As the deadline to pass the 2012 budget looms, Congress and the President continue to find themselves at an impasse. This cheat sheet is designed to give you the facts you need to know about the entire process:
DEBT & UNEMPLOYMENT
- Current debt stands at $14.3 trillion
- August 2, 2011 is the deadline to raise the debt ceiling (authorization to borrow more money to pay for current expenses in the U.S. government)
- Although it is customary for the President to produce a budget proposal to Congress, all budget bills originate out of the House and must pass Congress. They can be signed or vetoed by the President. Once a budget is signed, it is up to the President to administer the budget.
- Unemployment was at 8.8% in March, then 9.0% in April, 9.1% in May, and then 9.2% in June.
- Bush took the U.S. into 2 wars (Iraq & Afghanistan) and signed TARP into law
- Bush borrowed $1.6 billion per day during his Presidency
- In 2006, the Senate narrowly approved raising the limit along partisan lines, 52-48, with all Democrats opposed.
- Bush added $4 trillion to the debt over 8 years
- Obama added 4 new wars (Libya, Yemen, Pakistan & Somalia) and signed into law Obamacare and the $787 billion stimulus bill
- Obama is borrowing $4 billion per day during his Presidency
- In 2006, Obama voted AGAINST raising the debt limit and issued the following statement, “Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
- In 2010, Obama created a Presidential Commission called the National Commission on Fiscal Responsibility and Reform (also called Bowles-Simpson) which called for $4 trillion in deficit reduction cuts over the next 10 years
- Obama has added $3.7 trillion to the debt over 2.5 years
- Obama promised to veto Cut, Cap & Balance
- Democrat Obama produced a budget for 2012. It was a $3.73 trillion budget that included the end to IRS deductions for charitable contributions and interest on mortgage payments. The plan would place the federal government’s deficit next year at $1.1 trillion (down from $1.6 trillion this year). It suggests reducing the deficit by $1.1 trillion over the next 10 years
- Republican Budget Committee Chairman’s Paul Ryan’s 2012 budget would cut spending by $6 trillion over the next 10 years
- Republican Cut, Cap & Balance Act is designed cut the amount of federal government spending, cap the amount of future spending as a percentage of the GDP, require Congress to pass a Balanced Budget amendment to the U.S. Constitution, and raise the national debt ceiling to allow the federal government to borrow more money.
- No Democrats in Congress have submitted a budget for vote
- In July 2011, a “Gang of Six” (three Democrats and three Republicans) proposed a solution to the US debt ceiling crisis. The compromise would reduce future increases in the deficit by $3.7 trillion over 10 years and was praised by Obama. However, the figure quoted represents only an estimated reduction in the continued growth of the debt, not an actual reduction compared to the current 2011 deficit level.
- Currently, there are talks of two possible debt deals. Republican House Speaker John Boehner has a plan to raise the current $14.3 trillion debt ceiling by about $900 billion, along with commensurate spending cuts and caps. That would require lawmakers to go through the painful process again next spring with an even larger debt and deficit package. And Democrat Senate Majority Leader Harry Reid plans on unveiling a $2.7 trillion package of spending cuts to accompany a debt hike big enough to avoid another vote before the 2012 election.
- It’s been over 820 days since the Senate, controlled by Democrat Harry Reid, passed a budget
- Congress may not bind future Congresses to their budget. They can only do the budget for the following year. So, when one hears that the budget plan will “eliminate the debt in ten years,” that would only happen if all future Congresses maintained the same budget proposal. Most Congresses ignore past budget proposals and increase spending… rendering any prior budget impotent.
- On May 25, 2011, the Senate rejected Obama’s budget by a vote of 0-97
- On April 15, 2011, the House passed the Ryan plan 235-193
- On May 25, 2011, the Senate rejected the Ryan plan 40-57
- On July 19, 2011, the House passed Cut, Cap & Balance by a vote of 234-190
- On July 22, 2011, the Senate voted to table the Cut, Cap & Balance bill 51-46 down party lines
- Obama’s plan was approved by 44% of the country (Gallup 4/27)
- The Ryan plan was approved by 43% of the country (Gallup 4/27)
- Cut, Cap & Balance was approved by 66% of the country (CNN 7/21)
- Congress’ approval rating was 21% (NBC/WSJ 5/10)
- Congress’ approval rating is currently 18% (Gallup 7/11)
- Congress’ approval rating has dropped 3 points in 62 days
- Obama’s approval rating was 60% (Associated Press 5/09)
- Obama’s approval rating is currently 42% (Gallup 7/23)
- Obama’s approval rating has dropped 18 points in 75 days
- Obama’s disapproval rating near a record high at 55% (Rasmussen 7/25)
LIES, SCARE TACTICS & HYPOCRISY
- Obama Lie: “… you have 80% of the American people who support a balanced approach. 80% of the American people support an approach that includes revenues and includes cuts.”
Truth: At best, Obama can refer to July 7-10 Gallup poll in which 69% of the people support spending cuts together with new taxes; however, that same poll shows that Americans do not want to increase the debt limit by a 2 to 1 margin. A Rasmussen poll taken the same week showed that only 34% believe a tax hike should be included in a debt-ceiling agreement.
- Obama Lie: “You had a bipartisan group of senators, including Republicans who are in leadership in the Senate, calling for what effectively was about $2 trillion above the Republican baseline that they’ve been working off of. What we said was give us $1.2 trillion in additional revenues.”
Truth: The negotiations just before breakdown called for $800 billion in new taxes (not $1.2 trillion), but after the Gang of Six plan came out, Obama demanded another $400 billion in new taxes: a 50% increase.
- Obama Lie: “I’m not pointing the finger at anyone.” Then, remarkably, in the next breath stated that Democrats have bent over backward and Republicans were not working toward a solution.
- Obama Lie: “businesses that are trying to make payroll, all of them could end up being impacted as a consequence of a default.”
Truth: Obama is arguing that a default will cause increased interest rates, which will have “adverse consequences.” Putting aside the fact that failing to increase the debt limit will not result in a default unless Obama chooses to default, even a default and the increased interest rates will have little if any effect on most “businesses that are trying to make payroll.” Unlike the US government, the vast majority of businesses do not borrow money to pay their employees. Even if interest rates did rise, payroll payments for most businesses would stay the same.
- “We could end up with a situation, for example, where interest rates rise for everybody all throughout the country, effectively a tax increase on everybody.”
Truth: Raising the debt limit increases the national debt which Americans will have to pay back directly through taxes. Obama’s budget proposes $1.1 trillion in deficit spending. So, he borrowing now for future generations to pay back through taxes and is scaring the current population with the risk of higher interest rates… which is NOT a tax.
- Obama lie: “I cannot guarantee that those [social security] checks go out on August 3rd if we haven’t resolved this issue, because there may simply not be the money in the coffers to do it.”
Truth: The federal government takes in about $170 billion each month in revenues, but pays less than $29 billion each month in interest on the debt. The Bipartisan Policy Center has laid out a plan where the Treasury could pay: all debt interest, all Social Security obligations, all Medicare and Medicaid obligations, all Defense contractor bills, all Veterans payments, all active duty troops; and still have almost $7 billion left over every month for other items.
- Obama Lie: “All the congressional leaders have reiterated the desire to make sure that the United States does not default on our obligations and that the full faith and credit of the United States is preserved”
Truth: There is zero risk of a default to the creditors of US debt, unless Obama chooses not to pay the interest on our debt with the $170 billion in revenue that comes in monthly.
- On May 14, 2009, Obama said, “We can’t keep on just borrowing from China. We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt… It will have a dampening effect on our economy.”
Truth: Obama’s 2012 budget proposed more borrowing… $1.1 trillion worth
- In August 2009, Obama said, “Normally, you don’t raise taxes in a recession, which is why we haven’t and why we’ve instead cut taxes. So I guess what I’d say to Scott [Ferguson] is – his economics are right. You don’t raise taxes in a recession. We haven’t raised taxes in a recession.”
Truth: Obama’s 2012 budget called for $1.2 trillion in new taxes
- Oh, just one more time… Obama voted AGAINST raising the debt limit and issued the following statement, “Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
Obama is right when he said that our debt problem is a failure of leadership and America deserves better. So, by his own words and standards, Obama is a failure.
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