The Democrats’ “New” Plan for America: Tax, Spend and Cut Defense (Updated)
[Guest post by DRJ]
Here are a few of the things Democrats plan if they win in November:
Rep. Barney Frank wants to cut defense spending 25% and effectively defund the troops to get the US out of Iraq sooner:
“In a meeting with the editorial board of The Standard-Times, Rep. Frank, D-Mass., also called for a 25 percent cut in military spending, saying the Pentagon has to start choosing from its many weapons programs, and that upper-income taxpayers are going to see an increase in what they are asked to pay.
The military cuts also mean getting out of Iraq sooner, he said.”
Frank also plans to spend more money and raise taxes, and he is joined by Speaker Nancy Pelosi and Majority Leader Harry Reid who want to call a special session of Congress to spend $150B:
“After consulting with Barack Obama, Democratic leaders are likely to call Congress back to work after the election in hopes of passing legislation that would include extended jobless benefits, money for food stamps and possibly a tax rebate, officials said Saturday.
The bill’s total cost could reach $150 billion, these officials said.”
Other reports suggest the Democrats have inflated their spending goals to $300B or more.
Meanwhile, House Democrats contemplate abolishing 401(k) tax breaks in favor of a government mandated and run system:
“Under [a plan by Teresa Ghilarducci, professor of economic-policy analysis at The New School for Social Research in New York], all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.”
Finally, the DC Examiner reviews recent liberal spending bills that will likely resurface under a Democratic government:
• Tax relief for trial lawyers — $1.5 billion worth over a decade by changing rules to encourage more and riskier “jackpot justice” lawsuits. (Section 311 of H.R. 6049.)
• Obama’s own proposed Global Poverty Act that would require the United States to spend its own money working at “eradicating extreme hunger, promoting gender equality, empowering women… ensuring environmental sustainability…[and] achieving significant improvement in the lives of at least 100 million slum dwellers” worldwide. Frank Gaffney of the Center for Security Policy did the math and concluded this would amount to a new commitment of $845 billion in new foreign aid through 2015. (S.2433)
• New federal subsidies to buy gas for families making up to three times the federal poverty line, which would be $63,600 in annual income for a family of four. (H.R. 6561)
• Wage insurance. Create a new federal payroll tax on all workers to pay for “insurance” that would – get this – pay people up to 50 percent of the difference in wages between an old job and a new, lower-paying job. So if John Doe voluntarily takes a new job that requires 10 hours less work per week, the government would pay him for five of the hours that he doesn’t work – courtesy of other, harder-working wage earners.
• A new, Cabinet-level, multi-billion-dollar federal Department of Peace, dedicated to “peace education and training.” (H.R. 808)
The Democratic Party’s first order of business will be “No Dollar Left Untaxed or Unspent.”
UPDATE: Mike K at A Brief History has much more on the 401k proposal.
— DRJ
Request for clarification:
“…New federal subsidies to buy gas for families…”
Is this a subsidy for the purchase of Natural Gas, or Gasoline?
Another Drew (a9cfc2) — 10/25/2008 @ 11:13 amThe military cut is madness. We spend less of the GDP on defense now than we did in 1962; Heritage chart
voiceofreason2 (10af7e) — 10/25/2008 @ 11:30 amWe do need to get the defense contracts under control – Eisenhower called that absolutely right before he left office and no one listened. We are not spending it smartly, that is the problem
But I am concerned that like the 90’s “Peace Dividend” they will take the easy route and make the cuts through personnel. Defense contractors and lobbyists are happy and they can claim “victory”.
As for the rest I’m really glad that after retiring last year and going into gov service we stayed put in our modest little 1400 square foot house. New intermediate strategy is to pay even more of our debt off and see which way the wind is blowing before moving into nicer digs. Glad I have those rosebushes to enjoy!
I had some similar thoughts last week. Here’s another preview if Rashid Khalidi has any influence.
The first two years, until the 2010 Congressional elections, will be a rough ride.
Mike K (2cf494) — 10/25/2008 @ 11:31 amNow that is news worthy.
ML (14488c) — 10/25/2008 @ 11:31 amSomething the MSM should have done long ago, oh, that’s right they cant do that if they want the Obama to be elected, my bad.
Other cabinet departments we could see:
Department of Banking: Oversees the permanently nationalized banking systems.
Department of Taxation: Much larger IRS, allowing frequent audits of higher income individuals and private businesses. Also works with DEP to reduce CO2 production through direct taxation.
Department of Environmental Protection: The Green Police.
Department of Health Services: The National Health System, Medicare, etc.
Department of Human Services: Manages the wealth-spreading, and post-racial affirmative action. May be called “Department of Love”
Department of Information: In charge of preventing the kind of one-sided media that used to infest the Internet and talk-radio. Subsidizes print newspapers. Assures that news outlets are controlled by authentic community organizations, rather than faceless corporations.
Eliza (0b2493) — 10/25/2008 @ 11:40 am...that would require the United States to spend its own money …
All those bullet points are fraught with economic brinkmanship. However, this phrase is the one that flies right over the head of most everyone. Does not anyone understand what has just occurred globally with the crash of most every financial center in the world? Fear has brought truck loads of repatriated US$ to cash and cash equivalents. Hedge funds and mutuals blowing up have sold at any price the market dictates because their panic-driven clients want their money in cash and Treasuries. The US$ is soaring on the back of risk aversion globally. Not on fundamentals, on panic to safety alone.
So far, the bailout money has been squirreled away by the banks and other recipients to bolster their balance sheets in order to avoid their individual demises. That’s why the Fed and Treas now are going straight to the corporate bond path to get money flowing through the ‘system’ again.
So, the printing presses started up these last few weeks after a money supply contraction earlier this year to prop up the dollar, and unintentionally just added fuel to the credit collapse. But should almost any one of those bullet points reach fruition, the money supply expansion would explode even further. The outcome of that would seem to beg Carter days of stagflation. But that would appear only after the US$ loses its current day in the sun. Which could go on longer than anyone knows. Fiat means faith, and never underestimate believers. I have, and have paid for it.
Yet not much of all that printed up currency [and not just the US, either] appears headed to the credit markets for the time being. And the credit markets are the engine of economic real growth. Until risk becomes less onerous, the lenders will sit on their meager balances holding their breath, and cash burning producers will have to slow down or shut down. Yes, there are solid producers out there who have ‘banked’ tons of cash during the past booms. Their shares have sunk with all the badly leveraged companies, and right now their shares are being cherry-picked by company insiders for the ‘turn around’ which might take years. Insider buying is up over 50%, about the same as 1987 and 2002. Not that they are omniscient, they’re just loading up on ‘cheap’ shares in their own businesses which they know inside out, so to speak. Will that work? ¿Quién sabe?
And those bullet points resemble some of the same things Japan did when their banking system froze credit. We know that didn’t turn out well. But who knows the future? Although, looking back at historical results of these type of govt economic and monetary interventionist actions does allow one to establish probabilities of various outcomes.
allan (cd29c4) — 10/25/2008 @ 12:32 pmAD:
I don’t know but I had the same question. Could be both.
DRJ (c953ab) — 10/25/2008 @ 12:35 pmFollowing the Crash of ’29, as the Federal Government interferred more and more in the financial system, the system became less, and less liquid, until eventually, investors kept all their assets in cash (or gold), and didn’t provide any liquidity to the markets, and industry was forced to shut down, creating an unemployment rate exceeding 25% of MEN.
Another Drew (a9cfc2) — 10/25/2008 @ 12:40 pmIf the Federal Government insists on inserting itself into more and more areas of the market, how soon before we see the same sequence of events again? But, this time, with both men and women out of work – probably at a higher rate than before.
Obama tax plan, from the Donkey’s mouth: Barackobama.com
Simplify Tax System So 40 Million Americans Can Do Their Taxes in Less Than Five Minutes. Obama will reform our tax system to greatly reduce its complexity, consolidating several credits and giving taxpayers the option of pre-filled tax forms to verify, sign and return. Under the Obama tax plan, 40 million Americans who take the standard deduction will be able to do their taxes in less than five minutes and will not have to hire an accountant. This will save Americans more than $2 billion in tax preparer fees and more than 200 million hours of work.
I find this disturbing, the IRS filling out your 1040EZ form.
Its been a while since I did the 1040EZ, but I didn’t need an accountant and it didn’t take more than say 15 minutes tops to fill the form out. I question the 2 billion and 200 million as pie in the sky ideas.
Now maybe Obama’s idea of creating new jobs is really just to make a few hundred thousand accountants look for a new one?
Ordinary Income: The top two income tax brackets would return to their 1990’s levels of 36% and 39.6%. All other tax brackets would remain as they are today. Obama would also restore the 1990’s levels for the personal exemption and itemized deduction phaseouts (known as PEP and Pease). Obama would work with the Treasury Department to adjust the thresholds of these rates slightly to ensure that no married couple making less than $250,000 (or single making less than $200,000) was affected by these changes.
Notice the boldness. No real promise there even though that’s all he has been promising to the people. I see another “read my lips, no new taxes” happening yet again.
ML (14488c) — 10/25/2008 @ 12:41 pmSo we will be finally helping Obama’s half brother who lives in a slum?
So much for “caring” people like Barack.
Patricia (ee5c9d) — 10/25/2008 @ 12:50 pmAnd just a reminder, these rates are not the Reagan era rates that he so likes to compare his plan to (when Reagan left office, the top rate was 28%), they are the rates instituted by Bill Clinton in 1993 when he started taxing Social Security benefits among other things.
I would not be surprised if a Dem Congress, with re-inforced majorities, doesn’t try to take us back to Carter-era rates, without any of the deductions/exemptions.
We’re going to be screwed, no KY, and it’s going to hurt!
Another Drew (a9cfc2) — 10/25/2008 @ 12:52 pmI’ve updated the post to add a link to Mike K’s discussion of the 401k/pension proposal.
DRJ (c953ab) — 10/25/2008 @ 12:57 pm• Tax relief for trial lawyers — $1.5 billion worth over a decade by changing rules to encourage more and riskier “jackpot justice” lawsuits. (Section 311 of H.R. 6049.)
Physicians working for the federal government comprehensive health plan for the proletariat will have their (otherwise prohibitive) malpractice insurance paid.
Department of Information: In charge of preventing the kind of one-sided media that used to infest the Internet and talk-radio. Subsidizes print newspapers. Assures that news outlets are controlled by authentic community organizations, rather than faceless corporations.
Hey gang, where can we set up shop to broadcast “Radio Free America”? (If you don’t recognize the reference, ask someone over 45, maybe 50).
The Alaskan Independence Party has not been the source of violent protests, is that correct?
MD in Philly (3d3f72) — 10/25/2008 @ 2:17 pmHmmm… Tax, spend, and cut the military… Hmmmm
It seems as though I have heard of such a plan before…
Oh yes… Now I remember…
Scott Jacobs (a1c284) — 10/25/2008 @ 2:30 pmGeorge Bush’s plan “simplified” taxes for millions by taking them out of the income tax system altogether.
But Democrats won’t tell you that.
SPQR (26be8b) — 10/25/2008 @ 3:00 pmSPQRm you know better than that…
He didn’t remove as many as the Dems would have liked, thus it is an increase…
Scott Jacobs (d3a6ec) — 10/25/2008 @ 4:30 pmOh, the stock market is going to continue to tank as it starts to accept an Obama presidency. I just don’t know why McCain didn’t look the American public in the eye during the last debate and say: “Hey, get out there and change those poll numbers and make em’ swing widely in my favor. Then watch the stock market do well.”
If this was a bizarro world and the MSM was conservative, Barry O would be carrying around a biggest huge sign on his back, stamped: SOCIALIST, and on the front: FRIEND OF TERRORISTS. He would be crippled and McCain would carry every state.
PC14 (82e46c) — 10/25/2008 @ 6:00 pm__________________________________________
Here’s one of the 50 states of the US that mimics the brain of Barack Obama.
If the phrase of the day is “it’s the economy, stupid,”–and that is supposed to mean one does NOT favor economic decline (and repudiates capitalism)–then one would have to be quite stupid to believe that becoming philosophically liberal and favoring liberal politicians and their policymaking is the answer.
Mark (3c8ccc) — 10/25/2008 @ 9:22 pm__________________________________________