# Obama’s Fuzzy Stimulus Math

## Obama proposes 36% cut to Social Security revenue

Let’s forget the fact that Obama’s entire Stimulus 10.0 is a counterintuitive proposal that doubles down on the very failures that precipitated this speech.  Let’s also disregard the fact that enshrining unemployment insurance as a permanent handout will perpetuate unemployment.  And more union-induced, short-term money drops on infrastructure will do nothing but stimulate traffic jams.  Let’s focus purely on the very numbers that the administration has offered –numbers that would undoubtedly be revised upward, if the plan is passed.

Total package – \$447 billion

- 50% payroll tax cut for every employee, dropping the rate from 6.2% to 3.1%= \$175 billion

-Obama also proposed cutting the employer payroll tax in half on the first \$5 million of a firm’s payroll in 2012. About 98% of firms have payrolls of \$5 million or less.= \$70 billion

-National infrastructure bank = \$10 billion

- Pork project handouts to unions for roads, rails and bridges= \$50 billion

-An unprecedented extension of unemployment insurance benefits to be extended for another year, beyond the 99 weeks= \$62 billion.

-Handouts to public school teacher unions, even though we already spend more per capita on education than any other country=\$35 billion

-Refurbishing schools, a responsibility of local government=\$25 billion

-Handouts to community colleges=\$5 billion

-Rehabilitate vacant property=\$15 billion

Despite the steep cost, Obama claims that it will all be paid for.  How will he pay for it?

While he has failed to account for the source of revenue, he hinted to tax increases on rich people and closing oil company tax loopholes.  But here is the kicker.  As we’ve pointed out previously, the revenue from removing those oil company tax deductions would be a paltry \$2 billion.  The revenue from eliminating the so-called corporate tax deduction would be a miniscule \$300 million!

To put this mathematical farce in another perspective; the entire revenue from corporate taxes in 2011 is estimated to be \$192 billion.  Yet, Obama plans to offset \$447 billion worth of stimulus!  He would need to drastically raise personal income rates to a crippling level, in order to accomplish that.  Or, more likely, he will just increase the deficit.

Here’s another point:  We all love tax cuts, but the payroll taxes are different because they are needed to pay for Social Security.  Yet, Obama plans to cut revenues by \$245 billion, or 36%, of the entire annual revenue (projected at \$687 billion) of the so-called trust fund.  Being that he will ostensibly slash half of payroll taxes, that number is surely too low (as is the estimate for unemployment benefits).  So, Mr. President, if Social Security is really a pay-as-you-go system, how can you blithely raid the trust fund?  Answer: #PonziScheme. Look who wants to get rid of Social Security now.

Meanwhile, Obama has blown through the entire \$400 billion increase in the debt ceiling – in just one month.  The debt now stands at \$14.7 trillion.  The Senate voted down a resolution of disapproval tonight, paving the road for another \$500 debt increase.  Hey, what’s another \$447 billion among fellow socialists?

• jaykali

Spending now, ‘paying for’ over 10 years (backloaded of course in years 8-10).

So any type of cuts + tax increases would be spread over time. Tax increases might come immediately, certainly cuts would be spread out so they never actually happen.

The payroll tax cut is a bad idea. We can’t keep squeezing Social Security. It’s getting killed enough as is.

Here’s what I don’t understand. Why doesn’t the president go forward with a Tax Reform plan on his terms?

This is similar to how Republicans failed to pass any kind of sweeping health care reform (using conservative principles) and thus left a vacuum for a Democratic plan on THEIR TERMS.

The same logic applies here. We know there is bi-partisan agreement to lower rates across the board and eliminate loopholes. If the president came out in front for this it could happen. This would be a big bi-partisan job-creating type accomplishment. It’s politically popular. Why the H it isn’t getting done is beyond me. And it would satisfy the need for tax reform and be done on Democratic terms. I can promise that when tax reform actually does happen under Republican control here pretty soon that it will be much worse for Democrats in the sense that those evil Corporations (btw don’t Corporations employ people?) will get better tax rates and there will be worse cuts to capital gains that there would be now.

When a political party has a window to accomplish anything with ‘reform’ added to the end of it, they should take the opportunity, lest their opponents do it for them.

• JSobieski

You are right. We could some really good revenue neutral tax reform that would in reality, kick off some long term growth. However, he can’t/won’t do it without some blatant “balance” in the tax code.

• acat

Also .. how does he plan to get this recurring nightmare past the House?

Mew

• lastgopinillinois

to educate the American people about 0bamas proposal

Creating an “infrastructure bank.” Oh great…another liberal govt slush fund to benefit unions and further the goal of wealth redistribution and socialism. I smell more corruption brewing in this scheme.

Renewing payroll-tax cuts Short term schemes will not boost any confidence in the free-market. Economic growth requires a long term tax structure that business can plan hiring and expansion around. Sounds good to uninformed voters though…which is actually the main goal of offering this.

\$5000 new-hire tax credit New regulatory costs incurred by 0bamacare, Dodd/Frank financial deform and EPA “cap-and-tax” makes \$5000 look like a drop in a bucket. Worthless. Sounds good to uninformed voters though…which is actually the main goal of offering this.

Extending jobless benefits If the right policies were in place to boost the economy, unemployment would decline and you wouldnt need this. But we just have to offer it to prove that big brother will provide for the jobless. May score some points with uninformed voters.

tax credit for hiring returning veterans Again….short term….worthless. Again….right economic policies, shouldnt need this.

Ratifying pending trade deals By all means. Republicans have been trying to get this done since 111th congress. But 0bama has strategically held this back to use it as a boost for his 2012 campaign. 0bama, you stinker!

Providing aid for teachers Mr 0bama, please go back to school yourself beginning in 2012. Let State and local governments take care of their education system so we can get some creative, innovative ideas to improve education. But again, it campaign season, gotta show you care!

Job training for long-term unemployed We dont already have dozens of job training programs? More government redundancy. Matter of fact why dont you consolidate some of those programs, streamline them and save the taxpayers some money?

Funding school renovations So…you wanna use my tax dollars to renovate schools 1000 miles away from me? Education tax is by far the highest percentage of individuals local real estate tax bill. This should be kept at the local level where citizens have a better chance of keeping their school boards accountable for spending.

• http://redmeatconservative.blogspot.com/ Daniel Horowitz

and don’t forget about the teachable moment regarding their duplicity on Social Security. Unfortunately, it looks like some Republicans leaders are ready to cave on the payroll tax raid and unemployment welfare.

• jaykali

I suppose the president tries to balance by saying that the republicans are looking out for their so-called constituency, rich guys and wall street execs.

I think unions seem to think that average Americans are on their side. We’re not. Especially with these idiots they elect to lead them. The Trumpka’s and Jimmy Hoffas of the world are not sympathetic figures. They look and talk like thugs.

It seems obvious to those of us who pay attention that just ab everything that comes out of the white house is for unions. NLRB rulings, stimulus, trade-deals, health care – everything is catered for unions. But they are like what 8% of the private workforce? So the only so-called sympathetic figures are teachers and policeman/fireman, not all of which are unionized of course. I just think unions are dying, their only means of survival are through public unions and conservative governors are doing their best to neuter them.

I think reasonable people if they knew ab all these sweet-heart pension deals unions get from states/local govt and other sweet-heart goodies from the feds – I think they’d be more outraged. I don’t believe the average Joe thinks union people are the good guys at all.

• JSobieski

and his base needs to be fired up if he is going to have a shot.

• jaykali

But the issue as we all know, if you over-pander to your base then you lose independents which tend to move with public opinion. I just think he loses big time. He’s not going to gain any states in 2012, he will only lose states. And he’s way down in states like Pennsylvania that he has to win.

I don’t think Mediscare will work for Florida bc his own plan cut out \$500 billion from medicare for a new program so I don’t really see that argument working. I think he loses most of the swing states next time around.

• JSobieski

you are definitively out. When you play to the base in such a way, it is a sign of weakness. Just hoping other people don’t show up and vote isn’t much of a strategy.

Remember the bottom line of politics: both sides think the independents agree with them because in different elections, the independents have swung that way.

Just think about how many Reagan democrats voted for Obama in 2008. A lot of people. I know some folks who have voted for the winner in every election since 1976. Nobody at Redstate or the DailyKos really understands those folks There are different categories of independents, and must of the various categories are confusing.

• jaykali

I am tired of hearing how open minded independents are. They do decide elections though. I think they are generally results driven and less ideology-driven. I just think there’s no doubt that independents have gone away from the president in droves just like they did the Republican party in 08. I don’t think it’s unpredictable at all. In ’08 you had the public very war-weary and they also bought in to the fact that the economic crisis was all George Bush’s fault.

Fast forward to 2012, I think there’s no doubt that the stimulus + other policies were a complete failure to revive the economy. It’s been 3 years and all you have to do is look at the president’s own initial economic estimates that show that the economy is worse now that their projections said it would be WITHOUT stimulus. There is a mountain of evidence that says throw this guy out.

The only thing I think that could hurt the Republicans is getting into a personality war and being distracted from the core issues.

• http://impudent.edublogs.org/ kyle8

That I have noticed, and it is driven mostly by independents or people who belong to a party but are not fanatics for the party.

Here is how it goes. (1) A reform minded, fiscal conservative will get elected president and have some control of congress at least for a while.
(2) He will cause a big improvement in the economy and will enact some other reforms, or will do something in forign policy.
(3) Because of his accomplishments he will be followed in office by someone from his party who is NOT a fiscal conservative.
(4) This will cause all sorts of problems, the result is that the other party wins the next election.
(5) Now big government types are in charge and they bring things from bad to worse, they totally screw up the economy.
(6) Now the nation has to be saved by another reform minded fiscal conservative and the cycle begins again.

With only a few modifications, some part of this cycle has been repeated for at least 100 years and probably going back further than that. Guess what part of the cycle we are at right now?

• moosewing

The House should pass the infrastructure bank along with a complete repeal of Davis Bacon.

• bobojake

Citizens/voters/taxpayers are smarter then obama, reid, pelosi, schumer, kerry, murray, wasserman and teddy kennedy think they are. Teddy Kennedy is turning over in his grave for all of obamas’ FAILURES. Yes Teddy and you thought he was so bright but obama turned out to be just another democrat dim mirage.

• lastgopinillinois

in any democat proposal.
First, look at the name of the proposal; “American Jobs Act”
So that probabably means that the proposal probably does the exact opposite, or something completely different than what the name implies.
In this case, the Bill really should be named;
“The Double-dip Recession Avoidance Act”
The TRUE agenda; Spend whatever amount necessary to avoid a double-dip recession, while making the package SOUND like it will create jobs in an attempt to increase 0bamas chances of getting re-elected.
AGAIN, its all about the election. Most of the money spent on this stuff is wasted money and will not promote long-term job growth.
Republicans in office MUST prohibit the creation of this infrastructure bank (liberal slush fund), again lets call it by it’s true name.

• snowshooze

They will proudly proclaim they have put one over on Obama, and saved us 225 billion dollars ( Gosh aren’t we sly ) by meeting him only half-way..

• alkmetro

Strangely, ever since Obama’s speech, I have the desire to “pass” something……just couldn’t help my self here ,it is so pathetic.

• 1stRichard

Nationalized transportation, schools, homes, healthcare, banking and businesses, you should pass this jobs plan right away. Nationalized fairness and security and you should pass this jobs plan right away. Only taxing millionaires and billionaires isn?t political grandstanding and isn?t class warfare, and you should pass this jobs plan right away. This is simple math and you should pass this jobs plan right away.

The sum total seems to be pointing toward the Communist Manifesto, did I add this up properly? Lastly, you should pass this jobs plan right away.

• pantera

The house should pass the tax cuts separately then let the Senate pass a bill that zeros out the giveaways.

• chipbennett

Nevermind the lack of funding for the package (which is itself a rather salient point): how does this package, in any way whatsoever, actually create jobs?

Cutting the payroll tax doesn’t create jobs.
Extending unemployment benefits doesn’t create jobs.
Giving money to teachers’ unions doesn’t create jobs.

Refurbishing schools and vacant properties, and more infrastructure spending creates temporary, make-work jobs at best – and even then, only for one (heavily unionized) industry.

In short: nothing in this package has anything whatsoever to do with improving the economic climate in the country through reducing the over-burdening regulations, or to do with incentivizing companies to expand their labor force.

It’s simply more crony-capitalism spending.

• runner12

Nothing in this plan creates jobs. Nothing.

If Obama was really serious about improving the economy, he should allow the repeal of ObamaCare, get rid of onerous regulations, and permanently reduce or eliminate the corporate tax rate.

A study by Heritage was cited on Fox news today. It found that the country was beginning to come out of the recession until the passage of ObamaCare. In one fail swoop the Democrats ruined health care and the economy.

But we know none of this will happen under Obama. He will never abandon his neo-socialist, Keynsian policies.

• moosewing

The House should pass the infrastructure bank tomorrow, but add a complete repeal of Davis Bacon to it. Make the Senate vote against it.

• acat

(nothing further)

• conservativecurmudgeon

I agree with Acat! Like, hugely!

Davis/Bacon is why Michigan has roads that look like Iraq, and Tennessee’s are as smooth as a baby’s tookus.

• acat

that I was speaking of in our other conversation

If D.C. did not have the power to enact something like Davis/Bacon, then …

Mew

• http://travismonitor.blogspot.com Freedoms Truth

You dont create permanent jobs with a temporary tax cut.

If you really want to create jobs and if a payroll tax cut is the way to do it, Make it permanent.

but then you’d have the solvency of social security to deal with. …

This is all about putting the economy on a sugar-high next year and paying the piper down the road.

Despite the horrible bill, I am still for a bill that does EXACTLY what Obama wants, and then adds – Obamacare repeal, and a 18 month regulation moratorium.

• mystery

Maybe he plans on payin’ for this with all the monies being paid back by banks and auto companies …. or even all the monies that didn’t seem to go anywhere, but is still part of the figure we Americans are in debted for ….

• snowshooze

He can’t even figure out how to buy one.

Unless every penny of proposed new spending is offset by cuts (or new revenue) in the same fiscal year it is spent, Obama is just proposing to ignore the debt ceiling deal he made one month ago and spend as if his budget, which was rejected 97-0 by the Senate in February in a rare bipartisan gesture, had been passed anyway.

Other than that it is almost an exact repeat of the programs and promises made in 2009 for his first stimulus plan, which has been adjudged by economists not to have helped in measurable ways.

• ohiohistorian

Obama finally figured out that there is a number lower than a trillion. For him, this is fiscal responsibility. Unfortunately, the people who still believe in him (shrinking every day, fortunately) don’t want to understand that this is another “Wimpy” argument that Obama gave last night (I’ll gladly pay you Tuesday for a hamburger today). Can we just all agree that he is the Wimpy President?

• mirac777

There are several parts of this phony jobs plan ( cutting SSI revenue, which no one will alow) that appear to be in there to misdirect everyone’s attention away from the most dangerous parts, as in ANOTHER NATIONAL BANK. ( Democratic slush fund?)

That is the last thing we need, another Bank controlled by the tyrants of Congress and Obama.( or anyone else in government)

Beware of the misdirection folks. Watch the talking points of all the media “experts” today focus on the reduction in SSI revenue while not saying a peep about the tyrants making another bank to put YOUR money into. Just like we never got a real accounting of the \$800 B dollar stimulus scam, we will never know what this bank is doing with our tax dollars once again.

Would anyone here at RedState put their money into a bank and then have that bank tell you that they do not give statements about how much money you have in there and where the money that was taken out went?

Also the AP apparently has gotten their hands on parts of thisp lan ahead of time, and one write stated that the end of the Bush tax cuts ( which is just a TAX INCREASE ( disguised by a GWB bashing name) is a part of the plan once again. When the once proud conservative Speaker Boehner talks about working with Obama and the Lunatic liberals , is this Bohner moving to the left of center and allowing tax increases during this recession?

That leads me to my last observation on this so-called jobs plan misdirection: The big theme is tax cuts for everyone, mainly payroll taxes. And it will all be paid for so says Obama. That bunch of dogs simply willl not hunt. The Tyrants will raise taxes, one way or another. Big government will get even bigger. Just watch. If Boehner goes along with this garbage I want his head on a pike in 2013.

Oh and now they will pass another CR to fund the government for the rest of this year. Again with no budget which results in zero accountability as to whare our tax dollars are going.100% Taxation without representation is what we now have.

• mirac777

TYPO edit. Where our tax dollars are going.

• ihateliberals

The only way he can pay of rit is to borrow more money form China. Nothing he has proposed will necessarily create jobs. for example the infrastructure \$50 Billion. at most that may create 75 – to 100 projects. Now he has to get EPA approvals to even start them and when if ever the EPA does give the go ahead a majority of the labor will be illegals that will get paid under the table and not pay taxes either. Money proposed for education is just another payoff to the NEA. This will produce nothing. Ninety percent of the things listed wont produce a single America job. Giving tax breaks to companies without specifying they are for hiring and utilizing American Citizen’s in America won’t do one thing for the economy or jobs. it’s the same for all of his proposals. they are merely a smoke screen to keep the Republicans busy until the 2012 elections.

• lizaz

If the Reps don’t pass everything he “proposed” (again), they will subsequently be blamed for whatever continues to be wrong with the economy. Of course, if by some miracle things improve, the man will take all of the credit!! You can’t win, except at the election in NOV 2012…let’s hope he’s packing up by then!!