Obama Budget: More Debt, More Spending, More of the Same

 

IBDEditorials.com

President Obama delivers remarks at the Department of Homeland Security on his FY2016 budget proposal on Monday in Washington. AP

Fiscal Policy: President Reagan's annual budgets and their spending cuts were always derided as "DOA: dead on arrival." President Obama's latest spending plan may be the first to be stamped "DBA: dead before arrival."

But that's good news, because his $4 trillion blueprint, the broad details of which were revealed during his State of the Union address, isn't so much a spending and tax plan as a grandiose political/social statement about where this president wants to take the nation: even further left.

The thinking behind this wish list of new taxes and spending is that government — not private businesses, entrepreneurs, workers and employers — is the primary springboard of growth. It reflects the philosophy of a president who tells America's great companies and small-business men and women: "You didn't build that."

The plan would lift spending by $74 billion over the spending caps the president himself invented back in 2011. To entice Republicans to go along, he's offering $35 billion more for the military.

Over five years his budget would spend almost $350 billion over the self-imposed caps — which are the main reason the deficit has been falling in recent years.

The era of big government would be back with a vengeance. Obama wants a preposterous 7% spending hike this year for government agencies — with more nanny-state money for schools, early-childhood education, roads and bridges, child care, green energy and corporate welfare for manufacturers.

He calls this bloat "middle-class economics." But when was the last time American families who'll have to pay for all this had a 7% pay raise? The debt would rise an additional $5 trillion over the next decade and would never get within even a half-trillion of balance.

Obama's tax scheme would raise the capital gains and dividend taxes to 28% and impose new taxes on inheritances. Mr. President, this rise in investment taxes will mean less investment, not more.

Entitlement spending would be left on autopilot and nearly double by 2016. A $478 billion infrastructure fund would be created to help finance projects such as California's $68 billion high-speed rail project to nowhere. But of course Obama opposes privately funded infrastructure such as the Keystone XL pipeline.

To fund the orgy of public works projects, he wants yet another new tax — a 14% levy imposed on profits parked outside the country. This won't raise much money.

But it will ensure that most multinationals are foreign-owned, not American. Under the president's plan, a firm in Ireland or Germany or China would pay roughly 14% less tax on profits on overseas operations. This is a head start program for countries we compete against.

Everything voters said in November that they want less of, this budget would provide more. Sadly, Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said Sunday that the plan "will have broad and deep support from Democrats."

The broad strategy here is to take $500 billion from the wealthiest Americans and redistribute it to everyone else. The government already spends $1 trillion a year on welfare programs that are supposed to do that.

But income redistribution is not an economic strategy. Republicans should counter with a budget that focuses on growth, jobs and doing what every family in America must do: balance its books.