Obama’s 2010 Budget Fantasy

by  Lurita Doan
09/01/2009
Americans, historically, have enjoyed “tall tales”, and the White House seems to have continued the Pecos Bill folklore tradition.  In one tale, Pecos Bill finds a way to saddle and ride a tornado, uses a rattlesnake as a lasso, and even digs the Grand Canyon.

That’s the same sort of take spun by the White House … in its FY10 Mid-Session Budget Review.  The Obama administration is telling some whoppers that would make even Pecos Bill blush.

The first appears on page one.  The Obama Administration claims it has “reoriented the Nation back to a path toward fiscal discipline.”   Readers are left to wonder how the claim of “fiscal discipline” stands, in a bloated budget that swells the national debt by $9 trillion over the next few years.  (That statement makes Pecos Bill’s claims seem modest.)

The second whopper concerns the administration’s economic growth strategies.  The Mid-Session report blames healthcare for the nation’s economic problems (“health care is at the core of the country’s long-term fiscal problem”) and suggests that passing healthcare reform legislation that adds another $1.3 trillion to the deficit, is the best way to grow the economy.
Got that?  Team Obama claims that borrowing another $1.3 trillion, and then spending it on a dodgy program that will provide questionable benefits to a reluctant nation, is the solution.

But there’s more. The president’s new budgetary guidance claims increased taxes are the engine to spur economic growth (p. 43-55) on a slowing GDP.  Raising taxes during an economic slump has always stunted growth, and has never spurred growth; but, pay that no mind.

As in most “tall tales”, the FY10 Mid-Session Budget Review is stuffed with startling, contradictory, statements. For example, President Obama’s frequent assurances that he will not raise taxes on the average American are contradicted on page 43, which identifies the millions of dollars the government will raise via an FAA user fee on air travel.

That certainly seems to qualify as a tax that will affect most Americans, especially at Christmas and Thanksgiving, times when families travel the most.

There’s lots of fine rhetoric about growing the economy, but many, nasty surprises, buried in the fine print., will make growth harder for American firms, and make it difficult to export their goods and services and create additional jobs.

One example on page 47 indicates the Administration intends to levy CBP “inspection user fees” on cross border trade and raise $124 million in user taxes.  In addition, an APHIS user fee (p.46) for $20 million that taxes trade crossing the northern and southern borders, will hit truckers and trade the hardest.  When combined with the increase in corporate taxes (p.43-45), the Administration’s actions may have the unintended consequences of producing a chilling effect on cross-border trade.

Erecting more trade barriers doesn’t build economic prosperity.  Bureaucratic foul-ups and chronic inefficiency at the border throttle legitimate trade and travel.  Exporters must wait for hours, in mile long lines, as they attempt to cross the border.  Now, the Obama Administration has added the prospect of additional paperwork and taxes, which will do little to encourage the much-needed trade.

As tall tales go, the budget review is a doozy.  Look no further than the title for the FY10 budget , “A New Era of Responsibility: Renewing America’s Promise”.  I bet most Americans believe that an “era of responsibility” would require decision makers to accept responsibility for their actions and accept the consequences, good or bad that follow.  Instead, the Review insists that all the problems, past present and future, are the fault of the previous administration.

Baselines in the budget have become a moving target, thanks to various “updated technical assumptions” by the administration.  Worse, the Mid-Session report prepares the ingredients for a cook-the-books recipe, creating a favorable financial picture for FY10 and FY11.  Developing calculations based on laws not yet passed and policies not yet approved (page 56) is disingenuous at the least and very possibly dishonest.
While the claims of Pecos Bill, Paul Bunyan or John Henry amuse and entertain, the claims in the Obama budget are depressing.  In publishing the FY10 Mid Session Review, by repeatedly blaming the previous Administration or by fudging the numbers, the Obama Administration has written the tallest of tall tales.

Tall tales and “fakelore” have long been a part of the culture and history of our country.  With so many whoppers in the mid-session review, President Obama is challenging Pecos Bill and Sloe Foot Sue for the tallest American tale, where the unbelievable is related as if it were true and factual.

Tall tales may make for entertaining reading; I just don’t think the FY10 Mid-Session Budget Review is the place for tales to be given new life.

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