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Subscribe to RSSPublished at 5 a.m. ET: Less than one month into his second term, President Barack Obama looks to complete the outlines of an ambitious agenda in his State of the Union address Tuesday night.
In his inaugural speech, the president telegraphed several initiatives he wants Congress to pursue and pass this year: gun control legislation, a bill to create a legalization process for many of the nation’s illegal immigrants, subsidies for renewable energy technologies and legislation to respond to climate change.
Obama will likely return to those topics Tuesday night, but the White House has signaled that this speech will focus more on the themes that dominated the past four years -- jobs and the economy -- with new initiatives aimed at improving the prospects of growth for both, and a particular emphasis on the middle class.
But any new policies or programs will have a cost to both present and future taxpayers, and it will take some time to figure out that cost because the president hasn’t yet presented his budget proposal to Congress. And when he does, the ongoing standoff between Republicans and Democrats over everything from how to continue funding the government to looming spending cuts still leaves plenty of uncertainty about any fiscal policy in Washington.
President Obama is set to focus on jobs and the economy during Tuesday's State of the Union. NBC's Peter Alexander reports.
Due a week ago, but not likely to appear until sometime next month, the president’s budget proposal is the detailed and lengthy (last year’s was 256 pages long) blueprint in which a president gives Congress and taxpayers all the specifics -- how much each new initiative will cost and what tax proposals he is offering to help to pay for his programs.
The budget document is the president’s attempt to direct spending policy for the coming fiscal year -- the one that starts on Oct. 1 -- and for the ten years beyond that.
This year there’s an air of unreality about the budget compared to, for instance, 2009 when the president’s Democratic allies controlled both the House and the Senate. Exactly four years ago, when Obama proposed to collect $646 billion in new revenues from auctioning off greenhouse gas emission allowances, there was a reasonable expectation that the proposal would become law and that the $646 billion would flow into the Treasury.
When Obama does deliver his budget proposal next month, the fiscal path forward will remain in an extraordinarily makeshift and unpredictable state.
Budget 'harder to predict' than ever
Veteran budget analyst Stan Collender wrote this week that even former congressional Budget Committee staffers who have spent their careers assessing budgets find that “the current situation is as complex, hard to read, and even harder to predict than any they’ve ever seen.”
The federal government is now operating on a six-month continuing resolution which keeps discretionary spending for departments and agencies at the prior year’s levels.
Mandatory spending for Social Security, Medicare, Medicaid and federal employee retirement benefits is driven by demographics, enrollment, and the cost of medical procedures. It isn’t as controllable by Congress or the president.
The continuing resolution expires on March 27, leaving Obama and Congress only a few weeks to figure out what to do next. Another stopgap continuing resolution seems quite possible.
In addition, the Budget Control Act requires $85 billion in spending cuts to begin on March 1.
Illustrating just how unreal the current fiscal situation is, Defense Secretary Leon Panetta said in his farewell address last week at Georgetown University that if Congress passes another continuing resolution and it allows the spending cuts required by the Budget Control Act to take effect, then his department “will have to abruptly absorb in a period of about six months” $43 billion in spending cuts (known as the sequester). This will be on top of what Panetta thinks are inadequate spending levels in the continuing resolution -- what he described as “a $35 billion shortfall in operating funds for our active forces.”
Kevin Lamarque / REUTERS
President Barack Obama speaks from the briefing room of the White House in Washington Feb. 5, 2013.
Panetta explained that the Pentagon has been spending money at a relatively robust rate level so far this fiscal year. “We assumed, silly us, that we would get a 2013 appropriation, what we requested,” he said. “And so we're operating on this hope that 2013 appropriations bill will be passed. It hasn't been passed.” And yet the Defense Department has been spending money as if it would be passed.
With both the sequester and another continuing resolution looking possible, Panetta is now facing, and leaving his successor with, “a serious disruption in defense programs and a sharp decline in our military readiness.”
Reminding his audience how big an employer the Department of Defense is and how large an economic effect it has, Panetta said, “If sequester happens, let me tell you some of the results. We will furlough as many as 800,000 DOD civilians around the country for up to 22 days. They could face a 20 percent cut in their salary.”
Other departments and agencies would need to take similar steps.
Given such a crisis atmosphere, one could see why Obama’s proposals for new programs and new spending might get overshadowed and might stand little chance of being adopted.
Disaster spending
And yet Obama and members of Congress have been extremely lucky in one sense. The last few years has been a good time to be in charge of fiscal policy, thanks to ultra-low interest rates which mean an ultra-low cost of financing the federal government’s borrowing.
That will end in the next several years. The Congressional Budget Office, in its annual budget forecast last week, projected that what the federal government must spend on net interest payments will more than double in the next five years and will nearly quadruple by the end of the 10-year budget forecasting period. Instead of spending six cents of every dollar to pay interest on the debt, the government will be spending 14 cents of every dollar on interest payments in 2023.
By 2020 the government will be spending more on interest than it will spend on national defense.
In the short term, the good news for Obama is that the economy is recovering and with that recovery has come a surge in federal tax revenues, which are up 12 percent in the first four months of Fiscal Year 2013. Individual income tax revenues are up by 16 percent so far in FY2013.
Keep in mind that revenue surge has come even before the full impact of the $700 billion tax increase that Obama signed into law on Jan. 2. The increased revenues from that tax increase will show up in withholding from paychecks in 2013 and also will be seen in the income tax payments Americans must make when they file their tax returns in April 2014.
Given the need Obama sees for even more revenues, don’t be surprised if you see some of the very same ideas in the State of the Union and the budget blueprint that he proposed back in 2009 in his very first budget proposal, such as taxing a form of investment income called “carried interest” as if it were ordinary income and eliminating of certain tax preferences for oil and gas firms.
But while some things might be the same as in 2009, in one part of the budget one thing is quite different: in Obama’s first budget proposal in 2009 he and his number-crunchers projected that in the current fiscal year, FY 2013, the federal government would need to spend $20 billion on disaster relief. That disaster spending prediction will turn out to be far short of reality: Obama has already signed into a law a disaster relief bill for Hurricane Sandy that will cost $50 billion -- and the hurricane season does not being until June 1.
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Why is global warming an important issue for the US in the eye's of the UN but they never go after China the worse polluter on the planet? I believe there is global warming but not to the extent that those like the UN and Al gore tout. They both are whoring themselves on the issue.
Hey Tom, do us all a favor and SHUT UP.
You were not worried about this last October, so SHUT UP.
The question should be how are "we" going to pay back China for this?
sell them companies cheap and our land cheap have you not been reading the news paper?
We will not have to pay them back we are going to sell them America peace by peace so this way they don't have to start a war with us to get paid back.
China currently only holds 8% of the US debt.
Only 8%...Can you honestly tell me you typed that with a straight face.
8% = $1 out of every $12.50 and when you add in interest it is closer to $1 out of every $10.00 (10%)
@ Golfsleft
14 % now I believe..
I suppose this will make you feel better....
"Meanwhile, Japan has been steadily adding to its Treasury holdings. It now owns $1.12 trillion, up 24% from a year ago"
China & Japan = about 14%.
"Obama's plan...how will he pay?"
He doesn't pay....should say HOW WILL THE AMERICAN TAXPAYER PAY??
How will HE Pay for it? HE isn't paying for it.
WE ARE
are democrat apologists the problem? you fall for the rope a dope, elect them, democrat majority in the senate since 2007, and then repeat the talking points which say it's the other guys fault. are you kidding me? maybe it's time for voters to inform themselves and hold the people they vote for accountable not to give them stuff but to solve problems like deficit/debt/entitlement solvency etc etc.
ANY reality puts Obama in Question....
People keep saying that we just need to tax the rich even more, even with the new tax rate hikes as well as the coming taxes from Obama care for this group. If you look at the chart below from the CBO, you will see that the share of taxes the rich pay is actually been going up pretty significantly over the last couple decades. It is time to cut spending. Nobody has enough money to pay for all of this.
After-Tax Income Shares for All Households, by Household Income Category, 1979-2007
Year
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Highest Quintile
All Quintiles
Top 10%
Top 5%
Top 1%
Share of Income (Percent)
After-Tax Income
1979
6.8
12.3
16.5
22.3
42.4
100.0
27.6
18.1
7.5
1980
6.8
12.1
16.5
22.3
42.8
100.0
27.9
18.4
7.7
1981
6.5
12.0
16.5
22.3
43.3
100.0
28.4
18.9
8.0
1982
6.0
11.5
16.3
22.3
44.6
100.0
29.4
19.7
8.7
1983
5.5
11.2
16.1
22.3
45.7
100.0
30.5
20.7
9.4
1984
5.7
11.1
16.0
22.2
46.0
100.0
30.9
21.2
9.9
1985
5.5
10.9
15.8
22.0
46.7
100.0
31.7
22.0
10.6
1986
5.2
10.3
15.3
21.3
48.7
100.0
34.3
24.8
13.2
1987
5.1
10.9
16.1
22.5
46.3
100.0
31.1
21.3
9.9
1988
5.0
10.7
15.6
21.9
47.9
100.0
33.1
23.5
12.0
1989
5.1
10.8
15.7
21.9
47.6
100.0
32.7
23.0
11.3
1990
5.3
10.8
15.8
21.9
47.3
100.0
32.3
22.6
11.0
1991
5.5
10.9
16.2
22.1
46.5
100.0
31.5
21.7
10.0
1992
5.2
10.7
15.9
21.9
47.4
100.0
32.5
22.7
10.9
1993
5.3
10.9
16.0
22.1
46.8
100.0
31.7
21.8
10.0
1994
5.3
11.0
16.1
22.2
46.5
100.0
31.4
21.6
10.0
1995
5.5
10.9
15.9
21.9
46.8
100.0
31.9
22.1
10.3
1996
5.3
10.6
15.6
21.6
48.0
100.0
33.1
23.3
11.4
1997
5.2
10.2
15.3
21.1
49.1
100.0
34.4
24.6
12.6
1998
5.3
10.1
15.1
20.8
49.6
100.0
35.1
25.4
13.5
1999
5.2
10.0
14.9
20.5
50.2
100.0
36.0
26.5
14.4
2000
4.9
9.7
14.7
20.2
51.3
100.0
37.1
27.5
15.5
2001
5.1
10.3
15.2
21.5
48.8
100.0
34.1
24.4
12.6
2002
5.2
10.5
15.5
21.8
48.0
100.0
33.1
23.4
11.4
2003
5.0
10.3
15.4
21.6
48.8
100.0
33.9
24.1
12.2
2004
4.9
10.0
14.9
21.2
50.1
100.0
35.5
25.9
14.0
2005
4.8
9.6
14.5
20.5
51.5
100.0
37.3
27.7
15.6
2006
4.7
9.4
14.3
20.3
52.2
100.0
38.1
28.5
16.3
2007
4.9
9.4
14.1
20.0
52.5
100.0
38.7
29.3
17.1
Source: Congressional Budget Office.
Notes: Average tax rates are calculated by dividing taxes by comprehensive household income.
Comprehensive household income equals pretax cash income plus income from other sources. Pretax cash income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes and the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employees' contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance).
Income categories are defined by ranking all people by their comprehensive household income adjusted for household size—that is, divided by the square root of the household’s size. (A household consists of the people who share a housing unit, regardless of their relationships.) Quintiles, or fifths, contain equal numbers of people. Households with negative income (business or investment losses larger than other income) are excluded from the lowest income category but are included in totals.
Individual income taxes are attributed directly to households paying those taxes. Social insurance, or payroll, taxes are attributed to households paying those taxes directly or paying them indirectly through their employers. Corporate income taxes are attributed to households according to their share of capital income. Federal excise taxes are attributed to them according to their consumption of the taxed good or service.
Gee, is the brown nosing Media is finally agreeing with us,,that Obama is not dealing with Reality?? We all knew that, so I guess it has finally come to the point where the Media realizes that as well...Except for the Lemmings, we've been saying that for years.....Now for some more truth and reality go to Examiner.com and read the Real and true story about how the Demoncrat Policies going back to Carter and Clinton and Obama himself caused the financial crash of America...Now that is reality,,the story was published back in December but the main stream Media refused to print it..seems it had too much truth in it....and they can't have that appearing in their publications it would ruin their reputation...
Mr Obama is focused on gun rights, gay rights, and illegal immigration instead of our debt, the stagnant economy, and the unemployment rate stuck at about 8%. Oh well, four more years of this administration of misfits.
Obama can have all the new big government programs he wants as long as we have a balanced budget and he takes the money from existing government pork programs.
Nancy Pelosi actually said the government didn't have spending problem yesterday.GEEEEEEEEEEZ!
What do you expect from a woman? My ex wife did not think we had one either that's why she is my ex now..
The Government and our Country have a House Minority Leader problem...
Don't any of you think that clean energy will create new jobs?
Not enough full time permanent jobs to replace those lost to EPA regs
@ golfsleft
Yes and no, I think there is a long long time of study to go on before they set out a mission for clean energy again.
Look what happen to all the money Obama gave out they all failed so far.
One CEO walked away with 51 million of your tax money when it failed. Received $150 million from Obama. (a friend of Obama's too)
The battery company that received tax money now sold to China.
And a few more bla bla.
"..they all failed.."
Are you claiming no solar or wind power companies are still up and running?
@golfsleft
The companies that recieved government funds are all gone out of business now and one sold to China. So to your question YES and NO.
Companies that did not recieve funds are still out there but very small and few to have clean energy a chance.
Not sure if you heard the wind farm land is now shut down due to the cost to maintain them..
most wind farms are owned by foreign companies the same with solar. do some research and you will wonder why foreign companies invest in our plight. It's not for our good, but what the hell sell to the lowest bidder
clean energy cuts into oil profits. Yet we give billions away to foreign country's that want to kill us. Have a natural disaster in a foreign land we're quick to send them money, but, have a tornado hit in Alabama government will give you a no interest LOAN! How many millionaires are sitting pretty in Washington, with there paid health care by you and me, Yet omitted themselves from Obamacare. how many of you would have a job if you didn't do your job.
Hard times when the Liberal Press questions the President's ability to deal with our Economy...
Now if they would only question his ability to deal with every other aspect of his Presidency, except Vacations.
I think he understands Vacations.
First off, I voted for him...twice.
The spending and the debt have to be dealt with. We are so "up side down" in so many ways that a massive chunk of our money goes just to service the debt. We have to find amongst ourselves leaders who will represent us...and NOT be on the take.
It sounds so easy, yet again and again the power of money coupled with greed rules the day - and too many of us.
Look Obama didn't create the mess, but the man is clueless on how to run the economy, hes more interested in social justice than figuring out that we can't go on spending our way out of this. Why must we settle for lousy Presidents every four years and keep re electing these politicans who have ridden the gravy train for far too long.
Obama is not helping it either. If anything he has hurt it more, the knife was in but he drove it in the rest of the way....
obama watched zeitgeist and believes money is made by debt so the more debt the more money
Obama, had an unlimited expense account, and he exceeded it.
Not yet. He still has your 401k and IRAs. Just wait until he nationalizes them and gives you 2.5% a year back at retirement.
Where is Fiesty to defend Barry?
Feisty went to crap, and the hogs ate her-him?
arizona
ha ha haven't heard that one in a very long time lol
Hopefully he will take some thoughts/ideas from pediatric neurologist Dr. Benjamin Carson who spoke before Obama, Congress and others at the national prayer breakfast on February 7, 2013. Carson made excellent points about our health care dilemma, the nations debt and other issues. Listen to this 26 minute speech here:
http://www.theblaze.com/stories/2013/02/07/prayer-breakfast-speaker-praises-jesus-gets-political-calls-political-correctness-dangerous-hammers-fiscal-irresponsibility/
Obama and the Liberals fit the definition of insanity: Doing the same the over and over again expecting a different result. His slogan was "Hope and Change" the first term - all we saw was change and not for the better. This time around it was "Forward" - all we will see is this country moving forward into bankruptcy at an ever increasing pace.
Well for the Hope and Change
We hoped and it changed but he did not say the change was good did he?
as for Forward
He did not give you directions so Forward from nothing is no place...
Tune in Tuesday night and watch the sock monkey walk on water. The fools who follow the town idiot get in line for more obama bucks. No jobs, no future
EASY ANSWER
He will raise TAXES aka revenues ON EVERY AMERICAN WORKER.
If you work your check is smaller than it was last year
NO DENY that
If you work your check will get even smaller this and next year.
Time to tell President Obama we know how to spend our money better than him.
That's correct. Paul Krugman, Obama's economist guru said :
"Eventually we do have a problem. That the population is getting older, health care costs are rising…there is this question of how we’re going to pay for the programs. The year 2025, the year 2030, something is going to have to give…. …. We’re going to need more revenue…Surely it will require some sort of middle class taxes as well.. We won’t be able to pay for the kind of government the society will want without some increase in taxes… on the middle class, maybe a value added tax…And we’re also going to have to make decisions about health care, doc pay for health care that has no demonstrated medical benefits . So the snarky version…which I shouldn’t even say because it will get me in trouble is death panels and sales taxes is how we do this."
http://www.breitbart.com/Big-Government/2013/02/04/Krugman-Death-panels-and-sales-taxes-is-how-we-do-this
If this were the 1800s Obama and congress would have been Tared, featherd and run out of town on a rail
If this was 1800 Obama would not be in Office. Back then he could not have bought the votes needed for him to get elected.
For those of you who watched Meet The Press and/or saw the Pelosi interview, yesterday marked a turning point for how America views the Democratic party. I don't know what happened to them in their lives or if they all suffer from paranoid delusional syndrome, but not to say the Federal Government does not have a spending problem would leave me to believe they are either secretely trying to destroy this country or they are all alien pod people. Its real real simple Obama and your minions, you got your $650 billion tax increase, now go out and reform entitlements and cut spending. You are not getting another $%^&ing dime in tax revenue so lets get started with dealing with our fiscal realities.
obama does have ties to a.c.o.r.n. whose mission is to bankrupt america to restart as a socialist country. the dems recieve monies from the communist and socialist parties and what are their goals?
Obama has already wasted hundreds of millions of dollars of tax payers money, funding useless energy conservation schemes. Obama's cut was millions in campaign contributions from the owners of the now bankrupt companies.
The millions already wasted on climate research have accomplished absolutely nothing except to put more money in the pockets of liberal research deadbeats, who in turn contribute more millions to the Obama campaign funds.
Obama continues to pledge more tax dollars for education, while when working people were losing their jobs the last four years, educators were getting their routine annual raises. Liberals do not use money to educate the children; they use it to pad the pockets of government employees who are employed in education.
And, as usual, Obama's solutions for job losses are expanding government by adding more useless jobs for government employees.
The next four years are going to be a national disaster, leading to twenty years to recover from them.
Congress spends. Not the pres.
Learn how the government works.
Herron
And Congress has the power to tax too, not President Obama. And yet, who is campaigning to invest in America with taxpayer dollars?
Look who is asking for the wealthy to pay "just a little bit more" again; like in Obamacare, the fiscal cliff resolution.