WASHINGTON (AP) -- President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration's emerging health care overhaul.
The "pay-as-you-go" budget formula plan is significantly weaker than a proposal Obama issued with little fanfare last month.
It would carve out about $2.5 trillion worth of exemptions for Obama's priorities over the next decade. His health care reform plan also would get a green light to run big deficits in its early years. But over a decade, Congress would have to come up with money to cover those early year deficits.
Obama's latest proposal for addressing deficits urges Congress to pass a law requiring lawmakers to pay for new spending programs and tax cuts without further adding to exploding deficits projected to total about $10 trillion over the next decade.
If new spending or tax reductions are not offset, there would be automatic cuts in so-called mandatory programs -- although Social Security payments and the Medicaid health care program for poor and disabled would be exempt and cuts to Medicare would be sharply limited.
"The 'pay-as-you-go' rule is very simple," Obama said. "Congress can only spend a dollar if it saves a dollar elsewhere."
Last month Obama suggested a tougher plan that would prohibit Congress from swelling the deficit in one year by putting off until later years the tax increases or spending cuts to pay for it.
The requirement for legislation to be financed over the coming decade generally mirrors existing congressional rules and reflects the likelihood that Obama's health care plan will add many billions of dollars to the deficit in the early years. Savings and revenues in later years would have to make up for the initial deficits.
Congress lived under a so-called "pay-go" regime in the 1990s and the early years of this decade. But it didn't stop lawmakers from passing President George W. Bush's landmark 2001 and 2003 tax cuts and big increases in farm subsidies without making the required spending cuts elsewhere. A $127 billion surplus in 2001 subsequently turned into deficits over the next four years of $159 billion, $377 billion, $413 billion and $319 billion.
The rules still exist and lawmakers routinely find ways around them. For example, a bill to effectively double GI Bill education benefits was enacted last year. Congress also regularly waives the rules to pass an annual "patch" to the alternative minimum tax, sparing some 20 million families from a $2,000 tax increase on average.
Still, Democrats profess a faith in pay-as-you-go rules.
"It is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s -- and that when this rule was abandoned, we returned to record deficits that doubled the national debt," Obama said.
In fact, the surpluses of the late 1990s were largely due to a huge influx of tax revenues from a booming economy.
Rep. Dennis Moore, D-Kan., said the House is likely to pass Obama's latest proposal next month. The plan faces far tougher sledding in the Senate, where Budget Committee Chairman Kent Conrad, D-N.D., has expressed serious reservations.
Conrad said Obama's proposal does nothing about the fiscal perils the country already faces, including deficits that the Congressional Budget Office predicts will average nearly $1 trillion a year over the next decade.
"I remain concerned about the potential effect of this proposal on American farmers, seniors and veterans," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.
Republicans said new budget rules ring hollow in the wake of the Obama-championed $787 billion stimulus package and other deficit spending. They said legal limits on appropriations should be put into place as they were in the 1990s, though such "caps" were easily evaded when surpluses appeared.
Congress is just ramping up the annual appropriations process, which in the House would award increases averaging 12 percent to non-defense programs. Obama's proposal does not include the comparable "caps" from the 1990s.
"Time after time this year, Democrats have ignored calls for fiscal responsibility," said House GOP leader John Boehner of Ohio. "We don't need more rhetoric and gimmicks. We need action to tackle the tremendous fiscal challenges facing this nation."
Obama's proposal would require future tax cuts to be financed by tax increases elsewhere. But again, he carves out several exceptions, including for an extension of Bush's tax cuts due to expire in 2011 and relief from the alternative minimum tax.
The federal deficit is on pace to explode past $1.8 trillion this year, more than four times last year's all-time high. The record borrowing is credited with pushing up interest rates, which could imperil chances for a recovery later in the year. (source)
History may repeat itself two or three times or even reach the point, which Francis Fukuyama described as the end of history. The US historian of Japanese origin introduced the notion during the time when there were two dominating superpowers in the world – the United States and the Soviet Union.
When the USSR collapsed and Russia lost much of its international influence, the USA became the world’s number one gendarme. That was the time, when US presidents started making one mistake after another. Their mistakes eventually led to the phenomenon, which is currently known as the clash of civilizations. America needed an enemy. America needed oil. Both were found in one country – Iraq.
US President George W. Bush declared the date of September 11, 2001 as the beginning of new history in the world and announced the crusade against the international terrorism, which took roots in radical countries of the Muslim world.
Pakistan found itself involved in the US-led war in Afghanistan. The relations between the United States and Iran were finally ruined and were balancing on the brink of war during the last year of Bush’s presidency.
The new president of the United States of America, the first Afro-American of the Muslim origin, Barack Hussein Obama, had to face the severe reality of Bush’s legacy.
As soon as the United States found itself in the middle of the economic crisis, the administration of the country decided that it was the best time to launch the struggle for peace in the whole world. This is exactly what Mikhail Gorbachev was doing during the agony of the Soviet Union.
Barack Obama did not say anything when Israeli troops were destroying residential quarters in the Gaza Strip during the Cast Lead operation in Palestine. Obama was as silent as a sphinx.
The sphinx started talking.
Obama said during his landmark speech at the Cairo University that the state of affairs in Palestine was unbearable. He also emphasized that the USA’s ties with Israel were indestructible. Obama quoted the Holy Book of all Muslims, the Qur’an and urged the people of all religions to live in peace with each other. However, good words do not leave a sweet taste in the mouth.
Obama says that it would be good to give a new incentive to the dialogue with the Muslim world. Will the US administration be able to recognize the rights of the Palestinian Authority to create an independent state? Will the US administration ever realize that the Muslim world is not a pack of cards which the USA can play to win the geopolitical leadership?
History repeats itself. The Mideastern tour of the Afro-American head of the White House was promoted as a new page in the relations between America and the Muslim world. As a matter of fact, Mr. Obama simply did what his predecessors had done before him.
Ivan Tulyakov (source)
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Well, we were the good guys in 1984, it felt that way. It hasn't felt that way in recent years. So Obama’s had, really, a different task We're seen too often as the bad guys. And he – he has a very different job from – Reagan was all about America, and you talked about it. Obama is ‘we are above that now.’ We're not just parochial, we're not just chauvinistic, we're not just provincial. We stand for something – I mean in a way Obama’s standing above the country, above – above the world, he’s sort of God. He’s-
“As a practical matter, the homeless won’t get very far unless they can persuade a Republican to break with Ronald Reagan’s policies — or elect a Democrat.”This is the typical attitude behind most of the media, most certainly the msm.
— Newsweek senior editor Tom Mathews in the March 21, 1988 issue. (source)
It's a lot like an old glove that still fits after 30 years. I've benched all of my life since I was 12, and it has always been a comfortable ritual. Good for the bones, which contributes greatly to overall health, toning/strength enhancements to the muscle groups involved, and development of balance skills due to the nature of free weights.
To say nothing of the mental therapeutic benefits.
