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On February 1, 2015, David Nather writes on Politico:
Which does the public care about more: Cutting spending? Or “middle-class economics”?
Those are the battle lines for the next year, starting this week. In the budget he’s releasing Monday, President Barack Obama is betting that Americans prefer “middle-class economics” to reducing the federal deficit. Since short-term deficits are down, the logic goes, most Americans will be less worried about them — and more interested in middle-class tax breaks and more spending on new benefits like free community college.
He’s also sure that Americans hate the automatic budget cuts known as the “sequester” as much as he does, and will rally to his call to get rid of it — especially if they can have the middle-class goodies instead.
Republicans in Congress, however, are betting that most of the public is still more worried about long-term spending problems — especially since the deficits will start rising again in a few years — and that they can beat back all the catchy middle-class economics talk with tried-and-true promises to cut spending and fight tax hikes.
Obama’s $4 trillion budget would produce a $474 billion deficit for fiscal year 2016, rising to $639 billion in 2025. But it’s designed to keep annual deficits stable in relation to the nation’s economic output. The deficit would amount to about 2.5 percent of the Gross Domestic Product in 2016, and it would end up in the same place in 2025 even though the dollar amount is higher, according to a source familiar with the budget details.
And the budget would reduce the long-term debt slightly compared to the economy: It would start at 75 percent of GDP in 2016 and ease down to 73.3 percent in 2025.
Obama’s budget will provide the first detailed look at his proposals to help working spouses, parents with child care needs, and families with college costs — as well as a plan to use taxes on foreign earnings to help pay for the nation’s infrastructure needs. It will also spell out how he’d use $74 billion in extra spending to boost support for national priorities like manufacturing, defense and medical research.
He’s been rolling it out piece by piece, just like he did with his State of the Union proposals a few weeks ago. The latest details emerged Sunday: a one-time 14 percent tax on foreign earnings, and a 19 percent tax on future corporate profits overseas, to help pay for $478 billion in infrastructure repairs over six years.
In case you didn’t hear him talk about his new slogan enough in the State of the Union, the budget is where Obama will start shouting “MIDDLE CLASS ECONOMICS,” with a bullhorn.
But will his side prevail? There’s certainly some risk for Obama, as he found when he got pounded by Republicans over his now-abandoned plan to get some of the money for his proposals by taxing “529” college savings plans. And he has to make sure he doesn’t turn off moderate swing voters by playing down deficits too much as he fires up the Democratic base.
That doesn’t make it a good fight for Republicans to have, though. Some are warning that the GOP will have to respond by promoting its own middle-class proposals — like the ones outlined in a “reform conservative” book called “Room to Grow” — and not just talk about slashing spending.
“The Republican Party institutionally has a problem with the middle class, and they need to deal with it,” said Pete Wehner, a senior fellow at the Ethics and Public Policy Center and a leader of the “reform conservative” movement. “I don’t think they should jettison their concern for fiscal sanity. I just think they’ve got to broaden their message, their bandwidth, a lot.”
White House officials are confident that Obama will have the upper hand. They say the new budget will still address the long-term fiscal problems — and even bring down the debt in the later years of the budget — because the math will still work out between the spending and the new tax revenues Obama’s proposals would raise. That’s an approach they say they’ve used in Obama’s past budgets, and they’ll do it again this year.
Independent pollsters say there are no public surveys that test a head-to-head match-up between middle-class economics and deficit concerns, but the recent polls that have been taken suggest that neither party should feel too cocky.
The public may be less concerned about the deficit than it was during the height of Obama’s budget battles with House Republicans, but it’s not as if Americans don’t care about it anymore. A Pew Research Center poll in January found that 64 percent of Americans say the budget deficit is a top national priority, down from 72 percent in 2013, when public concern over the deficit reached its peak.
Yet Obama did well when he outlined his middle-class proposals in the State of the Union address. According to a CNN/ORC poll taken after the speech, 61 percent of the public thought his proposals to help middle-class Americans would be very or somewhat effective; just 37 percent thought they would be ineffective. That doesn’t mean everyone buys into the focus on the middle class, though. A Fox News poll released after the State of the Union found that 61 percent of Americans prefer to improve the economy for everyone, while just 35 percent want to target the middle class.
White House officials insist Obama’s budget isn’t going to present middle-class economics and deficit concerns as an either/or battle. In fact, Obama is suggesting that he’ll find ways to pay for the higher spending so it doesn’t just create more deficits. “If Congress joins me, we can make sure that ending sequestration is fully paid for by cutting inefficient spending and closing tax loopholes,” Obama wrote in a Huffington Post op-ed.
Still, Obama and his aides clearly have been shifting their spotlight to middle-class concerns, and they’re happy to spike the football on the declining short-term deficits, which are about to drop to their lowest level since 2007.
Democrats say the easing of the deficits gives Obama an opening to argue that there’s no need to keep squeezing domestic spending. “The reason they’re so low is that we’ve been underinvesting in America’s priorities,” especially infrastructure, education and scientific research, said Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. “Shortchanging those investments is bad for the middle class.”
http://www.politico.com/story/2015/01/barack-obama-economics-114793.html?hp=t2_r
President Obama, the Democrats and the Republicans, and the rest of today’s political culture continue to misuse debt and continue to engage in furthering the national debt of the nation. The proposed budget enlists taxpayer-funded and debt expedient policies and programs that ease the financial pain of a huge and growing swath of the American citizenry, while at the same time enriching the already wealthy ownership class. But significantly and crucially President Obama, et al fail to get to the core of the problem: a lack of sufficient personal income so that EVERY individual can be economically independent, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government.
Debt will continue to increase as taxpayer-supported and incurred debt is necessary to support programs that transfer wealth from those who are more productive and redistribute to others, namely the poor and lower middle class, in open and concealed forms.
Why do me need debt and deficits? Namely to pay for financial support programs aimed at propping up those who struggle economically and to support the military industrial complex, a massive make-work and wealth-making endeavor that benefits owners of war machinery and operations on a global basis.
The REAL solution is to empower as owners EVERY citizen to meet their own consumption needs. But the how is the challenge.
It all comes down to income and how income is produced. As well, it comes down to how our nation sees its objectives as it relates to the welfare of the citizenry. Empowering EVERY citizen to be productive should be the foundation from which every policy decision is made. Being productive takes two forms: through labor input and through one’s capital assets (tools, machines and other non-human things used to produce products and services needed and wanted by society). The non-human factor relates to technological invention and innovation.
The problem we face is that tectonic shifts in the technologies of production are and will continue to destroy jobs and devalue the worth of labor as the non-human factor of production efficiency replaces the need for mass labor input. This reality is true no matter whether a Republican or Democrat holds political power.
The other problem resides with the structure of the system, which as presently structured empowers those with significant “past savings” (represented by capital asset accumulations, inheritance, etc.) to constantly enrich their capital ownership positions, while the majority of Americans with no significant savings, are shut out of the financial system to acquire capital assets simultaneously with the growth of the economy. Thus, the already wealthy ownership class (the rich), constantly get more wealthy due to their constant acquisition and growth of their wealth-creating, income-producing capital stock portfolios.
The political challenge is to reform the system and provide financial mechanisms which will benefit the vast majority of citizens by empowering them to acquire future capital assets simultaneously with the growth of the economy on the basis that the investments will pay for themselves. Critical aspects of these financial mechanisms will be forms of insured, interest-free capital credit loans, repayable out of the earnings of the investments. The focus must be on growth, without taking anything away from those who already own. Using such self-liquidating capital loan mechanism will result over time in the vast majority of Americans becoming new capitalists, fully supporting sustainable, environmentally sensitive, technological invention and innovation, which they will benefit from as an individual share owner, and become productive through their capital assets and contribute to the building of a future economy that can support general affluence for EVERY child, woman, and man and put us on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
This means that every policy of the government must be evaluated in terms of how many new capitalists will result. For example, its not enough to just commit taxpayer dollars to infrastructure re-building and building in the name of jobs creation, but to stipulate that those corporations bidding on the government contracts be fully employee-owned and pay out fully their profitable earnings to their owners.
If you do not believe that the Republican and Democrat political parties, or other alternative political parties, can transform to the party of “let’s make universal capital ownership a reality, whereby EVERY citizen is an owner,” then you may want to consider the political platform of the Unite America Party. This platform is open to ALL political parties and activists to adopt. The platform was published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html as well as Nation Of Change at http://www.nationofchange.org/platform-unite-america-party-1402409962 and OpEd News at http://www.opednews.com/articles/Platform-of-the-Unite-Amer-by-Gary-Reber-Party-Leadership_Party-Platforms-DNC_Party-Platforms-GOP-RNC_Party-Politics-Democratic-140630-60.html.
I write about these issues and the solutions on my blog site at www.foreconomicjustice.org and on the Center for Economic and Social Justice site at www.cesj.org.
