When I read the February 22, Business Week interview with President Obama’s “agnostic” response to a question referring to his commitment level to his campaign pledge (taxes would remain the same or go down for those making less than $250,000 annually or for roughly 95% of Americans), my first reaction was: Do you remember former President George H.W. Bush’s “Read my lips, no new taxes.” pledge in the 1988 presidential campaign? Do you remember not honoring that and raising taxes in his first term severely politically damaged him and greatly contributed to his 1992 reelection loss? Does President Obama? Does Congress? My first thoughts were: President Obama’s “agnostic” response was a cold shoulder to the American taxpayers considering this constant tax pledge during his campaign and first year in office. I believe this tax pledge was one of the deciding factors for many that voted for him.
It is inconceivable to me that anyone in Washington believes they are entitled to spend and tax to the point that all Americans will be looking at huge tax increases and new government fees to pay for all of the new spending. President Obama’s “agnostic” response was a glimpse of realism that tax hikes will also be affecting those making less than $250,000 annually. It may come in an income tax hike for them or in other forms of taxes and fees, but it appears it is coming. President Obama knows it. We really shouldn’t be surprised, for there was a clear warning sign back in August, 2009 as reported by the New York Daily News: “White House officials on Sunday refused to rule out hiking taxes as one of the "hard choices" needed to fix the economy over the long haul.”
Vice President Joe Biden recently proclaimed “Washington is broken.” I believe he was referring, and spinning actually, to the partisanship he wants to portray as the reason new big government programs legislation, which all include new taxation, has not been passed by Congress yet. Hearing him say this and understanding his definition of what about Washington is broken would be laughable if it wasn’t so serious for the economic future of Americans. It was a stunning display of the tone deafness of Washington and how its definition of broken is different than that of the majority of voters. Most in Washington are not truly representing the majority of the American people whom do not want bigger government and the resulting bigger budget deficits. The American people know this can only lead to more taxes and fees.
Mr. Biden is right about Washington being broken though. The majority of Americans agree, and I have to believe all politicians, especially the President and Vice President, are well aware of the legitimate issues. Both addressed many of the real problems while being interviewed by the voters for their current positions. As with any job interview, they explained how they planned to be an asset to their employers, the voters, and the “change” they would bring to the company, the federal government. Both addressed the lack of accountability in the current company management and assured their prospective employers they would expect to be held accountable. I believe the first place to start with accountability is to change the dynamics of political campaign promises being thrown out as soon as one gets the job. The American people know what was promised in the job interviews by President Obama and Vice President Joe Biden – accepting accountability, eliminating corruption, maximizing transparency, and changing business as usual. I also remember hearing there would be an elimination of earmarks, special interest, and lobbyist. And of course, no tax increases for 95% to name a few.
It appears the majority of these interview talking points, along with several other social change points, were tossed aside in the first few months of the job performance. Why have Americans allowed politicians of both parties, their employees, to get away with such bate and switch tactics for decades? These types of tactics are considered fraud in any other circumstance. Job candidates that do not live up to their interview talk or have misrepresentation in their resumes are fired for dishonesty in the private sector. It is a general understanding by all this is the consequence for such behavior. Should a job applicant employ a “say anything” and “say what the employer wants to hear” strategy in the interview to get the job and then the job performance is lacking; this is not waved away with a casual “Every job candidate does this.” mentality by an employer.
Are politicians really any different than other employees? Should the federal government have different politician employee performance standards than any other U.S. company? Should the voters, their employer, have different expectation standards than other employers? Should we effectively want to fix broken Washington, we must hold politicians to the same honesty and performance accountability standards any other employer expects from their employees. The voters must change the paradigm of their expectations as employers and realize political campaigns are nothing more and nothing less than a job interview.
What politicians say in their job interview should remain solid in their job performance. The politician elected was selected over the other job applicants based on their interview presentation. What they represented in the interview process does matter, and this is where accountability when they get the job starts. If a private company manager employee consistently went over the company’s budget and ran a deficit in their department, the employee could not wave this away, and the employer would not accept this as effective management. The manager employee would be fired and replaced with another employee that could manage a budget and show leadership in keeping it balanced. Should we truly want to lower and pay off the deficit, we must hold politicians to the same fiscal standards businesses and families are held to in their budget management. In addition, if an employee talks down to or disregards the opinion of their employer, this is insubordination, and they should get fired.
The bottom line is the U.S. federal government (and many individual state and local government) is broke as we all know. The U.S. deficit is projected to hit $1.6 trillion in 2010. The deficit is the difference between spending and income in one year. Our total debt is now projected to be in excess of 100% of the GDP beginning in 2011. Greece is bankrupt with their government spending 52% of its GDP. Our nation’s credit card is well over its credit limit. We must pay down our credit balance and not even consider adding any new purchases until we do. Pointing fingers, affixing blame, and touting an inherited deficit is of little console and is not an acceptable argument to continue adding to the credit card balance at this point. It’s time to stop the blame game, the political spin, embracing special interest, and making backroom deals. It’s time for our representatives from both major parties to suck it up, show strong leadership, take real corrective action, and start to be a part of the solution and not continue to be a part of the problem. It is time for them to live up to their job interview presentation of their management skill set.
In today’s fragile economic climate, hiking taxes to what amounts to exorbitant rates on any business or family is not the best answer or even a reasonable answer to paying down the deficit. Class warfare may have worked in the past, but it is not working in America now with regard to tax rates. As reported in a recent Rasmussen Poll: “Most Americans favor a law that would limit the amount of taxes paid to state, local and federal governments so that no one would pay more than 50% of their total income in taxes. Even when that standard is applied to someone who earns a million dollars a year, most Americans say that such a fortunate individual should pay less than half of their income in taxes.”
It is easily seen as the double-talk that it is for one to talk seriously about paying down the deficit and at the same time to seek huge new government programs and spending. It is time for politicians to grow up, to get real, and to understand American taxpayers (and future generations) are not an open checkbook with funds magically deposited nightly by the money fairy or the Federal Reserve masquerading as our rich uncle. As reported in another recent Rasmussen Poll: “President Obama may have to go back on his campaign promise against raising taxes on Americans making less than $250,000 a year in order to reduce the country's record budget deficit. But a new Rasmussen Reports national telephone survey shows that even if the president and Congress raise taxes to reduce the federal deficit, 58% of voters think they are more likely to spend the money on new government programs. Separate polling shows that the vast majority of voters nationwide (83%) of Americans say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.”
It’s time to acknowledge that significant job creation only occurring in government jobs is not sustainable as true economic recovery. This is in reality only adding more to the deficit in the long run. The private sector creates the wealth and financial stability of our nation, not the public sector. Let’s face it, New York and California can not pay their bills after several state tax hikes due to the enormous obligations of their public employee costs. Western European countries already imposing many of the new program models being considered by Washington have standard high unemployment, growth stifling tax rates, and low innovation. Where is the line for the U.S. when the ability to tax the private sector no longer can afford the only growth being in government jobs?
While politicians tout the stimulus is working, many in America do not agree and are not optimistic with big spending and big tax hikes looming. As reported by ABC News Poll on February 16: “Just 23 percent think things are getting better and 77 percent say the economy is staying the same or getting worse – a chilling assessment given the very low ratings of current sentiment. A key indicator from last week's ABC News/Washington Post poll underscores these persistent negative feelings. Eighty-eight percent think that the economy, despite what economists say to the contrary, is still in a recession. And on a more personal note, 53 percent say that based on their experience the economy has not begun to recover.”
Defining the “rich”; and therefore, whom can withstand large tax increases without further damage to unemployment figures and the economy in general, is not as simple as pointing to anyone whom makes $250,000 or more in this current recession-era America. As reported by a Washington Post Poll: “Concern about the impact of recession crosses party lines. More than six in 10 Democrats, Republicans and independents say they have been hurt by the recession. Higher- and lower-income households alike reported significant levels of economic pain.”
Blue states and red states – left and right – Democrats and Republicans: The first step to tackling our fiscal problems is to stop consideration of any new spending programs. The next step is to task the newly formed, 10 Democrat and 8 Republican, Deficit Panel with auditing all federal government programs with the goals of eliminating the great waste of taxpayers’ money in service and program duplication and ridiculous earmark spending. Did you know there are 69 federal agencies to administer 10 early education programs as just one example of extreme duplication? We must also look at every existing state specific earmark expenditure, whether 1 year old or 100 years old, and ask the question: Would the taxpayer’s of the state in which the earmark provides benefit be willing to pay higher state taxes in any form to pay for this program to continue it in their state?
All earmarks and pork barrel spending must be seen as unacceptable in Congress’ fiduciary responsibility to taxpayers with no exceptions. Every politician promises a form of this in almost every campaign. As you will recall, President Obama presented that he would not allow earmarks in his 2008 job interview - the 2008 Presidential campaign. It is time for this promise to be a reality without further discussion or consideration of any kind.
We simply can’t afford pork barrel spending and special interests any more. Families don’t buy their children gifts when they can’t afford the house payment – even if their children threaten them with hating them or throw a public tantrum. Politicians seeing it as their duty to “bring home the bacon” of federal money to be spent in their state can no longer be acceptable to Washington or their represented states. The “bacon” must be recognized for what it is - money taken in the form of taxes and fees by the federal government paid by American working families and businesses at all income levels.
I realize many will see the “stop new spending and eliminate old earmarks” as the first steps in tackling our fiscal problems as an extreme answer and politically undoable. Yet, consider a recent Gallup Poll: “Americans are markedly cynical about the amount of waste in federal spending, more so than at several other times in recent history. On average, Americans believe 50 cents of every tax dollar that goes to the government in Washington, D.C. , today are wasted. That's an increase from 46 cents per dollar in 2001.”
When an American family is laden with debt that must be paid off to enable the family to regain their financial stability, and an increased income is not an option; the family eliminates current unnecessary expenditures even if it hurts such as cable, entertainment, dining out, dog grooming, salon services, clothing, etc. They choose one service and eliminate the duplicate service such as cable/satellite, landline/cell, theater/Blockbuster, etc. And, they do not add any new credit card charges until they have paid down their current credit obligations. They certainly don’t continue to charge up their credit cards insisting that all charges are necessary when they are not. They don’t refuse to realistically look at lifestyle spending cuts that would enable them to pay off their credit card balance and become more financially stable. They would never consider breaking into their child’s piggy bank or just handing a kindergarten class their bills to pay off when they begin working in 12-20 years.
Political rhetoric about spending being “frozen” that does not take into account examining and eliminating unnecessary existing programs and duplication waste is again really just political double-talk. This does not reflect a sincere or serious approach to making an authentic effort and difference in reducing the deficit. That is the sacrifice families make to pay their bills, and it must be the sacrifice politicians make to pay the nation’s bills. No more political spin about government tightening their belts without actually doing so. No more word games and double talk. Tax increases or new taxes as an answer to deficit reduction is not political belt tightening. Raising the debt ceiling isn’t either. It’s also time to acknowledge that no company or state is too big to fail. Private businesses and families file bankruptcy when they must as sad as this may be for them. (At least it used to be for all businesses until the federal government began picking losers and winners in private enterprise.) It is not what they want to do or an easy path to take, but it is recognized by law as a last resort option and does provide an ability to restructure and start over on more solid fiscal ground.
I believe President Obama will have the same fate as Bush 41 in his reelection bid; if like him, he does not live up to his tax campaign pledge. This commitment was not “agnostic” when he was interviewing for the job and should not be allowed to be so now. I believe if he imposes new taxes on even the higher wage earners, which are in reality often business owners; and the result is even higher and longer unemployment rates, his employment contract renewal is also highly unlikely.
With the taxpayers now wide awake and closely watching federal spending and tax policies, it will not matter whether these new taxes come in the form of higher income tax rates (or reworking tax brackets or eliminating some tax deductions), higher payroll taxes, new health insurance policy taxes, new gasoline or energy taxes, any type of new “fees”, or a federal sales or value-added tax. Voters are intelligent. They will recognize a new “tax” that will affect them whether directly in tax hikes, new fees, or deeper unemployment. It will not matter if it is creatively named to hide the fact that it is indeed a new tax obligation coming out of their wallet or purse. They will recognize any new taxes are necessary for the most part only because politicians refuse to manage and spend their money responsibly.
Should the Deficit Panel not recommend seriously eliminating waste and stopping further spending as the first steps to paying down the federal deficit, they will be viewed as simply working from a “justification of new taxes” predisposition. They can call new tax proposals “necessary” and “of a bi-partisan agreement” in their findings, but the taxpayers will not accept this political explanation or direction any more. Should a tax hike be recommended and any group of taxpayers is carved out of it, this will be seen for the pay back to special interest that it is too. And if the Pay/Go order simply becomes another vehicle to justify more taxes, this will be recognized as such by taxpayers.
Should the current path of increased spending and new taxes be the path politicians stay on, I believe the incumbent big spenders of both parties in Congress will look back in January, 2011 and realize Tiger Woods had a better 2010 than they did. Congress certainly will have more to explain and apologize for to the people that should have been considered in their decisions and actions. The reason for this careless behavior will be the same, but most politicians, unlike Mr. Woods, will not likely acknowledge they acted out of self interest and simply felt “entitled”.
I am skeptical, yet I am hopeful too that I am wrong in my skepticism. As Mrs. Woods expressed, the proof will not come in words, but in actions. The voters will be watching the actions. The politicians’ employers, the voters, will be watching their employees, the politicians, and judging them by their interview presentation and job performance match up as well as the overall health of the company, the federal government, under their management. I know America can pull through this hard time, and we must - even if it takes firing every politician employee we have and starting over. I'm hopeful our politician employees have heeded being put on performance probation and will make the necessary changes to have a good performance review in November. If not, like any responsible employer, we'll have to let you go for the good of all.