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State of the Union Leaves Taxpayers with $21 Billion Tab

by Douglas Kellogg / /

Last night, President Obama delivered a State of the Union speech that was high on rhetoric about spending restraint and tax reform, but low on details. That grey area may end up costing taxpayers. The National Taxpayers Union Foundation pinned down five items to increase spending, three to cut it, and seven where the cost is unclear, for a grand total of $21 billion.

In the wake of the President’s address, taxpayers are left to estimate the cost of the President’s often vague proposals, which may drastically add to the current $21 billion tab once the details of the White House’s budget are released.

Still, there were a few encouraging notes. The President did make statements indicating tax cuts grow the economy and create jobs: “Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.”

He also called for freezing federal discretionary spending an additional two years, saving taxpayers $15 billion per year. Malpractice reform, with savings of $2.06 billion a year, made a comeback last night after failing to get included in the health care bill.

President Obama also issued a broad promise to reorganize the government, partly in the interest of increased efficiency. Yet, efficiency was not achieved when the Department of Homeland Security was created amongst promises of better government.

In a troubling sign, the President proposed to “invest in tomorrow’s energy,” “instead of subsidizing yesterday’s energy.” That’s code for taking away widely-available tax deductions and credits, but only for oil and gas companies, while showering more federal favors on so-called “alternative” energy. In reality, the latter sources, such as wind, solar, and ethanol, have been propped up with taxpayer dollars for decades. So is this the Presidency of Barack Obama or Jimmy Carter?

However, President Obama is effectively double-counting revenue from his discriminatory tax hike on oil and gas. It was the “pay-for” in the Senate for repealing the health law’s burdensome 1099 requirement, a repeal he signaled signaled support for last night. But he also mentioned oil and gas tax-hikes as the "pay-for" on another round of initiatives to buy alternative energy usage. So what are they actually paying for? The President issued a similar pitch for tax hikes on oil companies last year, which did not go anywhere even in the Democrat dominated Congress. So perhaps they will not end up paying for anything.

As the White House releases the details of the budget proposal, taxpayers should be concerned that the initial $21 billion of spending laid out in the State of the Union will increase. Here’s hoping they’ll be pleasantly surprised with more savings instead.