There is a malady called the second term curse and President Obama has set himself up for failure based on his first term shortcomings and his vaguely described agenda for a second term. His likely failure is built around his taxation policy, military and militarily-related spending, his “all-of-the-above” energy policy, and his erosion of our civil liberties.
At the very most, Obama will raise the tax rate to 39.6 percent for those earning over $250,000 and the Bush tax cuts will remain in place for everyone else. He will reduce the corporate tax rate from 35 percent to 25 percent, even though, according to the General Accounting Office, two-thirds of U.S.-chartered corporations don’t pay any income tax to the national government.
A trillion dollars is a conservative estimate of how much revenue would be gained by letting all of the Bush tax cuts expire at the end of the year 2012. Preserving the cuts for those households earning under $250,000 would reduce that revenue gain substantially. It is now being reported that Obama will likely raise the bar for exemption from the continuation of the tax cuts to $1 million, thereby reducing the ten-year revenue gain even further. A revenue increase of several hundred billion dollars over ten years would have little impact on a $16 trillion current debt, increasing by over one trillion dollars over each of the last three years.
President Obama doesn’t seem to understand how massively both wealth and earned income are concentrated in the top few percent of taxpayers. Thus, to tax income in a closer relationship to who earns it, a top marginal tax rate in the range of 60 to 70 percent might be politically feasible if wisely and incessently promoted. If we could go back to the tax rate structure in effect in 1961, it would raise an additional $716 billion in revenue each year.
In addition to setting the top marginal tax rate too low, President Obama’s ten year spending plan for the Pentagon, submitted with the FY 2012 federal budget, called for just under $6.5 trillion in spending. This figure is staggering enough but there are military budget analysts, such as the National Priorities Project, who contend that the more reliable category to measure is militarily-related spending. This category includes that part of nuclear weapons spending that is in the Department of Energy budget; embassy security and other security needs of the Department of State; spending in our sprawling intelligence complex that has a military mission; militarily-related spending in the Department of Homeland Security; and interest on the governmental debt caused by unfunded prior wars. The National Priorities Project puts this militarily-related spending at $1.2 trillion this fiscal year, or almost double the current Pentagon budget, including spending on the war in Afghanistan.
It can be readily seen that President Obama has locked himself into a position in which there will not be money to rebuild the nation, as he promised to do in the 2012 presidential campaign.
On civil liberties, Obama has adopted the restrictive positions of George W. Bush and upped the ante on Bush by reserving to himself the power to order the death of U.S. citizens. When Obama sought the amendment of the Military Commissions Act of 2006 to provide more legal rights of detainees at Guantanamo, he didn’t seek to remove the provision that allows the president to sanction CIA torture of detainees on national security grounds.
When President Obama adopted his all-of-the-above energy policy for the 2012 campaign, he basically threw away his first term campaign promise to lead the nation to a renewable energy future. One can’t maintain a focus on renewables when promoting all forms of energy use.
What has been presented above does not exhaust the reasons that President Obama is likely to be considered a presidential failure; however, it does identify a number of reasons why this might be so.