(Sorry, this is a little long).
I was glancing through Senator Obama's "Blueprint For Change" which outlines his policies and priorities, when I began to wonder how much spending has been promised. I decided to search to whole document and find out. All quotes are directly from Obama's Blueprint. Keep in mind that these are only the items that Obama has promised that include a specific dollar amount. I've done my best to weed out duplicate spending and to be generally fair. Let's start with a piece of Obama's plan I agree with:
Obama will reinstate pay-as-you-go (PAYGO) budget rules, so that new spending or tax cuts are paid for by spending cuts or new revenue (ie tax increases) elsewhere.
Well, it's about time! Keep this in mind. I'll come back to it later. Let's take a look at how much spending Senator Obama will need to offset.
First direct spending promises:
reduce a typical family’s premiums by as much as $2,500 per year (through government-funded health care)
Cost: 100 billion dollars/year (400 billion for his first term)
(Guessing conservatively, at an average of $1000 times 100 million families; this jives with Obama's own estimated cost for his health insurance plan).
$10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems.
Cost: 10 billion/year (50 billion total)
Obama will provide a $1.5 billion fund to assist states with start-up costs (of FMLA reform)
Total cost: 1.5 billion total
Create Automatic Workplace Pensions -employers who do not currently offer a retirement plan, will be required to enroll their employees in a direct-deposit IRA account that is compatible to existing direct-deposit payroll systems...His plan will match 50 percent of the first $1,000 of savings for families that earn less than $75,000.
This one is hard to price. Considering the number of families earning less than 75,000 (a large majority) the cost could be enormous. Besides, I thought social security was the answer:
“We … have an obligation to protect Social Security and ensure that it’s a safety net the American people can count on today, tomorrow and forever.
–Barack Obama, Speech in Des Moines, IA, October 27, 2007
So, we won't count that one.
Obama will invest $150 billion over ten years to deploy clean technologies
Cost: 15 billion/year (150 billion total)
Obama will create a Clean Technologies Venture Capital Fund to fill a critical gap in U.S. technology development. Obama will invest $10 billion per year into this fund for five years
Cost: 10 billion/year (50 billion total)
Obama will invest $1 billion over five years in transitional jobs and career pathway programs
Cost: .2 billion/year (1 billion total)
He will provide at least $2 billion to expand services to Iraqi refugees
cost: 2 billion total
he will double our foreign assistance to $50 billion to achieve that goal (cutting world poverty)
Total cost: 25 billion/year
Total Spending: 679.5 billion dollars.
Total ongoing yearly spending: 160.2 billion dollars.
Now let's look at new tax cuts:
Obama will cut income taxes by $1,000 for working families to offset the payroll tax they pay
Cost: 20 billion/year (if 20% of families are "working").
Obama will create a new “Making Work Pay” tax credit of up to $500 per person, or $1,000 per working family.
Cost: 20 billion/year (see above assumptions)
Obama will create a 10 percent universal mortgage credit to provide tax relief to homeowners who do not itemize. This credit will provide an average of $500 to 10 million homeowners
Cost: 5 billion dollars
an immediate tax cut averaging $1,400 to 7 million seniors
Cost: 9.8 billion dollars
Obama will create a new American Opportunity Tax Credit...This $4,000 tax credit will be fully refundable...
Also very hard to value. Potentially huge. We'll ignore this one too.
Total tax cuts per year: 54.8 billion dollars.
So, by Obama's own reckoning, every year (for at least 5 years)the federal government will need to come up with a minimum of 215 billion dollars additional tax revenue (54.8 billion + 160.2) if Obama is really going to offset these expenses. Of course this also assumes zero spending growth for every other government agency and program: Medicare, Medicaid, Social Security, Military spending, interest on the debt, Education, etc . . . . or Obama could cut spending . . . (yeah, that's going to happen).
Total federal tax revenue for 2007 was 2568 billion dollars. The needed tax increase will, therefore, be 8.4% on average for every taxpaying entity in America. The reality will be much greater for some taxpayers and corporations than others given the fact that nearly 50% of taxpayers pay no income taxes, and Obama's stated preference for raising taxes only on corporations and "the rich."
This minimum increase excludes onetime spending and several ongoing programs I listed above. It also excludes many other programs, funds, grants, commissions and panels which are promised but not given a dollar value.
It also does not include the "cap and trade" carbon reduction program which amounts to an enormous tax on energy production. It also excludes the "windfall profits tax" on the oil companies. It does not include the cost to business of increasing the minimum wage or of compliance with any of the additional regulations Obama proposes.
Finally, this assumes that nothing goes over-budget - this is the government we're talking about here.
This is the minimum cost of "change you can believe in."
