The president must have had a good laugh listening to criticism that his 2013 budget proposal is just more of the same. Say what you will, the man in the White House is no dummy. There is an invisible Obama budget, one that has little to do with the federal spending we heard about on Monday. This budget does not require a thumbs up from the House or Senate, a good thing given that there is no spending scheme this president can propose that will survive the House. Instead, the invisible budget is paid for at the state and local levels with tax dollars that go to funding the Obama agenda.
The White House is on the offensive, taking credit for a stronger economy and job growth despite embarrassing January jobs numbers showing that 42.9% of the unemployed, 5.5 million Americans, are jobless in the long term. This is more than double the number in December 2008 at the end of George W. Bush’s presidency,¹ and 5 million more than at the start of the recession.²
The Democratic solution to unaffordable spending is to push for a healthy whack at higher incomes. Our president wore this one out long ago. What can he gain by pursuing the fleecing of the wealthy, knowing that he stands no chance of success unless the GOP suffers a cataclysmic defeat at the polls in November? When it comes to the president’s reelection campaign, the federal budget is a feint. The invisible budget helps to fund irresponsible White House policies, and falls heavily on state and local governments.
Every time we hear the White House mantra We Can’t Wait and talk of fairness and responsibility, we know there is an ugly surprise brewing. The president has been more than up to the task of getting his way, bypassing Congress and taking his appeals to the people. His supporters seem blissfully ignorant of how much of his campaign platform they are funding.
What is unfair and irresponsible is not that higher earners get to keep more of what they earn than Democrats can bear, but that states are forced to fund policies that keep the president’s supporters happy. When Washington empowers groups that benefit from state and local tax revenue, and imposes added costs with misguided federal policies, budgets suffer. Empowering Illegal immigrants and public employee unions, expanding Medicaid under the health care law, and proposing that we punish colleges that raise tuition are just a few examples of how state and local governments are abused by partisan agenda coming from Washington.
Do we need Arne Duncan telling teachers and public employee unions that educators deserve massively higher salaries when we have already bailed out their jobs with federal tax dollars, and states have run up a trillion or more in unfunded public pension liabilities (see: Will Taxpayers Support Raising Teacher Salaries 165%? and Union Stance Ridicules Duncan’s Collaboration Efforts)?
Money is tight, but we have backed off on deporting illegal immigrants, who use more in services than they contribute in tax dollars.³ Rewarding illegal immigrants is a mainstay of Democratic policy, placing the president in the uncomfortable position of having to explain to special interests why his brand of immigration reform never passed Congress. Unfortunately for taxpayers, state and local governments are forced to provide services to illegals whether they like it or not.4 As we learned in 2011, the Justice Department can force states to follow the party line when they pass laws because they believe their citizens are more important than fulfilling campaign promises to pass an immigration bill.
The president’s failure to create the conditions to sustain a solid recovery have put a tremendous strain on state and local budgets, slashing returns on investment and depleting tax receipts. Medicaid costs have gone up because of the bad economy while threatening to rise even higher under the health care law. In April 2011 a federal watchdog agency forecast that states would either have to cut spending 12.5% each and every year or impose equivalent tax hikes if they wish to stave off budget deficits.5 Illinois tried the tax hike approach. Most of the money was swallowed by a public pension payment.
The president has taken his fight for the White House to the people, placing as much distance as possible between himself and a deservedly unpopular Congress. Transparency in the use of state and local tax dollars to fulfill Democratic and White House policy goals is not something we are going to see any time soon. Too bad. If voters knew the real cost of White House policy, they might think twice when the president’s campaign comes to town with talk of fairness, responsibility, and protecting middle class taxpayers.