The voters and Congress are fixated on health-care reform, which may or may not get passed. But the inescapable issue looming on the horizon is the debt and what Obama plans to do about it. The Washington Post reports:
During last year’s campaign, President Obama vowed to enact a bold agenda without raising taxes for the middle class, a pledge budget experts viewed with skepticism. Since then, a severe recession, massive deficits and a national debt that is swelling toward a 50-year high have only made his promise harder to keep.
The Obama administration has insisted that the pledge will stand. But the president’s top economic advisers have refused to rule out broad-based tax increases to close the yawning gap between federal revenue and government spending and are warning of tough choices ahead.
You know where this is heading. Yup: “Obama could try to cut spending, but his budget is probably already more frugal than politics will bear, budget analysts say.” Not a penny to spare in the non-stimulus plan or the $3.5 trillion budget, is there? Nope, we’ve cut to the bone. And not a word in the Post‘s story that now it might be best to put off health-care “reform,” which will add to our fiscal woes. Instead, raise taxes—it’s easy! The Post helpfully suggests:
By contrast, Obama could raise taxes without taking any legislative action. If he let all the Bush tax cuts expire next year and refused to enact legislation to restrain the alternative minimum tax, deficits would be about $200 billion a year lower and the debt would stop growing as a percentage of the economy, according to Gale’s analysis of new data from the nonpartisan Congressional Budget Office.
Well, the Post does concede ”that would mean big tax increases for most American families, violating Obama’s pledge.” But what’s the alternative given our budget frugality?
If you have a sense that both the mainstream media and the Obama team are operating in a parallel universe you are right. The White House and Democratic Congress would rather risk the wrath of the voters and send the economy diving back for a double-dip recession with the imposition of tax hikes than set about seriously curtailing spending, including entitlements. Well, they won, we’ve been told. Let’s see if they have the nerve to use their power to pass the largest tax hike in history—before we’ve climbed out of the recession. You think voters are angry now—wait until the tax-hike town halls get going.