Limbaugh Doesn't Realize That Obama Has Proposed Polices For Economic Growth And Debt Reduction
Research ››› ››› ANDY NEWBOLD & THOMAS BISHOP
Rush Limbaugh challenged his audience to provide him with evidence that President Obama has formulated policy that would lead to economic growth or debt reduction. In fact, Obama has laid out several policies that would create economic growth and reduce the federal deficit.
Limbaugh Falsely Claims Obama Has Not Introduced Policies For Economic Growth And Debt Reduction
Limbaugh: "Show Me The Evidence ... That Barack Obama Is Interested In Economic Growth The Way You And I Understand It." Rush Limbaugh argued in the November 29 edition of his radio show that Obama isn't interested in economic growth "the way you and I understand it" and challenged "anyone" to show him where "Obama has introduced policy or made statements that would successfully reduce the annual budget deficit." From the show:
LIMBAUGH: Would somebody show me the evidence in the first term that Barack Obama is interested in economic growth as you and I understand it? I'm serious, I -- don't misunderstand, my passion here is not anger. I'm not angry at anybody I'm just looking and I'm listening to all this and I -- before the election if you don't recall, the learned figures like F. Chuck Todd and others in the drive by media talked about Obama has not really put forth a plan to deal with the debt. Well there's a reason, he doesn't have a plan to deal with the debt because his only objective with the debt is to not worry about it.
Can somebody explain to me, can somebody show me where Obama has at any time formulated policy or made statements that would successfully reduce the annual budget deficit or the overall national debt? It's just the opposite. Everything Obama is doing, everything he has done, everything he says he wants to do, everything he proposes will grow the debt. Everything. That reality's right in front of our face. That reality, by the way, was approved of by the American people who voted, a majority of the people in this country, who voted, reelected Barack Obama on exactly this premise. Do not believe that the people who voted for Obama were fooled. Just like it'd be a mistake to believe that the people in California who voted to raise taxes on themselves are fooled. They aren't. They are voting for what they want.
So did the people who voted in the presidential race a few weeks ago, the majority of whom voted for what they want. They are voting for a country to be transformed and changed to where the government is the primary source of wealth and prosperity, or survivability. However you want to describe it. [Premiere Radio Networks, The Rush Limbaugh Show, 11/29/12]
In Fact, Obama Has Laid Out An Economic Agenda Economists Say Will Help Grow The Economy And Create Jobs
Obama Has Proposed Public Sector Investments And Small Business Tax Cuts, Which Would Boost Employment And Grow The Economy
Obama Has Proposed The American Jobs Act, A Package Of Tax Cuts And Investment To Create Jobs. The American Jobs Act, legislation proposed by President Obama, combines investments in infrastructure with targeted tax cuts designed to benefit small businesses and create jobs. [White House, 9/8/11]
Mark Zandi: American Jobs Act Would Add Nearly 2 Million Jobs. Mark Zandi, chief economist at Moody's Analytics, estimated that the American Jobs Act would increase employment by nearly two million jobs, cut the unemployment rate by a full point, and increase the size of the economy by 2 percent. [Moody's Analytics, 9/19/11]
Economic Policy Institute: American Jobs Act Would "Increase Employment By About 4.3 Million Jobs." On the Economic Policy Institute (EPI) blog, EPI research and policy director John Irons provided a "preliminary breakdown of the package and a first pass look at the job impact" of Obama's jobs plan:
Overall the package would increase employment by about 4.3 million jobs over the next couple of years. The new initiatives would boost employment by about 2.6 million jobs, while the continuation of the two temporary provisions (EUI and the payroll tax holiday) would prevent a backslide of over 1.6 million jobs. [Economic Policy Institute, 9/8/11]
Obama Has Proposed To Invest In Infrastructure, Which Will Boost Economic Growth
Obama Has Proposed Several Policies Designed To Increase Investment In Infrastructure. In a March 23 report, the Council of Economic Advisers (CEA) noted that President Obama's budget included "a bold new plan to renew and expand America's infrastructure" including the creation of the National Infrastructure Bank. From the CEA:
President Obama's FY 2013 Budget proposes a bold plan to renew and expand America's infrastructure. The plan includes a $50 billion up-front investment connected to a $476 billion six-year reauthorization of the surface transportation program and the creation of a National Infrastructure Bank. In support of this commitment, the Department of the Treasury, with the Council of Economic Advisers, has updated our analysis of the economic effects of infrastructure investment. [Council of Economic Advisers, 3/23/12, via the Treasury Department]
CEA: Research Shows A Strong Link Between Infrastructure Investment And Economic Growth. A Council of Economic Advisers report noted that research found a direct link between public infrastructure and economic growth with public works having "higher returns than private capital investment." [Council of Economic Advisers, 3/23/12 via the Treasury Department]
EPI: Infrastructure Spending Good For Short- And Long-Term Growth. A report by the Economic Policy Institute on infrastructure investment stated that it is "the most efficient fiscal support one can provide to a depressed economy -- a finding supported by nearly all macroeconomic models and forecasts. Further, public investment provides a long-term growth payoff as well as a near-term boost to the job market." [Economic Policy Institute, 4/18/12]
Obama Has Proposed To Extend Payroll Tax Cuts, Which Would Reduce Unemployment
Obama Has Proposed Extending Payroll Tax Cut Into 2013. The Treasury Department's explanation of the Obama administration's fiscal year 2013 revenue proposals included a recommendation to extend the holiday on payroll taxes by 2 percent:
The Administration proposes to extend the 2.0 percentage point reduction in the Social Security tax on employees to the first $110,100 of taxable wages and salaries received during 2012. Similarly, the Administration proposes to extend the 2.0 percentage point reduction in the Social Security tax on the self-employed to the first $110,100 of taxable self-employment earnings received during 2012. The Social Security Trust Fund will be held harmless and receive transfers from the General Fund equal to the reduction in payroll taxes attributable to these reductions in the payroll tax rate.
The proposal would be effective upon the date of enactment. [Treasury.gov, accessed10/16/12]
Economist Robert Frank: "Perhaps The Most Promising" Policy To Reduce Unemployment "Is A Payroll Tax Holiday." In a June 25, 2011, New York Times op-ed, Cornell University economics professor Robert Frank wrote that extending the payroll tax holiday is "perhaps the most promising" policy to reduce unemployment. [The New York Times, 6/25/11]
Former Council Of Economic Advisers Chairwoman: Jobs Plan Should Include "At The Very Least" An Extension Of "The Temporary Payroll Tax Cut For Employees." In a September 6, 2011, post in The New York Times' Room for Debate blog, University of California, Berkeley professor and former Council of Economic Advisers chairwoman Laura Tyson called for extension of the payroll tax cut as one measure that could "increase private spending and promote job creation." [The New York Times, 9/6/11]
Obama Has Proposed Numerous Other Policies For Boosting Employment And Growing The Economy
Obama Administration's National Export Initiative On Track To Double Exports By 2014. After proposing the National Export Initiative in his 2010 State of the Union Address, exports have increased by 16% and the initiative is on track to double exports by the end of 2014. From a White House post by Export-Import Bank Board of Directors member Patricia Loui. [White House, 3/13/12]
Obama Has Proposed Extending Exclusion From Income To Certain Home Mortgage Debt. Obama's fiscal year 2013 budget proposal calls for the extension of a clause that excludes certain types of debt from gross income. The type of debt excluded primarily deals with acquisition or construction on homes, a measure designed to boost home values. [Treasury.gov, accessed 11/30/12]
White House Sent "Startup America Legislative Agenda" To Congress To Benefit Startup Businesses. The Obama administration proposed the Startup America Legislative Agenda to benefit startup and small businesses. According to the White House's fact sheet, the agenda "builds on the President's record of signing into law 17 tax breaks specifically for small businesses." [White House, Startup America Legislative Agenda, accessed 11/30/12]
White House Budget Overview Includes $140.8 Billion For R&D Overall And "Expands And Makes Permanent The R&D Tax Credit." President Obama has proposed expanded funding for research and development, including increased investment in non-defense and manufacturing R&D. [Office of Management and Budget, accessed 11/30/12]
White House: "Obama Administration Takes Immediate Actions To Help Small Businesses" With New Markets Tax Credit. President Obama has introduced the New Markets Tax Credit which would "make it easier for small firms to access loans and tax credits." [White House, 7/11/12]
Obama's New Markets Tax Credit Would Provide "$2 Billion In Credits For Qualified Investments."According to the president's 2013 budget, the New Markets Tax Credit would provide $2 billion in tax credits over the course of three years. [Treasury.gov, February 2012]
The Obama Administration Has Proposed Several Targeted Tax Relief Proposals. According to the Treasury Department, in his 2013 budget, released in February 2012, President Obama proposed several more policies designed to promote economic growth. Among these are policies such as:
- Temporary 10-Percent Tax Credit For New Jobs And Wage Increases. The Obama administration proposed creating a tax benefit for employers who invest in wage increases or creating new jobs.
- Extend The American Opportunity Tax Credit. President Obama proposed expanding the American Opportunity Tax Credit, which increases the affordability of college for low- and middle-income families.
- Expand The Earned Income Tax Credit For Larger Families. President Obama proposed making the expansion of the Earned Income Tax Credit for larger families permanent. The credit provides tax incentives for low-income, working families.
- Provide Tax Incentives For Locating Jobs And Business Activity In the United States. The Obama administration proposed creating a new business credit for companies that move a business or jobs into America from an outside nation.
- Double The Amount Of Expensed Start-Up Expenditures. Obama proposed increasing the tax deduction start-up businesses can claim in order to create new business activity.
- Create Growth Zones To Encourage Economic Development In Specific Geographic Regions. The Obama administration has proposed creating 20 growth zones which would create tax incentives for local investment in economic development. [Treasury.gov, February 2012]
Obama Has Proposed And Signed Laws To Lower the Deficit
Affordable Care Act
Urban Institute: Cost-Containment Provisions In The ACA "Reduces The Federal Budget Deficit" And Provides "Faster Economic Growth, More Employment And Higher Family Incomes." In a 2011 report released examining how the Affordable Care Act "will impact labor costs and the demand for labor," the Urban Institute stated that the Affordable Care Act will contain the costs of health care, which will lead to economic and jobs growth over time:
There are many cost-containment measures in the ACA, and other proposals could build on those measures if adopted. Cost containment would have somewhat opposite effects than the effects of coverage expansion. To the extent the cost-containment efforts are successful, they will reduce the growth in health care costs. This will reduce the demand for labor as well as incomes in the health care sector, but it will increase the discretionary income that individuals and families have to spend elsewhere. Thus, if these efforts are successful, there will be additional spending outside the health sector that will increase demand for labor in other sectors.
Curtailing the growth in health care costs will mean lower costs for businesses and individuals. The CEA [Council of Economic Advisers] has estimated that reducing the growth in health care costs by 1 percentage point per year would result in a 4.0 percent higher GDP by 2030, due to a higher national savings rate, more capital formation and higher output. Faster growth in GDP would mean more jobs, lower unemployment, and higher family incomes.
Cost-containment efforts, if successful, will have somewhat opposite effects, reducing the growth in spending on Medicare and Medicaid, which will reduce the taxes or borrowing the federal government has to undertake. Cost-containment that reduces the federal budget deficit would result in faster economic growth, more employment and higher family incomes. Cost-containment would also free up private dollars to be spent in non-health areas of the economy. [Urban Institute, "How Will the Affordable Care Act Affect Jobs?" 3/21/11]
CBO, JCT Found Health Care Reform Legislation Would Reduce The Deficit By $143 Billion Through 2019. From a March 20, 2010, CBO cost estimate of the Senate health reform bill and the health care and education reconciliation bill:
CBO and JCT [Joint Committee on Taxation] estimate that enacting both pieces of legislation -- H.R. 3590 and the reconciliation proposal -- would produce a net reduction in federal deficits of $143 billion over the 2010-2019 period as result of changes in direct spending and revenues (see Table 1). That figure comprises $124 billion in net reductions deriving from the health care and revenue provisions and $19 billion in net reductions deriving from the education provisions. [Congressional Budget Office, 3/20/10]
In 2011, Obama Signed Budget Control Act That Focused On Spending Cuts. In August 2011, Obama signed the Budget Control Act passed in August, which includes approximately $1 trillion in cuts. The following month, he made proposals that would result in a net deficit reduction of more than $3 trillion over the next decade:
The Budget Control Act that I signed into law last month will cut annual Government spending by about $1 trillion over the next 10 years. It also charges the Joint Select Committee on Deficit Reduction with finding an additional $1.5 trillion in savings. As part of this jobs bill, I am asking the Congress to increase that amount so that it covers the full cost of the American Jobs Act. In addition, I believe that the Congress should seize the opportunity that this new Committee presents and do much more so that we can put the country on a sustainable fiscal path, which is critical for our long-term economic growth and competitiveness.
For this reason, I am sending to the Congress this detailed plan to pay for this jobs bill and realize more than $3 trillion in net deficit reduction over the next 10 years. Combined with the approximately $1 trillion in savings from the first part of the Budget Control Act, this would generate more than $4 trillion in deficit reduction over the next decade. This would bring the Nation to the point where current spending is no longer adding to our debt and where our debt is no longer increasing as a share of our economy--an important milestone on the way to restoring fiscal discipline and moving us toward balance. [Living Within Our Means and Investing in the Future: The President's Plan for Economic Growth and Deficit Reduction, WhiteHouse.gov, September 2011]
CBPP: Obama's Debt Reduction Plan Combines Revenue Increases And Spending Cuts. In a statement on Obama's September 2011 plan, James R. Horney, vice president of federal fiscal policy for the Center on Budget and Policy Priorities explained that Obama's "balanced approach -- both increases in revenues and reductions in spending -- is the only approach that will put the budget on an economically and politically sustainable path":
The President proposes that the sacrifices necessary to reduce the deficit be widely shared. Higher-income Americans -- who have seen their share of the economic pie increase in recent decades -- would give up a portion of the big tax cuts they have enjoyed since 2001. Corporations would give up tax breaks -- such as special benefits for certain industries, including oil and gas companies, and for the purchase of corporate jets -- that do nothing to promote economic growth.
Federal employees would have to pay a larger share of the contributions to their retirement plan, agribusinesses would see reduced subsidies, air travelers would pay more of the costs of security at airports and the air traffic control system, and Medicare and Medicaid would be reduced by $320 billion over ten years. Reductions in discretionary appropriations over the next ten years already agreed to in the Budget Control Act would affect nearly all Americans, as funding for a wide array of programs and activities -- such as grants to state and local governments to help pay for improvements in primary and secondary education, food safety inspections, visitor assistance at national parks, cancer research, and the military -- is constrained.
The only people largely shielded from cuts under the President's plan are the most vulnerable Americans -- children, the disabled, the blind, and the elderly with very low incomes. In light of the recent Census data showing a historically high rate of poverty, the President wisely followed the core principle established by the Bowles-Simpson commission report that deficit reduction should not push more Americans into, or deeper into, poverty. Such a balanced approach -- both increases in revenues and reductions in spending -- is the only approach that will put the budget on an economically and politically sustainable path. [CBPP Statement on President Obama's Budget Package, 9/19/11]
Experts Agree That Ending Tax Cuts On The Wealthy Will Reduce The Deficit
Center On Budget And Policy Priorities: Tax Increases On High-Income Taxpayers "Would Not Hinder -- And Could Even Bolster -- Economic Growth." According to the Center on Budget and Policy Priorities' (CBPP) Off the Charts blog, tax increases on high-income taxpayers "can reduce the deficit or fund investments that support growth" and "would not hinder -- and could even bolster -- economic growth":
This blog series and our new report have shown that tax increases on high-income people of the magnitude under consideration would not change their behavior in ways that would hurt economic growth. Moreover, the revenues from tax increases can reduce the deficit or fund investments that support growth.
Put simply, tax increases on high-income taxpayers of the sort under consideration would not hinder -- and could even bolster -- economic growth. With this in mind, policymakers should aim for a balanced deficit reduction package that shares the load through a mix of tax increases and spending cuts. [Off the Charts, Center on Budget and Policy Priorities, 5/2/12]
NY Times: President Obama's Proposal To Allow The Bush Tax Cuts To Expire For Wealthier Americans Would Raise $850 Billion Dollars In A Decade. The New York Times reported that "economists estimate that letting the cuts expire for people above that threshold would generate $850 billion over 10 years":
President Obama, drawing a contrast with what he called Republican trickle-down economics, called on Monday for temporarily extending the Bush-era tax cuts for people making less than $250,000 while letting the taxes of the wealthiest go up.
A one-year extension for people making under $250,000 would cost the government $150 billion in revenue, the administration estimates, an amount that would be added to the deficit. In a point of comparison, economists estimate that letting the cuts expire for people above that threshold would generate $850 billion over 10 years. [The New York Times, 7/9/12]
Robert Reich: "The Only Way America Can Reduce The Long-Term Budget Deficit ... Is By Raising Taxes On The Super Rich." In a Huffington Post blog post titled "Why We Must Raise Taxes On The Rich," former Labor Secretary Robert Reich argued that "[t]he only way America can reduce the long-term budget deficit ... is by raising taxes on the super rich":
Here's the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich. Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma -- even if we cut back on our bloated defense budget -- it wouldn't be nearly enough. [The Huffington Post, 4/4/11]