Wednesday, July 31, 2013

Wednesday, July 31, 2013

Obamanomics Failing Middle Class Americans

Continuing his series of economic speeches, President Obama spoke at an Amazon Fulfillment Center in Chattanooga, Tennessee, yesterday. During his remarks Obama pitched his latest plan for a "grand bargain" on the economy -- corporate tax cuts, more infrastructure spending and the elimination of federal government spending cuts forced by sequestration.

Let's think about that for a moment. Barack Obama is running around the country giving speeches about helping middle and working class Americans. But as Rep. Paul Ryan noted, Obama is really pitching a "grand bargain for big business."

Obama is proposing to cut the corporate tax rate from 35% to 28%. Don't get me wrong -- I think tax cuts are good economic policy. But on January 3rd of this year, Obama signed the fiscal cliff deal that raised the top tax rate on individuals and small businesses owners to 39.6%. That "deal" is expected to take $60 billion a year out of the hides of families and small business owners.

Don't forget that the president recently suspended Obamacare's employer mandate for companies with more than 50 employees, but he is refusing to suspend the individual mandate. So Obama is giving Big Business tax cuts and breaks from Obamacare that small businesses and families can't get.

As for infrastructure spending, there's an argument to be made for more roads and bridges. But this president mocks the Keystone pipeline and wages a war on coal while he sinks your hard-earned tax dollars into green-energy boondoggles like Solyndra.

Now get this: While Obama chose the Amazon facility to highlight the importance of the private sector, he launched into yet another defense of Big Government, bemoaning the sequestration spending cuts as well as the recent downsizing of government workers at all levels. Obama said:

"If those [government] layoffs had not happened, if public sector employees grew like they did in the past two recessions, the unemployment rate would be 6.5 instead of 7.5. Our economy would be much better off, and the deficit would still be going down because we would be getting more tax revenue."

Really, Mr. Obama, that's your big idea -- grow the government? By the way, sequestration, which Obama rails against, was his idea!

Obamanomics isn't working, and today's GDP figures speak for themselves. The U.S. economy grew at a sluggish pace of 1.7% in the second quarter of 2013, and first quarter growth was revised downward to 1.1%.

More Bad News

The latest headlines about Obamacare must have folks in the White House reaching for the Maalox. As states rush to set up their mandated Obamacare exchanges, there has been a steady stream of headlines warning of massive premium hikes thanks to Obamacare -- 40% increase in Florida, up 72% in Indiana, up 88% in Ohio.

The results were so bad in Georgia that officials there are asking for an emergency delay after discovering that premiums could rise as much as 198% for some plans.

Liberals counter that these higher premiums will be offset by taxpayer-funded subsidies. But many Americans will have to lookout for the Obamacare "subsidy cliff," as one recent study described it.

The taxpayer-subsidized premiums that an individual or a family qualify for are pegged to a specific formula. Earn one dollar more than the allowed amount and you lose 100% of the subsidy. As the study notes, this perverse setup may "incentivize some to earn less." Consider the following example based on details for a family of three from New York's Obamacare exchange:

"The second lowest silver plan … would cost $12,784 before subsidies. …if the family earns $78,120 they will only be required to spend $7,421, with the government subsidizing the rest. That's a total savings of $5,363! $78,120 - $7,421 = $70,699 of take-home income after health insurance.

"What happens if the family earns $78,121 dollars? Suddenly they lose the entire amount of the savings and are actually worse off than they were before. $78,121 - $12,784 = $65,337 of take-home income after health insurance. In fact, assuming the family of three wanted to keep the same plan they would need to earn $83,483 just to get back to where they were before."

This example also demonstrates what a massive redistribution of wealth scheme Obamacare really is. In this example, 7% of a New York family's income is subsidized by Obamacare. The left knows that government dependency is its ticket to power, and through Obamacare it is looking to get more and more people hooked on Big Government.

The GOP's Civil War

The Republican Party appears to be the middle of a civil war over immigration reform. The Washington Times reported yesterday that top party donors, former officials and traditional allies in the business community are mounting a full-court press to pressure Republican House members into supporting the Senate's quasi-amnesty bill.

That bill only survived because Republicans were promised a "surge" of new agents to help secure the border. Most Senate Republicans refused to fall for that ruse, but enough did. And it really was a ruse.

According to Politico, Senator John McCain suggested yesterday before a Big Labor forum that the so-called "border surge" amendment would likely be gutted during final negotiations after the House passes its own immigration legislation. McCain said, "We don’t need 20,000 additional border patrol agents. …I voted for it so friends of mine would be comfortable that we are securing the border."

The good news is that Senator Jeff Sessions is still fighting to defeat the Senate's amnesty bill by reframing the entire debate. In Sessions' view, the focus shouldn't be on illegal immigrants, but the impact on hard-working Americans.

In a memo to his Senate GOP colleagues, Sessions wrote that the elite view on immigration reform is "nonsense," adding that Republicans should instead, "speak directly to the real and legitimate concerns of millions of hurting Americans whose wages have declined and whose job prospects have grown only bleaker." I couldn't agree more!