Barack Obama: Leader of the ‘budget tenthers’

It appears there’s a new kind of “tenther” in town. Not the kind who believes that the Tenth Amendment to the U.S. Constitution means just what it says, and should be enforced accordingly, but the kind whose big deficit-closing ideas amount to tenths of a percentage point of the problem.

The “budget tenther” in chief? Barack Obama. As Bloomberg reports:

President Barack Obama’s proposal to end a tax break for corporate jet owners, a repeated refrain in his news conference yesterday, would achieve less than one-tenth of 1 percent of his target for reducing the federal deficit.

Changing the provision would put $3 billion into the Treasury over a decade, said two congressional aides familiar with the proposal. Democrats want to require companies that use jets for business purposes to write off the cost over seven years, instead of five years allowed under current law, said a congressional aide and a White House aide. Airplanes used for charter or commercial flights already must be depreciated over seven years.

Obama mentioned the corporate jet break six times, criticizing Republicans’ unwillingness to include tax increases in legislation to raise the federal debt ceiling. Republicans are pressing for spending cuts in the measure, which must be passed before Aug. 2, when the Treasury Department projects the U.S. will no longer be able to meet its debt obligations.

All told, the tax breaks on corporate jets (which Democrats included in the 2009 stimulus), oil and gas companies, and hedge fund managers would, by one estimate, generate $64 billion in new revenues during the next 10 years — $6.4 billion a year on average, or a whopping four-tenths of 1 percent of what have become annual budget deficits of $1.5 trillion.

A tenth here, a tenth there — pretty soon, you’re talking about an entire percentage point!

It’s no wonder Obama thinks Congress — which really means “congressional Republicans”; don’t be fooled into thinking he’s taking Harry Reid and Chuck Schumer to task just as much as John Boehner and Paul Ryan — should take the lead on the budget issue. At his “budget tenther” rate of progress, the debt ceiling compromise could be hammered out by Aug. 2 … sometime in the 2030s.

On the debt ceiling, it seems, Obama is just as serious as ever.

– By Kyle Wingfield

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124 comments Add your comment

Kyle Wingfield

June 30th, 2011
12:03 pm

Btw, as I’ve said before, I’m fine to include these tax breaks, subsidies and loopholes with all the other ones and get rid of the lot, and then lower tax rates across the board.

Kyle Wingfield

June 30th, 2011
12:03 pm

But that’s not what the president was getting at.

Joe The Plumber too.

June 30th, 2011
12:08 pm

barry the boy blunder prepares for yet another vacation in the jet of all jets and talks about the evil rich in their private jets. Priceless. If that is the best the fools writing for his teleprompter can come up with I predict a very embarrassing beating next year in the debates with Rick Perry. I think the only thing worse will be if joey biden doesn’t tuck tail and decides to attempt to debate Marco Rubio. Eighteen more months until A Change Productive Americans Can Believe In transpires.

rightwing troll

June 30th, 2011
12:11 pm

So, I guess we simply don’t need those 6.4 billion a year in savings?

rightwing troll

June 30th, 2011
12:12 pm

“Eighteen more months until A Change Productive Americans Can Believe In transpires.”

What happens then?

rightwing troll

June 30th, 2011
12:13 pm

Change for the sake of change is not necessarily always for the better, I’d really like to know what happens after this “change” you look forward to. Do you know?

Dave R.

June 30th, 2011
12:19 pm

OK, that’s funny as hell, Kyle!

Well played, sir. :lol:

Lefty

June 30th, 2011
12:22 pm

When liberals and conservatives alike wished aloud that Barack’s Teleprompter would tell him to get involved and force Congress to wrap up the budget bickering sessions, I somehow doubt another chorus of the Private Jet Refrain was what they had in mind. I think everybody realizes it’s a red herring at this point, guys. Stick to the plot.

It seems like every time Barack tries to respond to the public with what he thinks they want, he ends up dumping a truckload of FAIL on his own head (not to mention all of ours) instead.

Aquagirl

June 30th, 2011
12:24 pm

Oh good lord. The Republicans nearly shut down the government over $70 million for Planned Parenthood. Sorry, Kyle, Republicans win the pound foolish award.

Cutting idiotic corporate tax subsidies might bring a few CEO’s in contact with the real world. That could save more money than the actual cut itself, if their fat heads no longer think they’re worth multimillion packages for running our economy into the ground.

DebbieDoRight

June 30th, 2011
12:27 pm

Kyle: All told, the tax breaks on corporate jets (which Democrats included in the 2009 stimulus), oil and gas companies, and hedge fund managers would, by one estimate, generate $64 billion in new revenues during the next 10 years

Nice job Kyle — however, you failed to point out one wee little thing in your diatribe against Obama — like this fact right here (about a third of the page down):

Obama mentioned corporate jet owners along with oil companies and hedge fund managers as those who should pay more taxes, setting them in opposition to recipients of college scholarships and medical research grants who could stand to lose benefits under Republican-sponsored budget cuts.

It seems it’s o.k. for the repubs to to cut out College Scholarships and Research grants for people, but lord FORBID that Obama should mention that if the repubs were truly serious about cuts, they’d cut some of those oil subsidies, etc. out!!!

BTW Kyle the Democrats included into the 2009 Budget because the repubs refused to allow Extended Workman’s Comp benefits without it!! I’m amazed you forgot about that. /shock/

Jimmy62

June 30th, 2011
12:27 pm

I don’t know what the solution to all this is. I know it will include large spending cuts, large entitlement cuts, and at some point there will have to be some tax increases.

And I know one more thing… If we want to fix this, just about everyone is going to have to do more with less, which means it WILL hurt people. But it’s going to hurt a lot more people a lot worse if we don’t make some hard decisions, and soon. Doesn’t matter what party you are with, if you’re not going to get serious then you are part of the problem, and rhetoric that amounts to telling people we can fix this by raising taxes on corporate jet owners only serves to convince people that we don’t need to make some real serious decisions and some hard cuts to fix this. And for that reason alone most of Obama’s deficit speeches are counter-productive at best.

ByteMe

June 30th, 2011
12:28 pm

But that’s not what the president was getting at.

And isn’t that the point? You — and Bloomberg — are trying to take it literally instead of appreciating the way he’s trying to draw lines in the sand that appear reasonable to the average person… instead of the lines currently being drawn by the Republicans, which the average person won’t accept (i.e., big cuts to SS or Medicare/Medicaid). It’s political theater and we all know the Addams Family is real life, right?

CJ

June 30th, 2011
12:29 pm

I understand that Obama and the Dems are trying to include $400 billion in additional revenues in the deal…not $3 billion. Something like $1 in revenues for every $4 or $5 in cuts? The corporate jet tax break is but one illustration of the kinds of items that Republicans refusing to agree to.

There are plenty of cuts that the GOP has proposed to specific programs for the poor and middle class that, individually, amount to less than $3 billion. Is the suggestion here that any line item that doesn’t add up to more than $3 billion should be ineligible?

DebbieDoRight

June 30th, 2011
12:30 pm

That sentence should’ve read:

BTW Kyle the Democrats included the “tax breaks for corporate jets” into the 2009 Budget because the repubs refused to allow Extended Workman’s Comp benefits without it!! I’m amazed you forgot about that.

And here’s the shocked! emoticon – :shock:

Kyle Wingfield

June 30th, 2011
12:37 pm

No, CJ, the suggestion is that if Obama were being serious about the debt ceiling rather than transparently demonizing the other side for political gain, he would have mentioned the proposals that actually make a dent in the deficit rather than those that play well to his base.

At least ByteMe recognizes the press conference for the political theater it was. Rather than, you know, some semblance of leadership.

Kyle Wingfield

June 30th, 2011
12:45 pm

Debbie: I’d love to see a source for your claim about the jet tax break and unemployment benefits. Especially since the tax break was part of the 2009 stimulus, not the 2009 budget.

Lil' Barry Bailout

June 30th, 2011
12:49 pm

Halperin was right.

CJ

June 30th, 2011
12:57 pm

Obama did mention proposals that actually make a dent in the deficit, but you have to add them together. Actually, more like a ding than a dent since this deal is not addressing the real cause of the financial pain in our future, the cost of health care.

rightwing troll

June 30th, 2011
1:03 pm


As usual no one can answer a simple straight forward question.

What exactly will change when you get Obama removed?

Carlosgvv

June 30th, 2011
1:21 pm

Kyle, this is totally misleading, and you know it. The Republicans are saying they will not support a tax increase. Obama is pointing out that the “tax increase” they refer to is actually tax breaks now in place for the very wealthy. Obama proposes to end these tax breaks and Republicans call that a tax increase. Obama never said eleminating these tax breaks would solve all our Country’s financial problems.

Derek

June 30th, 2011
1:23 pm

Both parties are correct in some aspects and completely ignorant in others. The tax hikes for the extremely wealthy are not a request from democrats but a demand from the nation’s majority. Cutting fruitless spending is not just a republican theme, it is the practice of finance managers everywhere. You people need to get off your party wagons and make some decisions for your self, the ignorance of affiliation is becoming the nations down fall.

that's goofy

June 30th, 2011
1:23 pm

I will not pay more taxes for my private jet! Although I currently don’t have a jet now – I might get one and I don’t want the Man taxing me.

ByteMe

June 30th, 2011
1:31 pm

Rather than, you know, some semblance of leadership.

In politics, theater is the way you move the ball in your direction. In business and dictatorships you can make demands and expect everyone else to go along. In politics, you have to convince enough people that your approach is more reasonable than your pathetic childish opposition. Theater is one of the best ways to do that.

You think it’s leadership to walk out of negotiations… or political theater? I say it’s the latter.

“Leadership” is what they call it when you get what you want. But you don’t always get there without a little theater and salesmanship.

CJ

June 30th, 2011
1:35 pm

Okay, I’ve looked around, and here’s I’ve confirmed that the Obama administration had agreed to a deal to reduce the deficit by $2.4 trillion–$2 trillion in spending cuts and $400 billion in tax increases. So, spending cuts amount to about 83 percent of the total with revenues amounting to about 17 percent.

Republicans say no. No to ending tax cuts for jets. No to ending subsidies to oil companies. No to ending tax breaks for hedge fund managers. No to revenue increases that would make up about 1/6th of the total package. To protect these tax breaks, it seems that the GOP is willing to throw us into a global recession.

Kyle Wingfield

June 30th, 2011
1:39 pm

CJ: Taking your figures as correct, I think the bigger objections are to the other $338 billion in tax increases — the ones Obama didn’t want to explain during Masterpress Theater yesterday.

Kyle Wingfield

June 30th, 2011
1:40 pm

ByteMe: Those are fair points, but again — he was offering a false sense of what his “approach” is. In sales, I think that’s called a bait and switch.

Dmorris Engage America

June 30th, 2011
1:45 pm

What will help shrink the deficit and pay off the national debt is removing the loopholes in the tax code that allow for some of the largest corporations, with the largest profit margins, to escape paying income taxes.

It is important to note that most U.S. companies do pay their income taxes. In fact, a study done by The Business Roundtable shows that the average company based in the U.S. pays an effective tax rate of around 27%. (http://scr.bi/ldGkg4) The corporations that can afford to hire accountants to help them find the loopholes are the ones that get away without paying the government taxes.

If GE had paid 27% of its 10.8 billion profit in taxes to the government this past year the U.S. would have been able to shrink the deficit by almost 3 billion dollars. (http://bit.ly/m3nyeb) That is money the government cannot afford to lose.

CJ

June 30th, 2011
1:53 pm

More details: http://nation.foxnews.com/politics/2011/06/27/obama-pushing-400-billion-tax-hike#ixzz1QmbmxolL

“The White House is pushing for some tax increases on the wealthy or the elimination of tax breaks for big companies and wealthy individuals as part of a deficit-cutting plan. During the Biden-led negotiations, Democrats proposed about $400 billion in additional tax revenue, including ending subsidies to oil and gas companies, an idea that has failed previously in the Senate.

The administration also would tax private equity or hedge fund managers at higher income tax rates instead of lower capital gains rates, change the depreciation formula on corporate jets and limit itemized deductions for wealthy taxpayers. It also has called for repealing a tax benefit for an inventory accounting practice used by many manufacturers.”

Kyle Wingfield

June 30th, 2011
1:59 pm

CJ: “More” details? You just put the same details we’ve been discussing in a different order — well, you did add the inventory accounting practice.

What you didn’t C&P from the article — and what is more representative of the kind of tax hikes that would bring in $400 billion but which Obama doesn’t want to discuss during a press conference — was this part:

“Obama’s budget wants $85 billion in new user fees over 10 years, including raising the airline passenger security fee from a maximum of $5 per one-way trip to $11. Other proposals range from Food and Drug Administration food inspection fees to duck hunting fees.”

In other words, Obama understands there’s more money to be made from fees on middle-class Americans flying on airplanes and going duck hunting, etc., than from those greedy oil companies and jet owners.

ByteMe

June 30th, 2011
2:02 pm

$338 billion in tax increases — the ones Obama didn’t want to explain during Masterpress Theater yesterday.

Similar to both sides not wanting to talk about exactly where they’re agreeing to get rid of $2T in spending. You don’t tip your hand to the fullest extent until you have a deal and everyone can go hand-in-hand off the same cliff. Again, that’s politics when you have to deliver bad news. You know that, so this fake poutrage is silly.

The administration also would tax private equity or hedge fund managers at higher income tax rates instead of lower capital gains rates

THAT! Since when is the profit from money invested supposed to be taxed less than the profit from back-breaking labor??

ByteMe

June 30th, 2011
2:07 pm

Obama’s budget wants $85 billion in new user fees over 10 years, including raising the airline passenger security fee from a maximum of $5 per one-way trip to $11.

How much does the TSA and FAA cost per passenger flown? Serious question, just wondering if anyone knows.

griftdrift

June 30th, 2011
2:52 pm

Does this mean you guys will leave NPR alone?

John

June 30th, 2011
3:05 pm

Kyle, did you criticize the Republicans when they talked about cutting spending by cutting their budget and how little impact that would have.

Dave R.

June 30th, 2011
3:07 pm

“It seems it’s o.k. for the repubs to to cut out College Scholarships”

Well, the world needs ditch diggers, too!

” and Research grants for people,”

OK, cut out every research grant for those global warming charlatans.

Dave R.

June 30th, 2011
3:08 pm

“What exactly will change when you get Obama removed?”

My hard liquor bill will go up for a few days, then decrease dramatically after that. :D

griftdrift

June 30th, 2011
3:18 pm

Seriously Kyle. You are going to seriously criticize Obama for one press conference where he detailed some relatively minor elements of the budgets, after a decade of your friends convincing the public (to the tune of 22% of people really believe this) that PBS is one of the reasons we have a deficit?

22% think the Corporation of Public Broadcasting consumes 10% of the federal budget. It’s actually about .01%

But Obama is the leader of the “tenthers”?

Puhleeeeze.

clanmack

June 30th, 2011
3:18 pm

It is clear from all fronts: Republicans disguise their protection of the high income (top 10%, top %%, top 1% ?) and big corporations (see Supreme Court decision last year-you know the one) as opposition to “tax increases.” Pshaw, Pshaw! They have shot themselves in the both feet already and keep aiming higher up on their own bodies, the more they resist the idea of revoking tax breaks. You can quibble over $3B or $6.4B as insignificant all you want to. It is just a distraction to keep from holding Republicans’ feet to the fire. If they go their way, the rich don’t contribute or “suffer” to the debt crisis solution, it will be solved on the backs of the 90% of us who can’t buy access to politicians. How is that for wealth distribution?

John

June 30th, 2011
3:19 pm

Laura Ingraham tried to make the same case yesterday on Fox’s “he O’Reilly Factor” yesterday with conservative economist Ben Stein. She tried to use the same logic here, that is not much money and other conservative talking points like it’s their money, we have a spending problem, etc. and he shot her down on all of it.

STEIN: …everyone except — everyone except me is rich and so do you and you know very well that if you raise their taxes, if you put a surcharge of 10 percent or 15 percent on their taxes they would still be rich. They would still be able to have families. They would still be able to send their children to…

INGRAHAM: What else will they do? Right, but what else – well…

STEIN: They won’t do anything bad. They will just pay more taxes and we’ll have a lower deficit.

INGRAHAM: No, no — do you — do you not agree that when you tax the rich you ultimately end up over time reducing much of the revenues that would come in for their spending that they make, their hiring and companies where they hire. I mean, a lot of this also is small business owners.

STEIN: No, I don’t agree with that. I — I don’t agree with you, with all due respect.

INGRAHAM: Well — that they spend less?

STEIN: You are a woman of — well you’re a woman of extraordinary intelligence but the data is very clear that we had higher rates of economic growth in the 40s, 50s, 60s and 70s when we had higher taxes. The era of very low Bush 43 taxes has correlated with a low period in productivity growth and a low period of economic growth. You cannot correlate low taxes with high productivity. It just can’t be done.

INGRAHAM: One has nothing do to with the rest. Here’s what…

STEIN: Yes it does.

INGRAHAM: Here is what — here is what we do know.

(CROSSTALK)

INGRAHAM: Ben, Ben, shouting doesn’t make your point anymore legitimate. In December…

STEIN: Yes it does. That’s — that’s — then that’s the point. That’s the point. Well, it doesn’t make your point either.

INGRAHAM: I’m not shouting. I’m actually just trying to ask a question. In December, the president and the Democrats decided to extend the Bush tax cuts. They understood that during a failing economy, a weak economy, a weak recovery, you couldn’t raise taxes. By all accounts, the economy is growing at a slower rate than it was even in quarters last year, at about two percent this next quarter, 1.9 percent last quarter. If it wasn’t good to do in December, why is it good to do now?

STEIN: There is no data, my friend, correlating lower tax rates for the rich with higher economic growth. We had our maximum periods of economic growth in this country…

INGRAHAM: No, you have to cut spending too, right.

STEIN: …in the entire century, the 20th century when we had very high rates of taxes on the rich. I’m not saying that’s a great idea and I don’t look forward to higher rates of taxes on the rich. But you cannot say that higher rates on the rich are a bad thing in terms of economic growth. That’s just — the data just isn’t there, Laura.

INGRAHAM: Well, Ben, Ben…

STEIN: I wish it were there. It’s just not there.

Rob Woodall Has Always Gotten His Healthcare for Free (but Paid By You), Yet he wants your grandparents to forgo food to pay out from their fixed income for healthcare

June 30th, 2011
3:28 pm

Trickle down economics is a myth and seemingly intelligent people on the right have been selling that snake oil forever.

Ben Stein is telling the hard truth.

John

June 30th, 2011
3:44 pm

Kyle, instead of using a report which cite 2 unnamed congressional aides, which I’m sure are Republican aides, can you name any well know respectable economist who also claim revenue increase needs to be off the table?

While you’re at it, can you explain how the Ryan Medicare plan would have an immediate impact on the deficit when it would be over 11 years before it takes effect? Republicans believe the deficit is so bad, we need to reduce it right away. At least Democrats’ plan to increase revenue would have an immediate impact.

booger

June 30th, 2011
3:53 pm

I was in the much hated oil industry, and the oilfield services company I worked for had four jets and two props planes. Over 90% of the hours flown were to deliver tools and engineers to remote well sites where commercial flights were not available. The oil industry I guess was short sighted and didn’t think to drill all their wells near commercial airports. Further studies of the entire use of corporate air found that a full 70% of the usage was to transport engineers and middle managers to remote work sites. The idea that Jets are used for the leisure of the big brass is pure folly.

It’s also intresting that Obama can’t think of a thing to cut except scholorships, food inspectors and medical research.

This admin. has shown it has no will to face reality and stop spending, and this showdown is just the time to hold their hand to the fire. I has to be done.

Joe The Plumber too.

June 30th, 2011
3:55 pm

sorry rightwingnut, had to go be a productive American and recharge some ebt cards for bedwetting voters. What will change after the clown and his merry band of fools depart, first change will be leadership, which will be a welcome change since at that point we will have been four years without it. Then we will see growth in the economy and jobs. As barry the boy blunders favorite tax cheat said last Sunday, if it comes down to raising taxes on small business or cutting government, raising taxes wins. As a small business owner, I’ll be damned if I’ll hire as long as that group of idiots run things.

Lil' Barry Bailout

June 30th, 2011
3:59 pm

“What exactly will change when you get Obama removed?”
——

The federal government will stop actively working to destroy the economy and the dollar.

Oh, and Americans will have their country back.

GW

June 30th, 2011
3:59 pm

The Bush tax cuts for the wealthiest will end in 2012 and that will contribute to reducing the deficit. After that, we need to cut the DoD budget by ten percent per year for the next ten years. Then, we need to phase out all corporate subsidies. We can examine our progress at that point.

GW

June 30th, 2011
4:09 pm

If Obama is talking about new and/or increased FEES (rather than taxes), then he’s more Republican than I ever gave him credit for before. That’s the sort of talk that even Norquist could go for. After all, shouldn’t users of airport security be required to pick up the bulk of the cost, etc., just like park users, etc. Kyle, you should be praising such talk. By the way, what do you think about a blog posting fee.

Ayn Rant

June 30th, 2011
4:10 pm

Eliminating preposterous tax favors, like the “carried interest” sham, and outrageous subsidies, like the corn/ethanol fiasco, is the logical first step to cutting the federal deficit. That’s the “low hanging fruit” that can be harvested with little effort.

USA Today identifies $400 billion per year of utter silliness that could be eliminated. See: <>

Dogmatic Republicans oppose revenue increases and protect non-beneficial subsidies. They are not serious about deficit reduction, and have nothing useful to contribute to the monumental task of economic recovery.

Deficit reduction will be mired in posturing and squabbling so long as Republicans constitute 1/3 or more of the members of either branch of the Congress.

Ayn Rant

June 30th, 2011
4:12 pm

John

June 30th, 2011
4:15 pm

“The federal government will stop actively working to destroy the economy and the dollar.”

By that, do you mean the Republicans who are willing to sacrifice our country to try to ensure Obama is a 1 term president? You remember Mitch McConnell saying that’s the single most important thing. Republicans have been willing to shut down the government and now default on our debt just to protect millionaires and billionaires. A bipartisan commission as well as economists on both the left and they right all say revenue increases must be part of solving the deficit problem but when they came up in Joe Biden’s group Republicans just walked out…like they’ve been doing since Obama became President and then they complain we have lack of leadership. Can’t lead those who are unwilling to be led.

CJ

June 30th, 2011
4:15 pm

Kyle @1:59,

I didn’t paste the part you indicated because of this line: “While [Republicans] are insisting there be no tax increases, they have been willing to consider other forms of revenue, particularly higher user fees.”

Admittedly, the piece was poorly written. It first said that Obama’s budget wants $85 billion in new user fees. It then added that the “$85 billion also includes federal auction of parts of the broadcast spectrum and the sale of surplus federal property.” Confusing.

Are we debating, when we actually agree? Are you on board, for example, with eliminating subsidies for oil companies, personal jets, etcetera. As I recall, you recently argued that tax credits, deductions, loopholes are but another form of government spending.

Kyle Wingfield

June 30th, 2011
4:16 pm

CJ: See my comments at 12:03.