an opposing, galvanized force of Republicans. And when exactly were those line-by-line budget reviews going to occur in the budget process? Few expected them after he had signed the budgets.
Taxes are a case where an Obama's over-promise meet reality. He needs to reconcile the two. I'm sure Axelrod and Carville will be able to create an environment wherein a tax increase will seem insignificant compared to, say, a Palin run for president or a Bush/Cheney indictment.
mschen15
Everyone wants something, but no one wants to pay for it.
I consider myself a Conservative, but I see nothing wrong with raising taxes on EVERYONE. The key word being ...EVERYONE.
It really bothers me that about 50% of the country pay no taxes at all and yet it is that 50% that reaps the largest benefit.
What is wrong with people paying 5-10%, or at minimum $100 over the course of the year? Can't these freeloaders pitch in a little?
Why is it ok to tax Social Security and Unemployment, but not Food Stamps, Welfare, HUD Government Housing, or FEMA handouts? Why aren't those taxed as in kind income? Why not stop giving tax cuts to people who pay no taxes?
Second: Here's another idea; why don't we stop all the "child tax credits" after one child. Why should those who are a greater burden on society pay even less as their burden grows?
spk2moi
Matt,
If you were intellectually honest, you would add that Obama has outright lied (or fudged as you would like to call it!) on almost every signature issue since taking office...saying on day two he would have the most ethical administration, and then beginning days later to offer waivers to those who didn't pass the smell test. Telling us he would get rid of pork, then with a straight face saying how proud he was to pass a bill without it. We could go on, but your contortions to present this guy as intellectually honest is painful. Why not stop drinking the koolaide, and look this guy straight in the eye (and yourself straight in the mirror) for what he is. Even your article offers nothing more than more dishonesty. If it's taxes you want to raise (nothing new for Democrats), then say it! Wait until April 15, and you will see how many Americans like the profligate spending of this administration, and the outright dishonesty he's projecting. I'm predicting that even you will turn against him after another year or so of the dodging!
debbieqd
There is no secret here. We all get it -- we're going to have to pay for the necessary things we want and need. Now is not the time for President Obama to hammer us with that truth.
Playing politics is a reality -- and the President is playing the game well on our behalf. I think six years from now, when we can look back, America will be astounded by the change wrought by this President -- and all but a few will be very pleased.
opedanderson
Hello, Obama-bots!
There is no way that Obama can avoid raising taxes on the middle class!
Change we can Believe in! Yes We Can Yes We Can
Obama Obama Obama......
pdavid
I'm at a loss to understand where Miller picked up the idea that Obama is some paragon of intellectual honesty. Our magical president promised to go "line by line" through the budget to reduce waste, and a "net spending cut" overall. He promised tax cuts to people who don't pay any income taxes, and declared himself a free-trader though he voted against every free trade agreement that came up while he was in the Senate. He laughed off any Iranian threat while he was speaking to a group of Leftists, and then 2 weeks later warned an AIPAC audience of a "grave" Iranian threat. He promised to sit down with Hugo Chavez, but then a few days lateer warned he would isolate any supporter of Colombia's FARC terrorists.
Nobody forced Obama to waste a trillion dollars on "stimulus," and he could have vetoed that $600 billion omnibus atrocity a few weeks ago. His gargantuan budget request will bury us under an avalanche of debt.
I question not only Obama's, but Miller's intellectual honesty.
kdizzydaze
"For a president who has been unusually willing to answer the questions he is actually asked"
Really?? Really??
This guy gives unbelievably longwinded non-answers.
As for taxes, when the wealthy (whose wealth is invested in businesses where us common folk work and where we shop) and the small business owners are taxed higher - do you think they will simply eat that tax? No, it will be passed down to us (talk about trickle down - you are about to see it in action). Plus, do you really believe that all business owners are "wealthy" and have life beat? My next door neighbor owns his own business, works 70 hours per week and is in the process of short-selling his house and just might declare bankruptcy just to protect what little he has. Yeah, that class evny of the Dems is really working out for all of us. Nice.
You know, many of us in the U.S. hate paying more in taxes, regardless of who holds the highest office in the land. You saw what happened to Bush Sr. we shall see what happens to Obama
flyoverland
You can't be intellecutally honest and use rhetoric to mislead as Obama does. He isn't anything more than another political hack who will say anything to get elected. The middle class will end up paying for it just like it always does. There aren't enough rich to soak and the number of rich will decline dramatically when returns are tabulated April 15th and somewhere along the line we decided the poor should not contribute a dime for its support. A country where more than half do not pay any taxes is doomed. It is much easier to be a moocher than an achiever.
AndreainNY
The hangup is probably an Axelord poll that shows people expect Obama to keep his promise on taxes.
mandennis
same goes to candidate McCain. promising across the board tax cuts which in reality the economy cannot afford.
just ask Holtz-Eakin when he was interviewed by Joe Scarborough during the campaign. Holtz-Eakin gave a reluctant yes when pressed on by Joe. look it up at Youtube.
no matter how hard anyone tries, either Obama or McCain will be doing the same thing that Reagan and George HW Bush did in the end when faced with growing deficits. Raise taxes on everyone.
danceswithtrees
It's not his raising taxes that I'm worried about. "it's the spending...stupid" Who says we have to have 3 to 4 trillion deficits a year to "stimulate" the economy. Where in the past has this worked? Japan's "lost decade" was based on this same flawed theory these amateurs are employing. At the end of the 3 or 4 years we will be in the same (let's face it) depression. Only we will also be up past our ears in debt. Can you say ONE TERM?
mandennis
"... another political hack who will say anything to get elected."
which party was it that promised more tax cuts? sounds like that "Read my lips - no new taxes."
Bulldoglover100
Really? LOL raise our taxes when he gets home? Sure you want to stand by that statement? LOL Just like the Repuglicans stood by the CBO report that said the stimulas would hurt the economy...and they were so wrong and the facts now show it....seems you repugs can only scream the sky is falling and hope that it does...no wonder people laugh at you now.
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