Freedom Line Blog

As I have written and argued repeatedly for months, President Obama wants a crisis. He plans to use a crisis to seize even more power for himself and for the government. Now he is a significant step closer to his goal. Despite his finger-pointing con-job in his nasty press conference this afternoon, Obama is the one who deliberately torpedoed the budget talks. He is the one who has yet to put an actual plan on the table. He is the one who refused to even let GOP negotiators talk. He is the one who insisted through most of the year that no other provisions be attached to the hike in the debt limit — that the debt limit hike should be “clean” rather than include even a single cost saving. Now, as Speaker John Boehner just said, and as so many others have said in less vivid language, “dealing with the president is like negotiating with a bowl of Jello.” He just won’t stay still. And he’s doing it on purpose. He’s doing it because he doesn’t want a deal. He wants a crisis. This is a very dangerous game he’s playing, but he’s playing to win. And if he wins, we all lose — we lose financially, and we lose at least some of our freedom. Mark my words. This is what Obama’s game is. To try to win it, he has been fibbing, faking, and fulminating. Once he wins it, he will do far worse.

Over at The American Spectator, I explain why conservatives should accept a scaled-down version of the Gang of Six plan on the budget. Let me make it even more clear. Herewith, the Hillyer Plan, which has legislative elements simple enough that they should be able, on a fast track, to be passed by Aug. 2 — and if not, by about mid-August (which means a delayed August “recess”), which would require a temporary extension of the debt limit which all sides should accept. But let’s be up front about this: Sometimes, Washington gets WAY too tied up with official accounting “scores” of budget proposals, when in truth almost all out-year projections are nonsense, with huge shifts in numbers dependent on unpredictable effects of economic growth, inflation, and other factors. The Hillyer Plan would specifically NOT be “scored” in advance, because the point isn’t to figure how many economic assumptions can dance on the bead of an abacus. Instead, the guiding principle should be good policy combined with overall debt reduction, without worrying about whether the reduction officially hits a specific numerical target. As Jack Kemp and the Gingrich Congress showed, economic growth can and will balance a budget that is reasonably restrained.

Okay, here’s the plan:

1) Permanent (non-sunseted), three-tiered rates for both individual and corporate income taxes, at 12%, 24%, and 30%.

2) Capital gains taxes at the same levels — except that the calculation of the base price would be indexed for inflation for the first time, and no individual capital gain under $5,000 would be taxed.

3) Complete elimination of taxes on ordinary stock dividends. Dividend taxes require far too much accounting for far too little bang for the buck.

4) A cap on the deduction for mortgage interest at $3,000 per month (adjusted upward for inflation every five years). Owners of McMansions will be getting a big enough break via cutting the top rate from 35% to 30% that this trade-off will be more than worth it. A cap, too, on the deduction for state and local income taxes, set at perhaps $10,000. (This would have the effect of at least subtly pressuring high-income-tax states to reduce their own tax rates, while of course gaining at least a little money for the feds.)

5) Complete and permanent elimination of the Alternative Minimum Tax.

6) Elimination of Barack Obama’s hated tax break for private jets.

7) Elimination of all tax breaks for corn ethanol, combined with elimination of the import tariffs on cellulosic ethanol.

8) From the Gang of Six plan: Shift to the chained-CPI (a more accurate measure of inflation) government-wide starting in 2012, along with the following specifications for Social Security: (1) exempt SSI from the shift for five years, and then phase in the shift over the next five years; and (2) provide a minimum benefit equal to 125% of the poverty line for five years. (According to CBO, the shift to chained-CPI would result in the annual adjustment growing, on average, about 0.25 percentage points per year slower than the current CPI.)

9) From the Gang of Six plan: Repeal the CLASS Act.

10) Allow the Dems to pick any business tax “loopholes” of their choice for elimination, of up to $150 billion over ten years, of which the GOP would be obliged to accept $100 billion of them. (Note: The selection of options, first by the Dems and then by the GOP, could easily be done within two weeks.)

11) Require the administration by law, within a year, to approve permits to open enough federal-government-owned lands to energy development to produce, via royalties and taxes, at least $100 billion in federal revenue over the next ten years. This idea stems from a column by Gary Palmer of the Alabama, not yet available online. Palmer explains: “According to the U.S. Department of the Interior and the Bureau  of Land Management, there are 800 billion barrels of recoverable oil from oil shale in the Green River Formation. This is three times more than the proven oil reserves of Saudi Arabia. The Green River Formation covers about 11 million acres in Colorado, Utah and Wyoming, with about 80 percent of the recoverable oil in a 1,225 sq. mile area of western Colorado. The federal government owns or manages 73 percent of the lands that contain significant oil shale deposits in the West and 80 percent of the recoverable oil in the Green River Formation.”

12) Immediately remove authority to spend at least $75 billion in whatever “unobligated” funds still remain (some were withdrawn a few months ago in the 2011 Continuing Resolution).
13) Pass a shell budget resolution that sets overall non-defense Appropriations limits for 2012 of $25 billion less than the combined budget authority approved for 2011 (in actual dollars, without an inflation adjustment).

14) Before final passage of this whole package, pass “Sense of the House” and “Sense of the Senate” resolutions (there’s no time for actual legislation before Aug. 2 to implement the specifics)  supporting the following items in the Gang of Six spending outline:

• Health, Education, Labor, and Pensions would find $70 billion.
• Homeland Security and Government Affairs would find $65 billion.
• Agriculture would find $11 billion while protecting the Supplemental Nutrition Assistance Program.
• Commerce would find $11 billion.
• Energy would find $6 billion and may propose additional policies to generate savings that would be applied to the infrastructure deficit or to reduce the deficit.
• Judiciary would find an unspecified amount through medical malpractice reform.

• Impose spending caps and security/nonsecurity firewalls.
• Sequester accounts at the end of the year to recoup any excessive spending by Congress.
• Restrict the use of emergency designations that circumvent the spending caps.
• Prevent Congress from exceeding the caps by requiring a stand-alone resolution subject to a 67-vote threshold, in order to isolate that vote to increase the deficit from any other policy items.

• Achieve program integrity savings of $26 billion in entitlement programs to curb fraud, abuse, and other wasteful spending government-wide.
• Create a working group to provide updated budget concepts for CBO and OMB.

There. I hate to have a “14-point” plan because it has the cringe-inducing whiff of Woodrow Wilson, but that’s just how the numbering came out. Anyway, I believe every one of the first 13 points could actually be enacted in law by Aug. 2 or certainly by August 15, and while the resolutions in Point 14 obviously do not have the force of law until subsequent legislation enacts them, it would have enough moral force, with enough public attention, to effectively force compliance as soon as the complicated legislative wheels could operate.

Fred Barnes’ story at the Weekly Standard about our supercilious, self-important, rude, overbearing, blowhard of a president is absolute must reading. It explains why these budget talks have been unproductive: because Barack Hussein The One The Redeemer Obama has absolutely no regard for anybody else’s opinion, no patience with dissent of any kind — and no manners. In short, he’s a boor — a boor with authoritarian inclinations:

The president has been less genial away from the prying eyes of the press and the public. In the private talks, he’s dominated the discussion with the eight most senior members of Congress in an overbearing way not likely to lead to compromise. He’s been argumentative. He’s come across as President Blowhard.

After Sperling briefed the group on the deficit cap proposal, House Democratic leader Nancy Pelosi addressed another subject. When a Republican participant criticized the deficit cap, Obama interrupted with a monologue. When the Republican tried to speak a second time, the president quickly cut him off and delivered another sermon on why the criticism was wrong.

I have argued all along that Obama doesn’t really even want a deal. He wants  a crisis. His behavior — pretending to be the adult and compromiser in public while actually torpedoing progress in private — is exactly that of somebody who is trying to foment a crisis from which he can benefit.

That’s why Charles Krauthammer makes sense:

[D]are the president to put the country in default on the basis of ‘I won’t accept anything short. I only want something that will serve me on Election Day.’

All of this talk about a Balanced Budget Amendment is fine and dandy, but it has NOTHING to do with the debt ceiling fight. It is literally impossible to get a BBA in time for the debt limit deadline. The best thing to do is to stop talking and actually pass spending cuts attached to a short-term lifting of the debt limit. Even better, doing a shorter-term debt limit hike also means the spending cuts, while substantial, are less likely to include things against which Obama can demagogue. In other words, the cuts, while not as big in total dollars, can be more carefully chosen for PR purposes — and they will accompany a more restrained debt-limit hike, which itself sends a message that conservatives refuse to give carte blanche to debt as high as Obama wants the new limit to be.

Yes, call Obama’s bluff. The way to do that is to pass a politically palatable bill with real savings — and leave extraneous things out of it.