President Obama’s new budget plan
With all of the talk on Political Realities and around the nation about the budget deficit, I thought it fitting to mention the budget for the upcoming fiscal year. The White House is set to release some of the details later Monday, but it has been learned that the budget will total $3.8 trillion in spending and will raise the deficit from $1.41 to $1.56 trillion. President Obama will be making an appearance to announce the budget and White House Press Secretary Robert Gibbs will brief reporters later.
There will be a spending cap applied to what is known as discretionary spending, which basically means everything except Medicare, Medicade, Social Security, and anything to do with national security. The budget will include $100 billion that is supposed to boost jobs creation by providing tax breaks to businesses who hire new workers. There will also be a tax increase on those individuals who earn over $250,000 per year and on energy producers. The tax increase on energy producers may have the effect of raising energy prices, since those who produce the energy, bet it oil, gas, coal, or electric companies will not actually be paying the tax. It will almost surely be passed on to the end consumer of the energy. That would be you and me.
All in all, President Obama has increased federal spending 5.7% in this fiscal year and the budget for fiscal 2011 is slated to increase it another 3%. Some of the details will surely have to be negotiated with Congress, as I am positive they will want their stamp of approval on anything the President proposes. There is no way it will go through those chambers without changes being made. Let Nancy Pelosi get her hands on it and there is no guarantee what it will look like. One thing for sure, it’s going to be an expensive year for our country.
>>The tax increase on energy producers may have the effect of raising energy prices, since those who produce the energy, bet it oil, gas, coal, or electric companies will not actually be paying the tax. It will almost surely be passed on to the end consumer of the energy. That would be you and me.<<
Just think if we had placed a tax on energy in the wake of 9/11….we'd have demanded the high mileage vehicles and efficient appliances we CAN actually make, but due to lack of demand we don't make. (-well, not in an appreciable quantities…..)
-which would offset any tax increase, since not only would you use less, but that lower use would cause the price at the source(Saudi oil) to drop. So we can pay a tax to the US treasury or to the Saudi treasury. I prefer our U.S. Treasury, thank you.
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Well, that’s just great. My electric bill was the highest it has ever been this month and now it seems that it’s likely to go even higher. That’s just what I need.
In 1973, Denmark DOUBLED their energy tax. They imported 90% of their energy needs. Today the sons & daughters of those forward thinking people thank their parents for biting the bullet, for now Denmark is mostly energy self sufficient. And each citizen’s energy bill is far LOWER than it would be if those folks had been selfishly thinking of only their narrow self interest. It’s not all about you GC Jackson.
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If it is necessary, i will pay for a union suit Jackson outta my VA & SS checks, OK?
David W. Walters´s last blog ..War sucks
Well, forgive me David for not jumping with joy when I have to pay a 350 dollar electric bill. When it takes that much of my paycheck to pay it, I have to think about my family. That is what happens when all the taxes start hitting the big companies like the energy companies and others. They don’t pay the taxes, the little guy has to pay it because it all trickles down to us. I don’t need you to pay for a union suit out of your checks. I want more of my check that I can keep. Obama will spout off about how he is cutting taxes for the middle and lower class but then he wants to put something like this into effect. I can see thru his smoke screen and I am not the only one.
Jackson, forgive me as coming across wrong…. Poor folk such as we are need a bit of help with those high prices electric bills.
“…….I have to think about my family.” -Sure, we all do. I’m talking about a LONG term solution instead of a short term, whatever this is we now have, ’cause it ain’t cheap! To be sure, i don’t make all that much, and around here in the drafty double wide, we close off rooms, i cut my own wood and sleep with an electric blanket so i can turn the heat pump down. I wear a union suit or other thermal underware to help live in this drafty cold house. I sure can’t wait until spring!
I brought up a solution that will have us pay more in the short run. My point is, the Danes bit the bitter pill and swallowed. The cure took some time to effect a solution or cure, but in the long run their FAMILIES are now better off…..and isn’t that exactly what you want? We can continue to do what we are now doing -NOTHING- or we could cut all taxes on energy and get that short term sweet reward until demand rises and so do fuel prices and guess what? Gas just went up again to $4 / gallon! Or we can think ahead to our children AND grandchildren and take that bitter pill.
So do we want alternatives? Everything has a price,and we know our 20th century fuels are getting scarcer, and world wide demand is rising (-remember all those people in India and China that are buying a car for the 1st time)……so supply and demand dictates rising prices. Tax energy, and it will drive down demand, YES, at a short term cost, which will only be alleviated by the decrease in price due to lower demand. Demand is down? -Prices drop! Gosh i love the free market!!!
So let’s end dependence on Saudi oil. It funds madrases, just what we need.
David W. Walters´s last blog ..War sucks
The new budget seens to include revenue from “cap and trade”, something that hasn’t yet passed the Senate, but then Obama is counting on the EPA to take up the slack. Higher taxes on utilities, as you point out, will only lead to high utility prices to the consumer. Which will in turn leave the consumer less money to spend on other things and also cause almost everything one buys to increase in price, including food items. This will be tragic for the economy—its almost like these fools just don’t care for some unknown reason.
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Ron,
like i said……we can continue to pay taxes to and fund Saudi, Iranian, and Venezuelan programs by continuing our dependence on imported oil. And having a geology background, i can tell you we cannot drill our way out of the energy shortfall. Increased demand from newly emerging middle classes in China and India (……their combined populations are over 5 times larger than the United States population) will put MORE people in competition for ever DECREASING amounts of oil reserves, hence: increased energy prices! An energy tax worked to curb Danish energy demand. What makes you think we cannot do it?
David W. Walters´s last blog ..War sucks
All I can say is that my electric bill this month was double what I paid for an apartment 300sq ft bigger just 2 years ago. And I was living here in the exact same spot!
Gosh, I hope they put a stop to all this spending. I really do!
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The people in Washington just can’t get it thru their heads that when they hit the big companies and corporations with a tax of any kind the end consumer is the one that always pays that tax thru higher prices.
Larry, i get it. The purpose of the tax is to cause people to finds ways to reduce use. The tax is sure as hell passed on, and we (ingenious folks that we are!)….figure out ways to reduce use. Whenever price increases, demand lowers. If demand lowers, price will follow. This is exactly what the Saudis want to hear:
“……..We can’t do this, it is too hard!”
So, do we want to support more madrases?
David W. Walters´s last blog ..War sucks
During the State of the Union address Barack Obama made it a point to mention that he will be cutting taxes or has already cut taxes on 95% of Americans. He tried to portray himself as a tax cutter. While the only individuals that will see a direct tax increase will be the top wage earners, ALL Americans will see tax increases in an indirect manner if this budget passes.
If Obama raises taxes on energy companies who does he think will actually pay these taxes? The cost will be passed on to you and I. We will be paying the taxes but they won’t be called taxes, it will be an increase in the price of energy. A tax is a tax, direct or indirect, it doesn’t matter. Barack Obama’s budget will cost ALL Americans more.
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The “making work pay” thinger isn’t a tax cut. He’s said it is, but it isn’t, and there are quite a few Americans that will be paying it back.
Wow, it never ceases to amaze me at the direction the discussion goes on some of these articles. I can never predict it.
David, I fail to see how taxing energy producers even more than they already are is going to help anything. As I pointed out in my article and as some of the comments have said, doing that is going to affect one group of people; the end consumer of the energy. The energy and utility companies are not going to absorb the cost of that tax, but will instead pass it on to you and me. If you think that will not happen, consider this.
In Arkansas right now, the electric companies are tacking on an additional charge to each customer’s monthly bill. It is classified as a cost recovery charge and in some instances, it is higher than the actual electric bill. What they are trying to do is recover the cost of dealing with the effects of inclement weather. Trust me, if they are hit with an extra tax, they will find a way to pass it on to the end consumer. That will do nothing to fund clean energy or to force us to drive a more fuel efficient vehicle, but it will be sure to raise our utility bills.
Larry, The point is, we need to get off the fossil fuel teat. It has done our country well for oh so long. But there comes a time when we need to make a break. Exxon/Mobile would have you believe that they are indispensable. They are not. The “Clean Coal” crowd would like us to believe they too, are indispensable. They are not. We have paid out of our pockets through taxes to provide all the energy companies with infrastructure for transportation, cheap leases on production sites, and a military to protect their overseas assets. It’s time to wean ourselves off their teat and reach for something new. The only way this can be accomplished is by ensuring alternatives can compete in the market with government subsidized coal & oil.
David W. Walters´s last blog ..War sucks
David,
Let me be as clear as I know how. You keep going off on some wild tangent about supporting Saudi Arabia, but that really has nothing to do with this issue. What we are facing is the high cost of energy, be it electricity or gasoline for our vehicles. You seem to be of the opinion that the best thing for us to do is to make those prices go even higher and force Americans to change. This new tax is not going to be applied just to the oil companies, but also to the utility companies who supply our electricity and other forms of energy that power our homes. The last time I checked, none of our electricity comes from the Middle East.
Maybe Americans do need to change some of our habits and the way we do things, but bankrupting middle-class, American households, just so they can pay their electric bills, is not the answer. Do I need to say that again? It will not help our energy independence if we allow that to happen.
This discussion is over, as I am tired of seeing my articles hijacked into discussions that do not pertain to the topic at hand. Doing something I have never done in over three years of blogging, I am now closing the comments on this post.