4 Trillion Dollars

Mr. Obama's budget will ask for more than 3.5 trillion dollars for the fiscal year 2010 in spending, and an additional sum of 750 billion will be reserved for additional bank bailouts. No, that 750 isn't part of the 3.5 trillion-- it's in addition to it. It's interesting to note that this figure is 50 billion more than the original bailout approved by Bush. (Although, to be fair, Mr. Obama left the campaign trail to vociferously demand that it be passed while he was still in Congress.)

According to a "senior administration official", the budget will be between 3.5 and 4 trillion beginning October 1st.

634 billion will be set aside for the anticipated Universal Health Care Obama wants implemented. (What model exactly will be used isn't known. ) It's also anticipated that the cost could go up to 1 trillion for this program.

How is he going to pay for it?

Raising the tax rates on the salaries, dividends and capital gains of those making more than $200,000-$250,000, and phasing out their exemptions and deductions, can raise only a small fraction of the amount. Even if we have a strong economy, Mr. Obama's proposed tax hikes on the dwindling ranks of high earners would be unlikely to raise much more than $30 billion-$35 billion a year by 2012.

Besides, Mr. Obama does not claim he can finance his ambitious plans for tax credits, health insurance, etc. by taxing the rich. On the contrary, he has an even less likely revenue source in mind.

In his acceptance speech at the Democratic convention on Aug. 28, Mr. Obama said, "I've laid out how I'll pay for every dime -- by closing corporate loopholes and tax havens." That comment refers to $924.1 billion over 10 years from what the TPC wisely labels "unverifiable revenue raisers." To put that huge figure in perspective, the Congressional Budget Office optimistically expects a total of $3.7 trillion from corporate taxes over that period. In other words, Mr. Obama is counting on increasing corporate tax collections by more than 25% simply by closing "loopholes" and complaining about foreign "tax havens."

The administration has identified some preliminary savings it will ask Congress to approve.

Phase out of direct payments to farms (mainly corporate ones) with sales revenue of more than $500,000 per year. This two-year phase out of payments, which go to 25 percent of all farms receiving direct payments, is projected to save $9.8 billion over 10 years. It will also ask Congress to abolish payments for the storage of cotton, generating a projected 10-year savings of $570 million.

Eliminate the tiny Federal Mentoring Program, an initiative started in the second Bush presidency that costs $49 million a year. The administration says this program was added to more than 100 other youth-oriented programs at 13 different agencies. The 10-year savings is projected to be $500 million.

Eliminate a small tax cut known as the "Advance" Earned Income Tax Credit. Projected 10-year savings is $880 million.

Require investment managers (almost exclusively private equity and hedge fund managers) to pay their standard income tax rate -- instead of the current 15 percent rate -- on their income from annual fund profits. This is known as a "carried-interest" loophole because fund managers or investment managers typically pay income tax rates at their normal rate, but only 15 percent -- the current capital gains tax rate - on a portion of the fund's annual profits (upwards of 20 percent).

The administration will seek an additional $300 million to hire additional IRS agents to police and collect a portion of an estimated $350 billion in uncollected taxes. It will also seek "legislative and enforcement measures to reduce tax evasion and avoidance," including steps to "limit U.S. corporations' ability to deduct currently expenses allocatable to deferred foreign earnings." Translated, the administration will try to crack down on offshore tax shelters used by corporations and individuals to shield income earned in the U.S. from the IRS.

The president will seek significant savings from Pentagon procurement. No details or cost savings were specified but are expected Thursday when Defense Secretary Robert Gates briefs reporters on the overall defense budget.

So, let me see if I've got this right- Mr. Obama plans to increase spending on social programs to an unprecedented level, gut the military while we're at war, tax business and rich at a level that the average citizen would revolt over, and then spin the whole thing as good for the economy.

Mr. President-- have you taken a look at California lately? This is exactly what they did, and look at what it did. Small businesses went broke, big business left the state, citizens who were able to work are leaving the state in record numbers. California Democrats have literally created a welfare state. It's broke, and it doesn't work.