Market Mover Thursday: Team Obama Budget Presser…Healthcare funding via new additional tax increases in 2011….
Uh oh. For a bunch of people who like to read about FDR, they seem to be repeating some well known policy decisions that increased the severity and duration of the Great Depression here, ie Smoot-Hawley talk tariffs and tax increases on sources of production….our previous posts here and here
The Obama administration will announce a 10-year, $634 billion reserve fund Thursday aimed at expanding health care coverage – and will pay for half the plan with a new tax hike on wealthy Americans that surprised health care advocates and angered Republicans.
This is NOT the rollback of the Bush tax cuts alone, this is a NEW tax increase to be effective concurrently with the expiration of the Bush tax cuts in 2011…a double whammy, the one-two punch….IMO a bad idea…this is exactly what happened before, they raised taxes before the recession was over and made a Depression…can they be this obtuse? Is it deliberate? Seriously!
Under current law, high earners who are in the 35 percent tax bracket can take deductions at that rate. Under Obama’s plan, they would be capped at 28 percent – meaning instead of getting $3,500 back from $10,000 in mortgage interest or other deductions, these taxpayers would get $2,800. The plan would phase in during fiscal year 2011, just as Obama plans to let the Bush tax cuts expire.
OMB chief Peter Orszag is to announce the plan while outlining Obama’s budget in a press conference Thursday.
8 ‘Goals’ for Healthcare Reform:
Ahead of the release of his budget Thursday, Obama has endorsed eight guiding principles for health reform, the White House officials said on the conference call. They stressed that they intend to work with lawmakers and other stakeholders on how to accomplish the goals, but the principles will lay down a marker for any congressional plan.
Other goals include maintaining choice of insurance and doctors, ensuring affordable coverage, protecting Americans financial health, investing in prevention and wellness, improving patient safety and quality of care and is fiscally responsible, sustainable and portable.
So how is the initiative funded on an ongoing basis? Dunno. He seems to expect to recoup itemizations people get now, but if they keep taxing the producers to death their income will dry up no? Yes, Big Dawg said so and we all did well with Big Dawg policy of growing the economy for everyone, not taking one person’s share to give to someone else…IMO…
And he’ll pay for half his plan — $318 billion over 10 years – with new tax hike on Americans making more than $250,000.
Obama had pledged throughout his campaign to roll back Bush tax cuts for Americans making more than $250,000 a year in fiscal year 2011 – a plan that also will be included in Thursday’s budget — but this is different, aimed at reducing the itemized deduction rate for those taxpayers.
Some advocates for universal health coverage said they were surprised to learn that Obama would turn to a tax increase to create a dedicated fund for his program.
Huh, Seems odd to eliminate a subsidy that incentivizes RURAL CARE doesn’t it?
The other half of the $634 billion would come from changes in savings in Medicare, including ending subsides to private insurance companies that participate in the Medicare Advantage programs in rural areas.
From experience in the health insurance field, I can say rural care is an area that can least afford cuts like this. Urban areas are served by many charities and government programs, and their very ‘urbanity’ draws physicians there.
Getting an excellent doctor to a tiny town, and getting the attention of charities and glamorous Hollywood fundraiser types for rural areas is not doable. Seems Obama is not as concerned with the RURAL POOR..Country Mouse City Mouse Class Warfare and it sucks…
MiM has been pushing for UHC for years and years, but I hate everything about the way this is being done, without hearings, sneaking things through a backdoor in unrelated legislation like the stimulus and Omnibus Budget Bill…
Having a bunch of government pencil pushers decide what is cost-effective treatment is just unacceptable, having spent years processing Medicare claims I assure you, the government WILL decide a stent is too expensive for people of a ‘certain age’.
The Baby Boomers who voted for Team Obama are in for a rude awakening IMO…they use a LOT of resources donchaknow…Soylent Green IS GREEN!
Via AP, (home of noted hack Nedra ‘crotchshot’ Pickler):
President Barack Obama‘s first budget will seek $634 billion over 10 years as a down payment on health care reform, a senior administration official said Wednesday. The official said Obama’s proposal is meant to start a dialogue with Congress over how to provide coverage for an estimated 48 million uninsured while also slowing health care costs, which amount to $2.4 trillion a year and keep rising even as the economy is shrinking.
Obama’s request comes on top of recent health care expansions approved by Congress and also described by his administration as down payments toward overhauling the health care system. Those include $32 billion to expand coverage for the children of low-income workers and $19 billion to speed the adoption of computerized health records.
The House has passed the Omnibus Bill…
Has Obama told them about the CRISIS? Not a sign of being careful with our money anywhere in sight in this bill…I dread hearing about what is in here over the next few weeks…Sounds like Our Government wants to…..party all the time, party all the tiiime….
Who voted how?
Dems who voted no: 20, including the 2 from my neck of the woods, Moderate Dems..
Cardoza,Childers, Cooper,Costa,Donnelly (IN),Driehaus, Giffords, Hill, Kind,Kratovil, Marshall, Matheson, Minnick,Mitchell, Nye, Peterson, Speier, Tanner,Taylor,
GOP who voted yes: 16
Bono Mack, Brown-Waite, Ginny, Cao,Capito, Castle, Dent, Emerson, Gerlach, LoBiondo, McHugh, Miller (MI), Murphy, Tim, Reichert, Upton, Whitfield, Young (AK)
The U.S. House voted to boost spending on domestic programs by 8 percent, ease restrictions on travel to Cuba and kill a school voucher program in Washington, D.C., as part of a $410 billion spending bill.
The chamber voted 245 to 178 to approve an “omnibus” bill combining nine appropriations measures needed to fund the federal government through September, the end of its fiscal year.
After persuading lawmakers to keep pet projects in their districts known as earmarks off the stimulus bill, Obama made no such attempt on the first non-emergency spending measure of his presidency. The result was that lawmakers claimed billions in federal funds for pet projects — a total of 8,570 earmarks at a cost of $7.7 billion, according to Taxpayers for Common Sense. Majority Democrats declined to provide a number of earmarks, but said the cost was far smaller, $3.8 billion, 5 percent less than a year ago.
ATTAAAAACK OF THE KILLER EARMARKS…..
Among the earmarks was one sponsored by Rep. Howard Berman, a California Democrat, who secured $200,000 for a “tattoo removal violence outreach program” in Los Angeles. Aides said the money would pay for a tattoo removal machine that could help gang members or others shed visible signs of their past, and anyone benefiting would be required to perform community service.
Under the bill, Mexican-licensed trucks are banned from operating outside commercial zones along the border with the United States. The Teamsters union, which supported Obama’s election last year, had sought the move. The Bush administration backed a pilot program to permit up to 500 trucks from 100 Mexican motor carriers access to U.S. roads.
Bush administration restrictions on travel to Cuba were loosened in the legislation, to permit more frequent visits and expand the list of family members permitted to make trips to see relatives on the Communist nation-island.
Do you get the sinking feeling that the Congress and the Administration are full throttle ahead on spending of any and all sorts?? It is almost as if…all they want to do is dance….they want to partay oooh they want to get down ooooh
The 1,000-plus-page spending bill provides a fat target for deficit hawks. It includes hundreds of pages of earmarks – pet spending projects inserted by lawmakers, ranging from $185,000 for coral reef research and preservation in Maui County, Hawaii, to $55,000 in meteorological equipment for Pierce College in Woodland Hills, Calif., to $9.9 million for science enhancement at historically black colleges in South Carolina.
Some lawmakers are SO excited they cannot contain themselves and are already reporting back home about all the pork they will be sending :
Memo to Team Obama: When TIME agrees with Rick Santelli you are losing the argument….Tea Party Update
…The only people affected by plummeting real estate prices are the ones who bought a house that cost more than they could afford, hoping for a spike in value so they could sell at a profit or take out a new loan based on an increased value. Their home wasn’t just a place to live; it was an investment they thought they could liquefy at will. If we’re saving these poor souls from the 26.7% drop in their investment, we should give twice as much aid to everyone who has lost approximately 50% in the stock market since its peak. Especially those in Vanguard’s Tax-Managed Capital Appreciation Fund.
Meanwhile, mortgages held by the responsible people Obama says he is trying to help only go into foreclosure when the owners lose their jobs. But the best way to help them is through increased unemployment benefits and job creation. In fact, James Lockhart, who regulates Fannie Mae and Freddie Mac, says he hopes this backward plan keeps at best 40% of the people it dishes out money to from redefaulting on their mortgage. The only plan worth pursuing that works at best 40% of the time is hitting a baseball. I would love to yell that in front of the traders at the Chicago Board of Trade. I would also like to yell at them to get computers like everyone else so they can stop executing trades by waving their hands like idiots.
Much as it pains me, housing prices need to come down a lot more for the sake of the country. It’s not that the housing market has suddenly gotten sick and needs medicine. It was sick, and it’s getting better. Just like $4 gas, Pets.com and Jim Carrey’s career, we are undergoing a needed correction. So I want in on the Chicago tea party that Santelli, in his rant, promised to organize, only I’m hoping it isn’t in Chicago and is more of a cocktail/wine thing or maybe just a Facebook group. But I’m with him on standing back and letting the housing market lose some of its vaulted ceilings, guarded gates and Argentine Balmoral granite tops. It’s not going to be a pretty few years. So let’s save our government money for things we need. Like high-definition television converters.
Tea Party Update from MM:
A reminder of the main resources for activists looking to join:
Stimulus Unemployment Benefits: Democratic Governor Phil Bredesen may reject unemployment expansion funds too…AL also…
Add a Democrat to the growing ranks of Governors who would rather not raise business taxes in a few years when the Federal money runs out….
Bredesen, who says he is “on a fairly short list” of candidates for health and human services secretary, told a Chattanooga paper that he is considering turning down federal funds for unemployment insurance included in the economic recovery package signed by the president last week.
He would be the first Democrat to refuse part of the stimulus for states, joining Republican governors like South Carolina’s Mark Sanford and Louisiana’s Bobby Jindal, who is giving the GOP response to Obama’s economic address this evening.
Bredesen is concerned that accepting $141 million for Tennessee’s unemployment insurance would force the state to expand the program and leave state taxpayers with the bill in two years’ time.
“We are evaluating this piece of money, whether it makes sense for us to take it,” he said. “We may well be one of the states that say we can’t take on that portion of it.”
ALABAMA UPDATE: From Al.com
Gov. Riley said the $66 million allocated to Alabama for expanded unemployment benefits would run out in four years, leaving the state with a permanent unfunded mandate that would result in a $17-million-a-year tax in crease on employers and possibly employees.
As Gov. Riley noted, this is a tax on jobs “at a time when we need to create jobs.” Gov. Barbour pointed out that “you don’t get more jobs by putting an extra tax on creating jobs.”
Santelli IS America….Rasmussen: 54% of Americans say NO to all bailouts…55% say housing plan rewards bad behavior..
So what do Americans think about all these bailout requests?
Given the choice between federal bailouts for the auto companies, the finance industry and financially trouble homeowners or no bailouts for any of them, 54% say no bailouts period.
Just 26% support bailouts for all three, according to a new Rasmussen Reports national telephone survey. Twenty percent (20%) aren’t sure which course is better to follow.
Investors, with their eyes on the financial markets, are even more strongly opposed. Sixty-two percent (62%) of investors say “no” to all three bailouts, with 24% who favor them. Twenty-eight percent (28%) of non-investors support the bailouts, but 45% are opposed.
Confidence as measured by the Rasmussen Investor Index hit a record low on Tuesday – for the second day in a row.
Forty-two percent (42%) of Democrats favor the three bailouts, but 33% are opposed. Twenty-five percent (25%) are undecided.
Among Republicans, on the other hand, 80% oppose the bailouts, with just seven percent (7%) supporting them. Thirteen percent (13%) are not sure. This helps to explain why the $787-billion economic stimulus plan passed both the House and Senate with only three Republican votes. Confidence in that plan has fallen in the week since Obama signed it into law.
Americans not affiliated with either major political party oppose the bailouts by a 55% to 25% margin, with 21% not sure.
Fifty-six percent (56%) of homeowners are opposed, compared to 47% of non-homeowners. Higher-income Americans are more opposed to the bailouts than those who earn less
Last week just after Obama announced his $275-billion taxpayer-backed plan to help as many as nine million Americans avoid foreclosure through measures including subsidized mortgage payments, 45% of Americans said they oppose subsidizing mortgage payments, while 38% thought it was a good idea.
At the beginning of this week, however, 55% of Americans said the federal government would be rewarding bad behavior by providing mortgage subsidies to financially troubled homeowners.
Luntz, Maslansky Strategic Research conducted a focus group to get reactions to Obamas speech to the joint session of Congress, termed his first State of the Union address. The speech addressed healthcare reform, the economy, energy policy, education reform, and accountability.
Strong partisan divides. The view from this group was not quite as gushy about the speech as most of the cable networks would suggest. While Americans continue to root for the President to succeed, the first few weeks of the Obama Administration have done little to erase the partisan skepticism so prevalent of the past eight years. What we witnessed was a group of people polarized by Obama’s message even while they ended up giving him reasonably high marks for his performance overall. In fact, we saw huge partisan divides in nearly every area of Obama’s speech.
A new divide is forming. As significant as the partisan divide, we also saw a new philosophical split emerging: the responsible vs. the irresponsible. Many participants – Democrats and Republicans alike – believe that the stimulus package and the housing bill are doing too much to reward the bad behavior of others. They resent neighbors who never should have purchased homes they couldn’t afford and they are angry that they will now be forced to carry the burden for what they see as reckless behavior. They reject Obama’s recent policy victories as the wrong approach to solving the financial crisis and want to ensure that they will not be asked to sacrifice more to support others.
People and Personal responsibility. For all of the large reform proposals outlined in Obama’s speech, the messages that resonated most were not about government at all. They were about people and personal responsibility. Talk about “the hardest-working people on Earth” or the parent who must take responsibility for her children or the “men and women in uniform” received uniformly positive responses. For Republicans and Democrats, there is agreement that now is a time for greater personal responsibility. And for a former community organizer it is ironic that the messages that did best were those that spoke of giving Americans the power to achieve a better future.
Gentle Ben is appearing before Barney Frank and the House Financial Services Committee now..