The Second Year of the Obama Administration: Facts, Opinions and Discussions

I'm not sure that's an example of stellar leadership, but it is something specific that can be examined. I do think you're leaving out half the picture though.

The problem, as the article mentions, is that while the withholding rate was slightly reduced, health-care related deductions rose due to the health care overall, which Obama also pushed for. So, the end result was that each canceled each other out, and in many cases, health care deductions were increased more than the offset, so it appeared that taxes were raised. If someone gets $65 less per month taken out on line 1 because of a tax reduction, but gets $80 more taken out per month on line 2 due to a withholding increase, the end result is that their taxes just increased by $15. The categories themselves don't matter, it's the total figure that does. And, while it's not the fed's doing, taxpayers in 60% of the states saw their rates rise at that level. Here's the link:

NYT HERE

So, I think a strong case could be made that such is poor leadership, or at the very least politics as usual, because while the withholding rate was reduced, it was used as a mask for an increase in taxes elsewhere. Or maybe it was a shrewd maneuver, because without the withholding reduction, there would have probably been a tax revolt.

 

The article merely says that people's share of their employee health care costs were rising (this has happened virtually every year for the past decade) and that may have offset any visible gains in take home pay.

But the increase in health care costs outpacing inflation year after year has nothing to do with Obama (except to the extent it describes why his health care reform was so badly needed).

It wasn't "a wash" because without the tax cuts, Americans would have felt a larger drop in take home pay.

and in the cases where increasing state taxes canceled out the effects of a significant federal tax cut, that also has absolutely nothing to do with Obama's leadership.

Again, I think this is a clear example of exemplary leadership where the president deliberately did the right thing at a high political cost to himself.

 

It wasn't "a wash" because without the tax cuts, Americans would have felt a larger drop in take home pay.

Yeah, this is my point as well. I don't think such an action was in any way "exemplary." Health care deduction rose because of adjustments in the health care law. Without much wiggle room available in other areas, (SS deductions, etc..) the standard withholding deduction was reduced as an offset. Obama was faced with the prospect of having constituent's tax burdens increase by $80* or by $15* per month. He choose the second option, which any President would have done.

I'm not promoting one choice as being better than the other. However, an exemplary leader would have explained the best course of action and would have gotten the public on board, instead of playing fast and loose with the figures in an attempt to bury the tax increase. His way wasn't bad, it's just that it shouldn't be lauded as extraordinary either. It was simply the politically expedient choice that any executive would have done.

*= Of course, the actual figures are dependent on each taxpayers situation. $65 was mentioned as an average, but some would be less, and some would be more.

 

Health care deduction rose because of adjustments in the health care law.

I don't think that's correct. The article is talking about increases in private insurer healthcare premiums - I'm not aware of any changes in the federal law that directly increased people's healthcare premiums last year. Either way, it's a bit dishonest to suggest that a legitimate tax cut coupled with private sector increases in the cost of living equals a "tax increase." That's faulty logic and a simple refusal to acknowledge reality.

There's no way to characterize the net effect as anything but a genuine tax cut - again, strong leadership that traded away political benefits for net economic benefits to taxpayers.

Your argument seems to be that if people don't see the net benefits of a tax cut because of a rise in their cost of living caused by private sector price increases, then it shouldn't really count as a tax cut. That's a bit absurd.

Here's more info about how the tax cut worked/works

 

That's not my argument at all.

You first brought up the tax cut, and said it was an example of "stellar leadership." (or maybe it was exemplary, but either way, there was an adjective there.) While you didn't directly make the claim, you even hinted that there were even altruistic motives behind the action, sort of like someone anonymously donating to a charity to do the right thing but avoid the spotlight. That's not what happened, as the move was simply a politically expedient one. I did misread the private premium deduction, as I thought I saw medicare in the article, but it doesn't change the overall example. My point is that if that's your assertion, then the public isn't going to care if the end result is still a net reduction in their paycheck.

There was no input, or connection to the idea, or support of tough decisions. By definition, that's not leadership at all, it's simply offsetting the impact of an increase in one line item with a reduction in a different line item, which the same administration pushed for as policy. That's called the day to day operation of government. It's like lauding someone for stellar leadership for simply showing up to work every day, when in fact, showing up to work is a basic assumption when one has a job. Or maybe at this point, the bar is set so low, that it is an example of leadership for simply showing up every day, I don't know.

 

You're still misreading what happened. The tax cut poured billions of dollars into the economy. The Obama administration did not publicize it, because the publicity itself might have negated some of the effects. People did not feel the net benefit much at an individual level, and precisely because of that they were more likely to spend the money in the sought after stimulative ways.

It's an unequivocal example of the president doing his job effectively and refraining from taking credit for it in a way that benefited him directly and immediately.

Reading through the comment section to the article in the NYT, it's amazing how ideology can get in the way of understanding relatively simple facts. Many people refused to acknowledge it as a tax cut even after the mechanism was explained to them and independent links were provided. Any reality that goes against the accepted meme of Obama as a tax and spend socialist is simply denied.

 

Maybe, but I think you're also ignoring basic human behavior that has nothing to do with Obama, specifically. The tax cut isn't being acknowledged because it came in tandem with an effective tax increase elsewhere-correctly or incorrectly viewed.

Let's look at the old political saying "I'll put a chicken in every pot," which, while often misapplied, is a promise of prosperity if elected. (and Hoover even added in "a car in every garage," but I suppose that's inflation for you...) But what if, in order to get a chicken, everyone's cow had to be taken away? In that case, the public wouldn't be focused on the fact that they gained a chicken, but rather, the fact that they lost a cow.

In essence, that's the standard you're using. You're saying that Obama slightly lowered the withholding rate even as other deductions were being raised due to a re-aligning of health care reform being pushed through. The net result is still a loss when the individual looks at their paycheck. If someone gets a $100 check every week, they're going to see it as a loss if the same check is reduced to $80, if that's the standard you're using. They're not going to celebrate the fact that their check could have actually gone down to $60. Are there other benefits though? To me, an example of effective leadership would be to explain why the cow was taken away. Maybe it came with a reduction in federal spending, if that's what is needed? Maybe all the cows were to be pooled to increase the capacity of infrastructure? Maybe it was only meant to be a temporary loss, and everyone can expect to get their cow back?

To ask "why did the tax cut get ignored?" isn't asking the right question. And in fact, you even went further, and suggested that such should be held up as an example of ideal leadership. But what you're saying is that the President should be patted on the back for giving everyone a chicken, when in fact, he's completely ignoring the issue of everyone's missing cow.

 

The tax cut isn't being acknowledged because it came in tandem with an effective tax increase elsewhere.

Right. We have a succession of posts where you've claimed this, but in my own ignorance I'm not aware of those tax increases and their impact on the 95% of Americans who received his tax cut. Which ones are you talking about? I know the Medicare payroll tax will increase for higher income individuals starting in 2013. Is that what you mean? That's still a few years away. You need to identify the cow that is missing before you file a missing cow report.

 

I don't know what you mean, we've already covered what it all entails, as did the original article. Everyone's paycheck is a series of line items. FICA, fed and state withholding, Social Security, pension if available, employee health premiums, etc... 99% of the population simply cares about the bottom line, the final amount.

So nobody is going to care that the administration reduced line 2 by 1%, if line 8 went up by 5% during the same time. The final result is still a 4% reduction in final pay. There's high unemployment, massive underemployment, and people don't know if they're be able to keep their house, and you're suggesting that's it's a stellar example of leadership because the average taxpayer got a $16.50 per paycheck break in one area...It's the equivalent of giving someone a high five for painting their house, while the entire structure is on fire. There's no sustained benefit, unless Obama has stock in a fiddle factory, that is.

It's certainly not a bad thing per se, but what I'm saying is that it's not a X example of any kind of leadership to simply sign off on a small reduction in the only line item that had any wiggle room. That's the basic operation of government. A leader makes tough decisions and then inspires confidence in those decisions, and as the current executive, Obama has the "buck stops here" sign on his desk. In fact, there's a strong case that could be made that in any other situation, this all would be considered a failure, not a success. So it's no surprise that the "tax cut" is being ignored.

 

Good, so at the very least you recognize that it was a tax cut which was not offset elsewhere by some kind of hidden tax increase.

In other words, it affected the bottom line of individuals either by going directly into their pockets or reducing the effect of private sector cost increases elsewhere. Now that we've gotten the confusion out of the way, we can discuss whether stimulating the economy with a temporary tax cut shows leadership in a difficult recessionary period and whether foregoing taking credit for the tax cut because to do so would potentially undermine its economic benefits is the right thing to do and demonstrates some real leadership abilities.

I think it does. I think Obama could have shown a lot more leadership during the worst part of the crisis by taking over more of the failing banks, reorganizing them with new management and different pay and bonus structures and then releasing them back into wild. I think Obama could have shown a lot more leadership by creating a massive public works energy infrastructure program to pump employment and encourage individuals to spend.

I think Obama could be showing more leadership right now by taking control of the current mortgage foreclosure crisis and using the FDIC to bludgeon the banks into line.

I think he should be doing more politically now to demonstrate the long record of Republican controlled Congresses in failing to pull back government spending.

It's interesting to me that with the one exception of healthcare reform, Obama has pretty much handled the Great Recession the way an effective moderate Republican president would have been expected to act. He's done exactly what Mitt Romney would have done.

 

Well, I don't think I ever mentioned anything about a "hidden tax increase" prior to you bringing it up just now, but I'm glad you accept my explanation.

I just don't think your comparison is valid, as Obama hasn't really done anything with the supply side of economics. An "effective moderate republican" President would have reduced government spending, reduced capital gains tax rates, offered incentives to increase infrastructure and modernization, and controlled the money supply to reduce inflation.

That's not to say that each of those are without their faults- everything has a balance of positives and negatives, after all. I think what you seem to be doing is pre-loading your criticism against any potential results in the upcoming election, but I don't think it's accurate. Because Obama has so far acted just about the opposite as a hypothetical Romney would have acted.

 

offered incentives to increase infrastructure and modernization, and controlled the money supply to reduce inflation.

To me it looks like the Treasury and Fed under Obama did exactly that latter part, to the point that we're now talking about quantitative easing to try to induce a bit of inflation.

The $787 billion stimulus package Obama signed in February 09 took care of a lot of the former. Something very similar to both of these efforts would almost certainly have been undertaken in a Romney administration.

 

And I would still disagree, although I probably should have inserted "effective" in my initial post. The 2009 recovery act was hardly targeted to increase production and/or capacity. It was mostly used as a stopgap measure for unemployment benefits, wage controls, food stamps, welfare, WIC, and to a lesser degree, on the job training.

For example- 40 billion was used to increase unemployment by 25 dollars, while 8 billion was set aside for mass transportation and high speed rail. Those amounts should have been reversed from the onset. I don't know if there was a different intent when it was being debated, but that's how it ended up. It's also why republicans in Congress tried to block it, and it looks like, in this case, their rationale was correct.

Now again, we're talking about harsh realities here. I don't have a problem with extending unemployment benefits-the recovery act extended them 11 months. (Personally, I wouldn't have also increased the rate at the same time, but whatever) but there was no plan to continue on after that. Because if unemployment benefits are extended 11 months, with no follow on plan, and no jobs are created in that time, you didn't address the problem, you just delayed it.

That's the main problem with all of Obama's decisions, in that they all seem to be shotgunned, with no unified plan in place. Or maybe it's fair to say that they were over-focused on social engineering, with very little practicality. The "cash for clunkers" program removed gas guzzling cars from the roadway, but it did nothing to address auto production and capacity. Right program, wrong time. The health reform opened up health care, but at the expense of hiring and modernization, right in the middle of a recession. Right program, wrong time. The stimulus plan you mentioned didn't actually address any supply side issues, it was used as another short term fix, and turned out to be kind of a mess. Even the withholding reduction we just discussed didn't come with any kind of overall plan.

The administration should have focused on shoring up the basics from the beginning, then moved on to social issues. Obama ended up doing everything backwards. He spent all of his political capital on his legacy issue, namely to prove that he wasn't Clinton, and has been playing catch-up ever since. I think the administration is finally realizing the folly of their ways, and we'll just have to see how things turn out.

 

While I agree with the first point (America would be far, far better off in a lot of ways if the 40 billion was spent on mass transportation, especially if it was invested in such a way that it could eventually help defray the cost through tolls or fares), I'm not sure I agree with the second point. Or rather, I'm mostly unaware of this situation, and the behavior of the Republicans in this situation doesn't seem typical. Do you have a link showing Republicans arguing for higher spending on mass transportation?

 

Yeah, erm, I'm pretty sure that was one of the things they most loudly opposed within about three days of the bills passage. What are you referring to, exactly? As I recall, Republicans involved demanding things like cutting some of the funding for public education to help trim the size of the total package. More broadly, their caucus was unhappy because they wanted more tax cuts, not because of a lack of well-targeted infrastructure projects. I'm similarly confused by your point there, though. Just off the top of my head, for instance, the stimulus bill included sizable funds for converting to electronic medical records. This is widely acknowledged to improve efficiency, reduce medical errors, and allow for better quality tracking. In short, exactly the sort of well-targeted, efficiency-improving infrastructure project you claimed it didn't do.

 

Gandy, The last sentence in my paragraph was meant to go along with the previous sentence-"I don't know if there was a different intent.." The objections were all related to the undefined social focus of the plan. I never meant to suggest that high speed rail or anything of the sort specifically held up the bill... In fact, in many cases at the state level, republican politicians have objected to transportation increases if they didn't have a sustainability plan to go along with them.

The two specific plans put forth by the GOP would have been to increase the motor fuel tax for a set period to put people to work repairing roads, but this didn't apply to new construction. The other was to form private/public partnerships which would have companies bid on the right to get government guaranteed bonds to invest in new technology like high speed rail. There are a couple of democratic governors who also agree with the second plan, so there is a lot of middle ground here.

 

We really need to maintain the infrastructure we have more than we need new projects like all of those high-speed rail proposals.

 

We need to both upgrade and maintain existing infrastructure as well as develop new infrastructure.

The infrastruture we already have is no longer the most efficient to use in the 21st century. Especially since so much has changed since, say, the Interstate Highways were first built in the 1950's (like population... a lot of our transportation networks weren't built to accomodate so many people). There is also the energy concern.

Do you really want to fall behind China, India, and Europe? America will lose its place if we only try to keep everything working as it is. When Americans stop building new things, we cease to be the place of opportunity and innovation, we cease to lead the world into a better future.

 

I was a little skeptical of spending money on high speed rail until I saw this: http://www.economist.com/blogs/gulliver/2010/10/high-speed_rail_americas_northeast_corridor

 

Are there any reasons---besides politics---why something like that takes 25 years to complete?

The Transcontinental Railroad took about six years to complete, and it was over 1500 miles long. The proposed northeast corridor looks to be under 500.

 

I have no idea. It's taken 8 years for them to replace a bridge over the train tracks near my house, even though they've been working on it every day. You still don't see the new WTC building actually going up, even though they've been actively working on it for almost a decade. Part of it could be from increased safety standards, increased labor standards, legal and bureaucratic paperwork, etc. But it still seems way too long to me. I wish we could build physical wonders of the world, matching or surpassing the ancient world, but it seems so difficult to merely maintain our 50-year-old transportation, energy, and water infrastructure.

 

Democrats shrank US spending, deficit in last fiscal year, figures show

This is a big spending administration. Don't believe the lies of the liberal media! Or something. Am I doing it right?

Heh...heh...so true this is: Republican campaign strategy 2010: We broke the **** out of this country. The Democrats are having to spend all of YOUR money to fix it. But they aren't fixing our mess fast enough. And look at all of the money they are spending! Why are they spending all of this money?! Re-elect us to run the country.

 

But FID, come on. The story is from the Agence France-Presse, which, while a big company, is most famous (or is it infamous?) for the discovery that it had no less than 8 confirmed KGB agents in its employ until their ouster and collapse of the Soviet Union in the 1990's.

The other obvious factor is that the story itself doesn't support its conclusion, and instead relies on statements from the administration itself...ie- "according to Treasury Secretary Timothy Geithner who said so in a statement...." It doesn't make the conclusions automatically false, but I'm sure everyone would at least like to see the figures used. Otherwise, it's eh...meh...

 

Plus, we all know that Obama is really a Communist sleeper agent, so it's like the exact same situation!

. . .

Anyway, the identical story from Bloomberg. In the future, really, can we try some less absurd reasons for denial?

EDIT: In all seriousness, what was your logic even supposed to be? Any newspaper that doesn't have the resources to identify agents from what was arguably the world's best intelligent service at the time in question doesn't have credibility? Do your favored news sources run counter-intelligence wings that we don't know about? Are these expenditures perhaps the real reason that traditional newsmedia is so far in the red? Come on.

 

Do you check every story that comes from AFP? Because it is only one the three largest news agencies together Reuters & Associated Press ... I mean, you do realize that like, half the news in your newspaper from one of these three, like, automatically.

* I know it more as the oldest one in the world, not especially the fact that it had KGB-spies.