White House Takes The UPS Approach to Explain Tax Cuts

President Obama presented his nearly $4 trillion budget, proposing to cut more than $1 trillion from Federal programs over the next ten years, with $200 billion in cuts to occur over the next two years. Although these cuts may appear, at first glance, significant to the average American, in light of the recently enacted tax cuts of $858 billion over the next two years, that $200 billion of proposed spending cuts leaves $658 billion of thoted for.

In balancing our national budget, Obama and Congress are focusing on the wrong side of the financial equation. The projected deficit in 2011 is $1.65 trillion; however, the whole non-defense discretionary spending budget in 2010 was $477 billion. Even if all non-defense discretionary spending were eliminated, there would still remain a deficit of over $1.1 trillion. The math is clear that Congress cannot eliminate deficit spending by budget cuts. Taxes will need to be raised.

Some of the cuts that President Obama is proposing in his budget include $300 million for community block grants, $2.35 billion for low income home energy assistance program, and $400 billion from a five-year domestic spending freeze, as well as reductions in pell grants, graduate school loans, community access, etc. But all of these cuts do not come close to offsetting the lost revenues from the extension of the tax cuts to the rich.

A pattern has emerged in Obama’s dealings with the Republicans. Obama agreed with the Republican argument to give tax cuts to the rich to help the economy. Now he is proposing to cut programs for the middle class and the poor to balance the budget. In doing such, Obama is moving the political fulcrum to the right. His approach of pre-emptively offering something—whether it be tax cuts for the rich or budget cuts affecting the poor and middle class—instead of negotiating a quid pro quo, is effectively pushing the Republicans further to the right, seeing the prospect of gaining even more ground.

Although compromise is demanded in politics, leadership cannot be defined by compromise alone. There are principles worth fighting for; and leaders must be willing to mobilize public opinion in support of those principles. Since our political system is rigged because of campaign finance and lobbying, a leader professing change and reform needs to present a different narrative to the populace. Churchill, Teddy Roosevelt, and Franklin Roosevelt recognized the value of the bully pulpit. Despite his rhetorical skills, Obama has failed to do so. His posture of appeasement will in all likelihood allow the Republicans to balance the budget on the backs of the working class and low income Americans to the benefit of Wall Streeters and Multinational Corporations, who offshore jobs, brought about the financial crisis, and robbed trillions from the American people. Since Obama is seeking re-election in 2012, and is charting his own course, he will not lead the American people to the Promised Land.

America needs major tax reform. The extension of tax cuts to people who need them the least was the last thing Congress needed to do. Some Democrats want to cut $40 billion in subsidies to the oil companies for five years; however, Republicans refuse to cut these subsidies to the oil companies, preferring to cut programs for the poor and middle class. Moreover, in spite of two wars costing $120 billion per year and an inflation adjusted military budget larger than those in the Bush years and the Cold War, neither party desires to cut military spending, which constitutes 58% of the discretionary spending budget.

Reform will never come from Congress nor a President like Obama. It will require people outside of Washington working with allies inside Congress in order to stop this disconnect between what is transpiring in Washington and what this country needs. It will require people coming together as they did in Egypt in a pro-democracy movement. The question is, can and will the people of America come together before it is too late.