Obama By The Numbers
If you’re like most Americans, you’ve spent the past few days either vilifying or cheerleading Obama’s tax deal with Republicans. My advice: Stop. It’s time to assess where we are –by the numbers. This isn’t about compromise; it’s about money.
President Obama has proposed a $3.83 trillion budget for fiscal year 2011 while our expected revenue is only 2.57 trillion, leaving us with a $1.27 trillion shortfall. This projected shortfall, coupled with an unemployment rate of 9.8%, has prompted those on the right to goad the President to extend the Bush tax cuts and those on the Left to encourage him to take bold action to aid the country’s unemployed.
On Monday, the President reached a deal on both counts.
The total cost of the negotiated compromise bill is $900 billion, only $53 billion of which goes toward extending unemployment benefits. 458 billion goes to extend the Bush tax cuts (75 billion of which is for high earners). Under the proposed deal, millionaires and billionaires will receive a tax cut of at least $104,000 each year for the next two years. The Social Security tax break is an additional $120 billion, $40 billion for tax credits and an estate tax break – which, according to the IRS, only affects about two percent of estates – is $88 billion. The estate tax cut raises the exemption from $1 million to $5 million dollars. Included in the deal are also tax cuts for small businesses, the cost of which has not yet been determined.
What’s not in the bill? Zero dollars for those who’ve been unemployed for 99 weeks or more – the 99ers as they’ve come to be known. Zero dollars to community colleges for re-education of the unemployed or for state governments to maintain teachers. If you wonder why I’ve included teachers, consider the fact that Chinese students outscored all students in the recent standardized Program for International Student Assessment (PISA) test. The Chinese students scored first among all countries tested while American students ranked 23rd. Again, numbers.
Now, the White House has adopted the phrase “new stimulus” to describe their compromise and according to economist Paul Krugman, the deal may reduce the unemployment rate by 0.2 to 0.6 percentage points. A few billion dollars for a few thousand jobs? Your President, your call.
Numbers tell a story. However, this is not about just current numbers, but future numbers as well. It’s complicated. The tax cuts were only extended for two years, but with unemployment unlikely to drop below 7% in even the best of scenarios, will President Obama raise taxes before his bid for re-election in 2012? Unlikely.
And if we’re adding another $900 billion to the deficit now, who will pay for the baby boomers who will soon begin retiring at a rate of 1000 per day with even less in their 401(k) thanks to sheisty bankers and Wall Street speculators? Will we substantially raise the retirement age of Generation Xers? Will we be forced to raise the retirement age to 70, disproportionately affecting the African American community, and robbing African American men who only have a life expectancy of 69.7? These are the numbers. These are the considerations we should be making now.
Before you argue with anyone in the upcoming days about President Obama’s policies, be sure you have the numbers at hand which gave rise to your convictions. If you don’t, or if you came to your conclusion before reviewing the deal and how it would affect you – then you’re operating purely off emotion, not fact. And this debate isn’t about how you “feel” or what you “believe”, it’s about who gets what percentage of the overall tax pie, who gets left out and who fills the doughnut hole when the money runs out (which it inevitably will). But don’t blame me, blame the numbers.
Yvette Carnell is a former Capitol Hill Staffer turned political blogger. She currently publishes two blogs, Spatterblog.com and GoGirlGuide.com.