February 26, 2009

At What Point Do We Begin Using the Phrase "Out of Control"?

Justin Katz

Turning debate into bickering over legislation that would increase departmental budgets by eight percent, Rep. James McGovern (D, MA) offered this irrelevancy:

"The same people who drove the economy into the ditch are now complaining about the size of the tow truck," said Rep. James McGovern, a Democrat from Massachusetts, pointing out the large increase in deficits that President George W. Bush and GOP-controlled Congresses amassed.

I guess responding to a wrong with a wronger makes it right. Reading the Nation section of the newspaper is beginning to feel like watching teenagers run up the family's credit cards while the parents recover from a peculiar illness that had caused financial delusions.

On the healthcare side, the change in the flow of money couldn't be more dramatically drawn:

Obama's budget proposal would effectively raise income taxes and curb tax deductions on couples making more than $250,000 a year, beginning in 2011. By not extending all of former President George W. Bush's tax cuts, Obama would allow the marginal rate on household incomes above $250,000 to rise from 35 percent to 39.6 percent, said an administration official.

To raise more money, Obama wants to reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the nearly 40 cents they could claim otherwise.

That proposal is deeply controversial, particularly with nonprofit institutions that depend on wealthy donors and with lawmakers representing high-tax states such as New York and New Jersey.

The plan also contains a contentious proposal to raise hundreds of billions of dollars by auctioning off permits to exceed carbon emissions caps Obama wants to impose on users of fossil fuels to address global warming. Some of the revenue from the pollution permits would be used to extend the Making Work Pay tax credit of $400 for individuals and $800 for couples beyond 2010 as provided in the just-passed economic stimulus bill.

About half of what officials characterized as a $634 billion "down payment" toward healthcare coverage for every American would come from cuts in Medicare. That is sure to incite battles with doctors, hospitals, health insurance companies and drug manufacturers.

Some of the Medicare savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated. Other proposals include charging upper-income beneficiaries a higher premium for Medicare’s prescription drug coverage.

Even after all those difficult choices, Obama’s budget would still leave the federal government heavily in the red, with deficits remaining above $500 billion over the second half of the decade — even after a series of wrenching policy choices.

Running with the just-make-it-so liberal fantasy that policy can simply be dictated to society without consequence, the current regime is going to stultify economic growth and foster dependence. Well, America, you asked for change, and you're going to get it; let's hope we all survive the experience.