The Congressional Budget Office (CBO) dealt the Obama administration yet another reality check when scrutinizing the President’s FY2015 budget proposal. The Budget offered by the President does nothing more than increases our debt and deficits without any substantive reforms to the main drivers of spending.
In what has turned into a regular occurrence, the President will offer a policy with populist appeal — such as increasing the minimum wage – only to have the negative impacts of the proposal exposed by non-partisan analysis from those outside the West Wing.
CBO’s latest report on the President’s budget points out the mathematical reality: This is not a serious attempt to fix the nation’s finances.
Remember when the CBO was the Darling of the Left because they fed them garbage about ObamaCare and got garbage out and they were all happy…Well, I bet this will unfriend them…:)
“CBO estimates that the federal deficit would total $492 billion in 2014 and that the cumulative deficit over the 2015-2024 period would amount to $7.6 trillion.”
“Federal debt held by the public would increase from $12.8 trillion, or 74 percent of GDP, at the end of 2014 to $19.9 trillion at the end of 2024.” Overall debt in the country will soon approach $20 trillion, adding to our already crushing debt burden. This will continue to exacerbate adverse effects on the economy. According to a CBO report published earlier this year, economic growth is projected to slow to 2 percent by 2017.
“All of the proposed policies affecting Medicare other than freezing payment rates for physicians would reduce outlays by a total of $373 billion over 10 years.” NOTE: Medicare and Social Security have a combined unfunded liability of $30.3 trillion according to the National Center for Policy Analysis.
“Over the 2015-2024 period, the President’s proposals other than those involving the reclassification of transportation programs and the phasing down of funding for overseas contingency operations would boost spending for discretionary programs by $433 billion.
Bottom Line: The President’s budget fails the most basic test in trying to get our country back on a fiscally sustainable path. He increases spending across his budget while offering no real reforms to the real drivers of the country’s debt i.e. Medicare, Medicaid, and Social Security.
Instead of even starting a conversation about the country’s spending problems the President makes things worse with this irresponsible budget – a budget that will leave American taxpayers drowning in red ink for years to come. (AFP)
“If anyone was hoping for a serious budget that did more than increase Washington spending and find new ways to tax job creators, it sure sounds like they’ll be disappointed,” said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R., Ky.).(WSJ)
Like Democrats know how do anything else.
As for “bi-partisan compromise”? Well, the Democrats put out some bait. Then they said you have to raise taxes to take the bait. If you don’t take the bait we’ll bash you for “doing nothing” and if you do we’ll bash you for raising taxes. We win!
Now that’s “Bi-Partisan” 🙂
The following is a statement from Brian H. Graff, Executive Director/CEO of the American Society of Pension Professionals & Actuaries (ASPPA) in response to the proposed fiscal year 2015 budget President Barack Obama released today:
“Unfortunately, this year’s budget proposal includes the same wrong-headed attacks on employer-sponsored retirement plans as last year. The double tax on contributions to 401(k) plans and the misguided $3 million cap on the value of retirement benefits do not close any loopholes or curb any abuse. They punish small business owners who sponsor retirement plans for themselves and their employees. It is disappointing that an administration that claims to be concerned about giving more American workers access to retirement savings would discourage small business owners from maintaining the 401(k) plans they have now.
Under the “double taxation” budget proposal, small business owners earning more than $250,000 would have to pay tax on contributions in the year the contributions are made, and then pay tax at the full rate when contributions are distributed at retirement. This amounts to a penalty for saving through a 401(k) plan. Who could blame a small business owner for thinking that if the government is going to penalize them for saving in a retirement plan, maybe they should not have that plan?
In addition, if a small business owner has saved $3 million in his or her 401(k) account, or has a pension from another plan and a modest amount in their 401(k) or IRA, they won’t be allowed to save any more. Without any further incentive to keep the plan, many small business owners will now either shut down the plan or reduce contributions for workers. This means that employees of small businesses will now lose out not only on the opportunity to save at work, but also on contributions the owner would have made on their behalf to pass nondiscrimination rules.
The proposed retirement savings cap in the president’s budget is not closing a loophole and is not correcting some perceived abuse of the rules. There are already caps on contributions and a cap on the pay that can be used to calculate benefits. This proposed cap would basically punish savers for starting to save for retirement when they are young or investing “too successfully.” EBRI estimates that even at current low interest rates, 1 in 10 current 401(k) participants will likely hit the cap if they continue to save in a 401(k) plan until retirement. Since the cap shrinks as interest rates increase, while account balances will grow faster, the higher interest rates climb, the more savers will end up being affected by the cap.
We think it is grossly unfair that this proposal would limit a small business owner to retirement benefits that are nowhere near as valuable as executives’ at large corporations. Small business can’t use the nonqualified deferred compensation arrangements that provide millions – even billions – of dollars in retirement benefits to big corporate executives. Every time retirement plan limits are cut, the corporate CEOs get more nonqualified retirement benefits. It’s the small business owners and their employees who lose out, and that just isn’t fair.
President Obama’s own pension, based on reasonable actuarial assumptions, is worth at least $5 million. That’s 40% more than the small business retirement savings cap permitted under the president’s budget. Is the president saying his own pension is a loophole too? It’s simply wrong to attack small business owners who have responsibly maintained retirement plans for themselves and their workers.”