OBAMA, THE PROMISE BREAKER
Yes, campaign promises are a dime a dozen and few people believe most of them.
But even for someone who promised the moon to so many, Barack Obama’s campaign promises are being quietly shelved or thrown under the bus at an unusual rate.
His tax policies are in ruins. And many of his prized ideas are now going to have to be financed through tax increases on every working American or their cost added to the ever ballooning deficit - the result of George Bush’s massive bailouts.
Then there’s his personnel choices which hardly give substance to his call for “change.” The establishmentarians he has hired on to run his national security and economcs shops fall laughably short of any promise for a “fresh breeze” to blow through Washington - more like a fetid wind of revolving door government.
Does this make Obama a failure? Not hardly. In a sense, it might have done more good than we realize at this time. Disabusing the new president of some of his more problematic notions of governance could very well moderate some of his policies and cause him to scale back some of his more grandiose plans on education ($4,000 tax credit in exchange for “community service”), the environment (1 million hybrids on the road by 2015), and most of all, the “middle class tax cut” which could add another half trillion to the deficit.
You could certainly blame some of Obama’s problems on the Bush deficits but not all. Much of Obama’s problem lies with his dishonest accounting of how he was going to pay for his programs to begin with. That, and a shortsightedness about the vagaries of the oil market will now doom almost all of his domestic initiatives to the ash heap.
With oil trading at below $50 bbl and OPEC apparently unwilling to cut production very much, the Obama team is quietly shelving one of the cornerstones of their economic program - a “windfall profits tax” on the oil companies.
Obama’s promise to give every American family a $1,000 “energy rebate” seems to have come a cropper of - what else - reality.
Obama and Biden will enact a windfall profits tax on excessive oil company profits to give American families an immediate $1,000 emergency energy rebate to help families pay rising bills. This relief would be a down payment on the Obama-Biden long-term plan to provide middle-class families with at least $1,000 per year in permanent tax relief.
How about his other tax raising proposal - the one he was going to foist upon the rich? That, too, has gone the way of the dinosaurs as his broken promise will now raise taxes on everybody because he plans to roll back the Bush tax cuts when they expire at the end of 2010.
To argue, as Obama defenders try to do, that this is not a tax increase is laughable. When you pay X amount in taxes one year and the following year you pay Y amount, with Y being a larger sum of money than X, most kindergartners - and maybe even some liberal economists - would call that a tax increase. And those tax cuts affected people in all income brackets - not just Obama’s idea of who is or who isn’t “rich.”
How about those 5,000,000 “green jobs” that were going to be funded by the oil tax revenue that was going to be invested in new technologies? Gone, along with the silly notion that taxing oil companies will create more oil or even bring down the price of the commodity. The market proved more efficient than anything or anyone in the US government in deciding how much people will pay for energy.
Do the math. Obama was expecting hundreds of billions of dollars from this tax to fund his social welfare schemes. He was expecting tens of billions more by increasing taxes on “the rich.” He either must shelve almost all of his program or raise taxes on everybody - substantially.
President-elect Barack Obama is not planning to implement a windfall profit tax on oil companies because prices have dropped below $80 a barrel, an aide said on Tuesday.
“President-elect Obama announced the policy during the campaign because oil prices were above $80 per barrel,” an aide on Obama’s transition team said. “They are currently below that now and expected to stay below that.”
Oil prices have fallen from a record $147 a barrel in July to under $50 this week.
Obama, who signaled early in his campaign for the White House that he would take an active approach to oil markets as president, had planned to use the revenue from a windfall profits tax to fund a tax rebate for low- and middle-income families struggling with high energy prices.
But the aide said Obama’s presidential campaign had already taken the price drop into account six weeks ago. When Obama laid out his economic plan for the middle class in mid-October, revenue from a windfall profit tax was not included because of the price change, he said.
Oil companies steadfastly opposed a tax, saying it would stifle exploration and innovation.
Obama is whistling past the graveyard if he thinks he can fund the massive giveaway that polls show was the major reason for his electoral win. With trillion dollar deficits staring him in the face it would be fiscal madness to advance the kind of broad based rebate and handout that he so proudly pushed when running for president.
The dash of reality about revenue that this pullback represents calls into question some of the primary goals of his Administration. Unless he is willing to push marginal tax rates much higher than he said during the campaign, it appears he will have to renege on that promised giveaway of hundreds of billions of dollars.

