Obama, Tax-Cutting Friend of Working Americans

I'm trying to hold in one of those Howard Dean screams...aaaarrrgh! Sorry, couldn't help myself.

In the past week, the White House has been drawing a picture of a great battle to save the "middle class," in which Barack Obama the tax cutter is fighting hypocritical Republicans who want to raise taxes on "working Americans," so their millionaire and billionaire friends can keep the Dom Perignon flowing.

Yes, Obama, the biggest spender in the history of the planet, the guy who never met a Keynesian stimulus he didn't like, is peddling himself as the responsible supply side adult in the room. It is patently obvious that what he's really doing, however, is flogging the American Jobs Act (AJA) that he proposed in September. It's more of the "pass this bill, pass this bill now" rigmarole.

The $447 billion in the American Jobs Act was roughly half tax cuts ($240 billion, or $1,500 times 160 million Americans). The rest was more stimulus spending on Obama's familiar shopping list: "infrastructure spending,"; "additional funding to protect the jobs of teachers, police officers, and firefighters"; "creating additional regulations on businesses who discriminate against hiring those who are long-term unemployed." (summary on Wikipedia).

The Act was dead on arrival; not even Democrats wanted to go on record as falling for more stimulus spending claptrap, so recently Obama has zipped his lips about spending. Even the "American Jobs Act Overview" on WhiteHouse.gov has dropped references to spending, listing only tax cuts and "extending business expensing into 2012." Instead he bangs the payroll tax cut drum day and night and demonizes anyone who opposes him. A typical sample on the White House blog entry:

And Thursday night, after weeks of saying "no" to just about everything, Republicans in Congress chose to allow taxes to increase on nearly 160 million hardworking Americans because they refused to ask a few hundred thousand millionaires and billionaires to pay their fair share. 

The White House loves graphics that simplify the message to the electorate. The latest gimmick is a countdown clock, with ticking seconds, that now appears on every page of Whitehouse.gov with the warning: "If Congress doesn't act, middle class taxes increase in 25 Days, etc."

According to the blog post, which bears the hypocrisy-filled title, "Republican Hypocrisy on the Payroll Tax Cut": "we all know it's a bad idea to raise taxes on 160 million working Americans."

"We all know"? Wait, wasn't Obama against extending the "Bush tax cuts" -- before he agreed to extend them under pressure? Haven't we just been through months of liberals pillorying Republican intransigence on tax hikes?

An email from David Plouffe, continues the supply side rhetoric: "This calculator illustrates for you what nearly every independent economist has said: letting this tax cut expire will be a blow to the economy."

Obama elaborated in Monday's press briefing:

Forgive me a little bit of confusion when I hear folks insisting that tax cuts be paid for...We all recognize that we've got to make progress on the deficit and I'm willing to work with Republicans to extend the tax cut in a responsible way, but what I'm not willing to do is to pay for the extension in a way that actually hurts the economy. As Americans are well aware, this summer I signed into law nearly one trillion dollars in cuts, with another trillion dollars of cuts in the pipeline, and it would be irresponsible to now make additional deep cuts in areas like education, or innovation or our basic safety net...we're not going to do that. Nor are going to undo the budget agreement that I signed just a few short months ago.

Trillion dollar cuts? What in the world is he talking about?  What budget agreement? Didn't we just go through a breakdown in the debt ceiling talks and a failure of the Super Committee? Aren't we facing a looming $1.2 trillion in mandatory cuts that the Washington weasels will find a way to make un-mandatory?

What Obama is saying is that Republicans are welcome to cut $240 billion from the budget, say from Defense, or they can pay for it in the ways specified in the AJA: "clos[ing] corporate tax loopholes" and "ask[ing] the wealthiest Americans to pay their fair share." There's no way however that Obama's going to bend on the spending in the bill that benefits his union campaign contributors.

On Monday, Obama also mentioned another part of the AJA, the extension of unemployment benefits. If Congress fails to act, Obama warns:

Taking that money out of the economy now would do extraordinary harm to the economy, and if you believe that government should take money out of people's pockets I hope that members of Congress realize that it's even worse when you take it out of the pockets of people who are unemployed...Independent economists...agree that if we don't extend the payroll tax cuts and unemployment insurance, it will hurt our economy.

Obama is repeating Nancy Pelosi's idiotic argument that paying people not to work is the best possible economic stimulus. He picks up conservative language about government taking money out of taxpayers pockets and turns it upside down. Cutting off unemployment benefits (which come out of the pockets of taxpayers) now equals taking money out of the pockets of the unemployed. Keeping track of which pocket the money is in is like watching a game of three-card Monte.

The ticking clock graphic creates a sense of urgency, which dovetails nicely with Obama's "We Can't Wait" initiative: "But [cutting payroll taxes] will only happen if lawmakers end their dithering and get to work. We can't wait until taxes go up for Congress to do the right thing for the American people."

It's not the first time that the Executive Branch has tried to usurp the powers of the Legislature, but someone should tell the White House that you're not supposed to brag about your chicanery.

Some have argued that we shouldn't cut the payroll tax because it funds Social Security. This argument would hold more water if payroll taxes went into a lockbox, rather than directly into the General Fund. I'll stick with Milton Friedman, who said,

I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The...big problem is not taxes, the big problem is spending. The question is, "How do you hold down government spending?"