The Facts He Forgot...Reviewing the President's Debt Limit Address
Tuesday, July 26, 2011
President Obama skirts responsibility for his out-of-control government spending. “The deficit was on track to top $1 trillion the year I took office.”
- The deficit in 2008, the last year before President Obama took office, was $458.6 billion.
- The projected deficit for 2011 is $1.5 trillion.
- This year’s deficit is projected to be 323 percent higher than the nation’s deficit in the last year before President Obama took office.
- The President’s budget request for FY2012 would lead us to the highest ever budget deficit, $1.6 trillion.
The President asks everyone to sacrifice by accepting job-killing tax increases. “This balanced approach asks everyone to give a little...”
- Even the Senate Democrats’ proposal, which the President endorsed, rejects tax increases.
- A majority of Americans oppose including any tax hikes in the debt deal, according to a Rasmussen poll.
Under the President’s approach he states “[T]he 98 percent of Americans who make under $250,000 would see no tax increases at all.”
- With unemployment stuck at over 9 percent, President Obama has already signed into law over $685 billion in gross tax increases, $333 billion of which don't exempt the very middle class families the President claims to be protecting.
- Despite his rhetoric, it is employers and employees who will be hurt the most by the President’s tax increases. Under the President's preferred approach, approximately 50 percent of small business income would be subjected to a tax increase.
President Obama claims that his tax hikes will only affect the “wealthiest Americans and biggest corporations,” who he believes are not “paying their fair share.”
- The top 1 percent of Americans pays 38 percent of all federal personal income taxes.
- The top 5 percent of Americans pay 59 percent of federal personal income taxes.
- The top 10 percent pay 70 percent of federal personal income taxes.
- A recent report from the Joint Committee on Taxation found that the majority of Americans pay no federal income taxes.
- Even if all income over $250,000 is taxed at a 100 percent rate, it would still be $200 billion short of the massive $1.6 trillion deficit proposed by the President for fiscal year 2011. The problem is not that Washington taxes too little, it is that it spends too much.
The President’s demand for a 2-year debt limit increase is abnormal. He also fails to note that the overwhelming majority of debt limit increases have been short and often tied to spending reforms to produce fiscal accountability when saying, “In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it.”
- Over the last twenty-five years, Congress and the President have acted 31 times to increase the debt limit. 22 of those 31 times were for less than a year. Only three of those 31 increases lasted longer than 2 years.
- Historically, debt limit increases are tied to spending reforms, often preceded by very short-term increases. Three examples of that include:
- 1987: Three short-term debt limit increases prior to a longer-term increase that included deficit targets and automatic sequestration provisions.
- 1990: Six very short-term increases prior to a longer-term increase that included PAYGO, discretionary caps, and other programmatic changes.
- 1996: Two very short-term increases to ensure full funding of Social Security and other Federal funds prior to a longer-term increase included in the “Contract with America Advancement Act.”