Obama's Budget Is All About Whom You Know

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A budget shows the priorities of whoever is doing the spending. Your family budget shows how much you value your home, education, religion, philanthropy, travel, clothes, etc. A person can say whatever they want, but your spending shows whether you are just talking or actually walking the walk. President Obama's budget proposal shows the whole country what his priorities are and the answer is that President Obama wants to control everyone's behavior using the federal government as both his carrot and stick.

The President thinks that putting your children in paid child care is good behavior. Thus, families making less than $120,000 per year get a bigger tax credit for child care. The budget also proposes an additional $1 billon for Head Start, which benefits poorer families with preschool age children. To round out this theme, the President's budget would add a $500 tax credit for dual earner families. Clearly, the President is in favor of both parents working and either strangers or government employees raising children as much as possible.

The President proposes a whole suite of changes related to higher education. He proposes a federal-state partnership to make two years of community college free. He proposes increasing Pell Grants for lower income college students in order to keep up with inflation. President Obama also proposes taking several different tax breaks for college expenses and combining them into one, simpler and larger tax credit. Finally, to complete the higher education policy proposals is another expansion of student loan debt forgiveness by allowing more students to enroll in pay-as-you-earn plans. These plans cap payments on student loan debt to ten percent of a borrower's discretionary income with the promise of forgiveness of any debt remaining after either ten or twenty years. The earlier forgiveness period is available to borrowers who work in public service jobs.

The President proposed nothing to help people save for college or to make it more affordable in any manner other than a government handout. Further, college financial aid is only expanded to people with incomes below the caps for these various programs. Earn too much money and you do not get Pell Grants, subsidized student loans, or tax breaks for your tuition expenses. Plus, giving public sector workers quicker student loan debt forgiveness implies that those jobs are somehow better for society than private sector ones. All of these higher education policies suggest government is your friend and personal responsibility is a bad idea.

The President also proposes providing a little money to states to encourage them to pass laws giving all workers seven paid days of sick leave. Given that he doesn't even propose national legislation on that topic, this is really just a pseudo-priority, designed to appeal to his political supporters while not actually likely to accomplish anything.

The budget also continues Obamacare subsidies and proposes a total increase in spending of over $340 billion, a nine percent increase in federal spending at a time when population growth is around one percent per year and inflation is not much more.

If you put this all together, the President is clearly stating that increasing government dependence is a priority. People are offered more financial assistance through the government so as to build support for larger government.

Also, only certain people matter as every proposal only applies to people who make less than a threshold amount, who take actions the government approves of, who behave in ways that the government encourages. Carrots abound if one is willing to do what is required. Sticks are in evidence as well; people doing too well on their own are penalized with high tax rates and the removal of subsidies or tax credits.

Even in industrial policy the same practice applies. Manufacturing businesses are good. Alternative, green energy companies are good. Firms that export products are valued. Firms that provide health care and paid sick leave are good; those that do not are bad. Employers creating good, high-paying jobs are not rewarded if they are in the wrong industry, if they donate to the wrong party, or if they don't allow unions to organize their workers. At a time when millions of Americans still need jobs, the President only believes in certain types of jobs.

Rather than advancing policies that are good for America, President Obama is only interested in helping some Americans, in rewarding the Americans who behave the way he thinks they should. He believes that the government, that he, should have the power to pick winners and losers. His vision is not one in which everyone wins, rather it is one where those he favors gain at the expense of those he seeks to punish for either their success or their actions.

If you want to know why American politics has become more polarized, look no further than the fact that government is now taking sides. Rather than working for all Americans, for all companies, President Obama has worked to create a government that is only for some. We are no longer indivisible but are officially separated by our incomes, our actions, and our alignment with the priorities of the government.

That is not how it is supposed to be.


Jeffrey Dorfman is a professor of economics at the University of Georgia, and the author of the e-book, Ending the Era of the Free Lunch

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