Heartland Institute Experts Comment on Obama’s 2014 Budget Plan

April 10, 2013

President Barack Obama released his 2014 budget proposal, which would spend $3.8 trillion. The budget contains a tax hike of some $800 billion, including a requirement that “millionaires” pay at least 30 percent of their income in taxes, and places a 28 percent cap on deductions for charitable giving for the top 2 percent. Spending cuts include reductions in payments to doctors via Medicare, and lower cost-of-living adjustments for Social Security recipients.

Obama’s budget also imposes a tobacco tax to pay for “universal preschool,” and the president pledged to invest in the building of infrastructure, “green jobs,” and alternative energy sources.

The following statements from public policy experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Director of Communications Jim Lakely at jlakely@heartland.org and 312/377-4000 or (cell) 312/731-9364.


“President Obama declared when releasing his budget blueprint: ‘I will not agree to any deal that seeks to cut the deficit on the backs of middle class families.’ Yet he wants to cut Social Security, Medicare and other benefits, which would cut the deficit on the backs of those families.

“Obama also would raise spending another 6 percent over current spending levels. His 2014 budget would be 27 percent higher than when he took office. This increase exceeds economic growth, price inflation, wage inflation, personal income growth, population growth, and nearly every other measure of the country's economic performance. At least President Obama's spending increases have been smaller than the ones we saw under his predecessor, the compassionately conservative Republican, George W. Bush. I don't know if this should encourage or discourage persons who believe in fiscal responsibility.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News
sstanek@heartland.org
312/377-4000


"The president claims he wants to improve the economy, yet he proposes a minimum wage increase that both economic theory and historical experience show will raise unemployment among teenagers and minorities. He also wants to raise regressive taxes that burden the poor to fund preschool programs that empirical evidence suggest have little positive impact, and in any case are a state and local responsibility."

Richard Vedder
Professor of Economics
Ohio University
Policy Advisor, Economics
The Heartland Institute
vedder@ohio.edu
312/377-4000


“President Obama said that his proposed budget will make ‘targeted investments’ that will create jobs. By ‘investments’ he means more government spending.  By ‘targeted’ he means that the government will spend our money to distribute to businesses that the government favors. This is crony capitalism. 

“He ‘invests’ in electric car makers that sell $100,000 vehicles for the rich and are now heading for bankruptcy. His administration is not very good at picking winners; it is very good at picking losers. Bankrupt businesses do not create more jobs, and his higher taxes will slow economic growth.”

Ronald D. Rotunda
The Doy & Dee Henley Chair and Distinguished Professor of Jurisprudence
Chapman University
rrotunda@chapman.edu
312/377-4000


“The president promises that more government spending will boost the economy. That is just more failed Keynesianism – the premise that government spending magically grows the economy. This caricature of Keynes's thinking has been proven false time and again, most spectacularly in the United States by Obama himself. As government grows, the rest of the economy shrinks. Obama's budget is a fine prescription for a recession.”

S.T. Karnick
Director of Research
The Heartland Institute
skarnick@heartland.org
312/377-4000


“Barack Obama's 2014 budget, as with all of his prior budgets, is not serious. The only good thing to say about it is that he has broken the Democrat cone of silence about the need to curb the growth of entitlements.

“But when you see a budget which aims to limit the amount an American can accumulate in retirement accounts, or which aims to federalize the last private part of education in America, namely pre-kindergarten, and fund it by raising tobacco taxes, you know this is an ideological document first and foremost. The suggestion of going to chained CPI for Social Security cost-of-living adjustments is nothing but a smokescreen so he can claim to be offering a balanced approach.

“Yet Obama continues to call for upper-income earners to ‘begin to pay their fair share,’ despite that group carrying the weight for the nation under the most ‘progressive’ tax structure in America's history. He continues to call for a higher minimum wage despite that being a sure recipe to worsen the already disastrous unemployment rates among the youth and among blacks. He calls for more stimulus and fighting climate change despite most of the public realizing that those are both nothing more than government-growing sinkholes for taxpayer money.

“Obama does one particularly clever thing, and one which unfortunately is likely to have some traction with economically illiterate Americans: He argues that his plan is deficit-neutral, as if that makes it OK. Putting aside the fact that liberal plans always end up with more spending and less revenue than forecast, supporters of limited government and liberty must remind Americans that the burden of government is not measured by the deficit, but rather by spending, perhaps most easily measured by federal spending as a share of GDP. Until we get that well below 20 percent, aiming for 15 percent, our country will be neither fiscally sound nor truly free.”

Ross Kaminsky
Senior Fellow, Finance
The Heartland Institute
rossputin@aol.com
312/377-4000


“We live in very Orwellian times, but anything that starts with a ‘t,’ as in trillion, does not deserve – even by Washington standards – to be called a ‘budget.’ It is instead a blueprint for the further destruction of the American Republic.

“What President Obama outlined in the Rose Garden today is simply another example of the ‘never let a good crisis go to waste’ mentality that pervades the constant campaign mode of the Obama administration. Like his predecessor, Franklin Delano Roosevelt, Barack Obama has persistently pushed policies that have deepened and worsened a recession, apparently for political purposes. Instead of ‘tax and spend,’ he now promotes ‘enhanced revenues’ and ‘investment’ – the former code words for raising taxes yet again on the most productive players in our economy, the latter code for paying off interest-group supporters like construction workers and teachers' unions to help ensure voting support for his leftist agenda.

“The president is correct that ‘nothing shrinks deficits faster than a growing economy,’ but he has demonstrated for the last four years that he hasn't a clue how to grow an economy. Whether this results from willful ignorance or malevolent intent remains to be seen, but the results remain the same: a stagnant economy in a country that slouches further and further in the direction of Greece.

“Senate Republican Leader Mitch McConnell has it right when he dismisses the Obama proposal as ‘not a serious plan; for the most part, just another left-wing wish list.’ Fortunately, like the president's last four ‘budget’ proposals, this one is going nowhere in the Congress. 

David L. Applegate
Policy Advisor, Legal Affairs
The Heartland Institute
media@heartland.org
312/377-4000


“We've heard about not adding ‘one dime to the deficit’ before. Even if true this time, what does it do about the trillion dollars (10 trillion dimes) already added after the last such promise?

“Obama and the Democratic Congress and administrative agencies, especially the EPA, need to stop tearing down our infrastructure for generating electricity, and get out of the way of energy producers. They should stop looting industries that produce something useful, like oil and gas, to subsidize wind farms and other ‘green’ projects that go bankrupt as soon as subsidies stop, if not before.”

Jane M. Orient, M.D.
Executive Director
Association of American Physicians and Surgeons
janeorientmd@gmail.com
312/377-4000


"Everyone likes to tout the weak evidence that government preschool boosts poor children, but few people talk about the research that indicates large amounts of out-of-home child care hurts small children and parents. Kids separated from their parents are more insecure and likely to be aggressive. Parents who put their children in out-of-home care lose their parenting skills.

“Although one can argue children whose families will not teach them letters and colors would benefit from any mental enrichment of the type caring families naturally provide, this description does not fit all the children that would be eligible for the president's preschool plan. And it is wrong to tax parents who sacrifice to care for their children to pay for parents who choose not to."

Joy Pullmann
Research Fellow, The Heartland Institute
Managing Editor, School Reform News
jpullmann@heartland.org
312/377-4000


“President Obama's 2014 budget arrived late. Both the Senate and the House, tired of waiting for him to fulfill this constitutional obligation, had created their own budgets. Predictably, the president's budget, and the Senate's, demonstrate Keynesian insanity – insisting on spending more in the face of a nearly $17 trillion national debt, and a deficit that suggests the need to spend less.

“The ‘foolish, across-the-board budget cuts’ Obama deplored in his Rose Garden rant were the result of his failure to heed the Simpson-Bowles Commission and his suggestion to implement the ‘sequestration’ option if the bipartisan commission could not come to agreement. The only thing we know for sure from his first term is that he has learned nothing and thus hobbled the recovery from the 2008 financial crisis.

“The only ‘solutions’ the president offers are higher taxes when the nation needs a steep reduction in taxes to truly stimulate the economy. It worked for John F. Kennedy and it worked for Ronald Reagan.”

Alan Caruba
Founder, The National Anxiety Center
Policy Advisor, The Heartland Institute
acaruba@aol.com
312/377-4000