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President Obama’s 2013 Budget: Five Things You Should Know

U.S. President Barack Obama's 2013 budget proposal will give Republicans and Democrats plenty to fight about.

The $3.8 trillion budget proposal, submitted to Congress, essentially follows the blueprint President Obama outlined in his State of the Union address.

That means fewer spending cuts and more taxes than Republicans will like.

So if you thought last summer's wrangling over the raising of the debt ceiling was nasty, watch the rhetorical Armageddon when those battles get re-fought in an election year.

President Obama's 2013 budget sets much of the agenda for the stormy election season ahead. These points will help you make sense of the chaos.

What You Should Know About President Obama's 2013 Budget

  1. Congress Sets the Budget: The fact is Congress, not the president, ultimately controls the federal purse strings. While much hoopla will accompany President Obama's 2013 budget, presidential budget proposals often serve more as a political billboard than a framework for how money is collected and spent by the government.

    So President Obama's budget will provide talking points for his 2012 re-election campaign and targets for the Republicans who seek to defeat him.

    "Every budget proposal is partly a serious policy document and partly a political statement,"Stan Collender, a former staffer for both the House and Senate Budget Committees, told

  2. No Budget, No Problem: Not only can Congress reject the president's budget, it doesn't even have to vote on it. Congress has little incentive to vote on the budget this year. In addition to Republican opposition, many Democrats in swing districts won't want to go on record voting for any kind of tax increase.

    Last year the Senate rejected President Obama's 2012 budget by a 97-0 vote.

    In fact, Congress has not approved a budget for over 1,000 days, getting by with stopgap spending bills in the interim.

  3. A Taxing Issue: As expected, President Obama's 2013 budget includes tax increases for the wealthy. That will keep tax issues in the spotlight this year, since Republicans have vowed to oppose tax increases of any kind.

    The president included the so-called "Buffett Rule," which creates a 30% minimum tax for anyone making $1 million or more. It would replace the Alternative Minimum Tax (AMT).

    More controversial is the proposal to tax dividends as ordinary income for those making $250,000 and up. Now the top dividends rate is 15%. President Obama would also raise the top rate on taxes on capital gains from 15% to 20%.

    Those proposals will help President Obama position himself as a defender of the middle class against the rich, while giving the GOP ammunition to accuse him of "class warfare."

  1. Another Year Older and Deeper in Debt: Although President Obama will say his budget includes $4 trillion in deficit reductions over the next decade, Republicans will tell you that the 2013 budget deficit is $1.33 trillion.

    That's the fourth straight year the president's budget deficit has exceeded $1 trillion. Expect to hear a lot about it, as the Republicans will waste no opportunity to remind Americans of President Obama's promise in 2009 to cut the deficit in half.

    It also could reignite the debate over the national debt, which is now over $15 trillion and equal to the country's annual gross domestic product.

  2. Fuzzy Math: You'd think the government would at least be able to keep accurate figures on how much money it spends, but no. It literally depends on whom you ask.

    For example, the Office of Management and Budget (OMB) put 2010 spending by the Department of Health and Human Services at $854 billion. The Census Bureau says the figure is $944 billion. Differences in accounting methods account for the whopping $90 billion discrepancy.

    And that doesn't get into all the accounting voodoo in the budget itself, which often relies on unrealistic assumptions.

    "ToWashington, these are rounding errors," Pete Sepp, executive director of the Alexandria, Virginia-basedNational Taxpayers Union, told Bloomberg News. "To the rest of America, this is real money that could help real people with real problems."

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  1. Wayne | February 14, 2012

    Yes, Congress wants to blame the President for the budget problems, the deficit, the poor economy, and taxes. And we (the voters) fall for that line, which is just what Congress wants us to believe. But the real problem is Congress. And we (the voter) don't seem to be smart enough to see through to their real purpose, which is to make themselves and their cronies (campaign contributors) richer at taxpayer expense.

    Congress has set themselves up as the "elite", the PERMANENT POLITICAL CLASS. They have set themselves up as "above the laws" that govern the rest of us. That allows them to use inside information to buy and sell stocks and to trade that information to their political investors and to influence bills to enrich themselves and their cronies. And all this at taxpayer expense. Three good books to read are: Winner Tale All Politics: How Washington Made the Rich Richer And Turned It's Back On The Middle Class by Jacob Hacker and Paul Pierson, Throw Them All Out by Peter Schweizer, and Greedy Bastards by Dylan Ratigan. They will open your eyes to just how corrupt Congress has really become.

    No matter who we elect for President in the upcoming election nothing will change if we cannot change the attitude in Congress. We need to eliminate the PERMANENT POLITICAL CLASS of Congresspeople and replace them with Congresspeople who are willing to work for the good of the nation and the "real" people of the United States. We need to eliminate the Congress that believes they were sent to Congress to enrich themselves and their political contributors. The only way we can do that is to vote out EVERY incumbent Congressperson as they come up for reelection. We (the voter) need to send the message to Congress that it is not "business as usual" in the halls of Congress and that we the "real" people of America are going to take back OUR government. We can only do that if we are willing to shut out the party rhetoric (both parties) and eliminate the PERMANENT POLITICAL CLASS that has stolen OUR government and OUR representation in government.

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