Content Tagged: Obama

Obamacare and Jobs and the CBO – oh my!

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February 7, 2014

This week a lot of conversation has turned to Obamacare and the January jobs report.  How do these come together?  I thought this political cartoon handled that question admirably:

144072 600 OBAMACARE AND JOBS cartoons

Randy Bish, Pittsburgh Tribune-Review, 2014

 

On Tuesday, the Congressional Budget Office released the February 2014 baseline projections for the Affordable Care Act.  The entire report can be found online.  Have students dive into the data – what does this mean?  Is this good news or bad news for the president?  How can you tell?  Backing up statements with facts is a fantastic learning tool, not to mention a skill that comes in handy in the future.

Almost immediately, the responses to the CBO report started being shown on different news outlets.  The Washington Post has a blog called “The Fact Checker” that tries to go behind the rhetoric to the facts.  This week, blogger Glenn Kessler does a great job outlining economists’ reactions to the report.  Have students compare how the Post blog compares to the blogs of economist Greg Mankiw and economist Paul Krugman on the topic of the CBO report.  Can they determine who is the conservative economist and who is the liberal economist?  What clues did they use?

UFR Lesson 2.5 gives an overview of rhetoric and what affects it has on the political landscape as well as economics and the federal budget.  How could all of this come together – the primary source of the CBO report, the three different blogs and opinions on that report, and the UFR lesson on rhetoric?

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Is the Affordable Health Care Act repealable?

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December 31, 2013

 

Economist Paul Krugman posted an interesting blog yesterday regarding the Affordable Health Care Act.  Specifically, he questioned whether or not the act had potential to be repealed after the official rollout in early 2014.

With enrollments up now that the website is working, and with more people signing up under revised Medicare requirements, the original estimate of 7 million people under Obamacare by March 2014 is not looking that odd anymore.  The benefits these people will receive, Krugman suggests, will make Obamacare irreversible for future politicos.

Compare Krugman’s information to the UFR blog post in November about the Obamacare launch and the political cartoons posted in late October.  Also consider UFR Lesson 1.2 on Medicare and the National Debt and the essential question from the lesson:  can we guarantee quality health care to the elderly in a way that is both efficient and equitable?

Have students research the changes in Medicare in 2014, and work to answer the essential question from UFR Lesson 1.2.  Then, go one step further and encourage students to make a list (perhaps in T-chart fashion) of why or why not people would want to encourage Congress to repeal Obamacare.  Students should use that information to determine if they think Krugman is right or wrong in his prediction.  Is the Affordable Health Care Act here to stay?

 

 

 

[Photo from bizjournals.com]

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Fears of Social Security and Medicare’s Demise

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April 24, 2012

The annual report on Social Security, published Monday, stated that the retirement program “is on track to go bankrupt three years earlier than expected if reforms are not made,” reports Rachel Younglai and Glenn Somerville for Reuters.  The funding for Medicare similarly appears to be depleting quickly.  Social Security, the report projected, would begin to run out of money for retirees’ pension checks in 2033, while Medicare would run out of funding entirely by 2024.

These projections relate closely to the fact that baby boomers, 78 million Americans born between 1946 and 1964, began retiring last year.  As they continue to do so, the strain on both Social Security and Medicare will increase.

Younglai and Somerville quote two trustees of Social Security as warning lawmakers that they must act quickly in order to prevent the demise of the program.  Because a large portion of the funding for Social Security comes from payroll taxes, a current suggestion for how to keep the program afloat is to raise payroll taxes.  Right now, the payroll tax on employers and employees is 12.4 percent.  The recommendation is to raise the percentage collected to 16.7.  This 4.3 percent increase is estimated to cover the growing costs of Social Security so that the benefits will continue to be paid in full.

Congressmen also have considered raising the retirement age or cutting certain benefits to the wealthiest citizens.  Because of the impending elections, however, it is unlikely that any decisions will be made regarding these issues, Younglai and Somerville report.  The most urgent issue, trustees of the Social Security fund reported, was the disability insurance program, whose funding likely will be depleted by 2016.

In terms of Medicare, Republicans are pushing to overhaul the entire program, while Obama and the Democratic party claim that his new health care plan has added eight more years of life to its funding.  Because both political parties strongly disagree on a solution, Younglai and Somerville explain again that it is unlikely for any changes to be made before the next election.

Bringing the Article into the Classroom

Teachers may begin by asking the students how the article relates the current U.S. economy to funding both Social Security and Medicare.  Why does the state of this country’s economy influence the funding of these two federal programs?  What other issues does the article point out as influencing the potential demise of Social Security and Medicare?  The teacher may also ask students to come up with alternative federal budgets, tax plans, or even Medicare and Social Security distribution plans that take into account the depleting funds.  Finally, the teacher may ask students how the issues raised about Medicare and Social Security relate to the federal budget and federal deficit.

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The Buffett Rule and Obama’s 30% Threshold

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April 13, 2012

The Buffett Rule has become a major talking point for politicians and economic specialists over the past few weeks. However complex the rule may be, Jeanne Sahadi for CNN Money provides a few basics on what you might want to know in her April 10th article. So what is the Buffet Rule exactly? The Buffett Rule, named after investor Warren Buffett, would ensure that millionaires and billionaires pay a higher percentage in their federal taxes. President Obama believes that the threshold should be no lower than 30%. According to the article:

To measure whether a millionaire is paying at least 30% of his income in taxes, the bill would take into account what the individual paid in federal income and payroll taxes plus the new 3.8% Medicare surtax set to take effect in 2013.

A big question about the Buffett Rule is how much money it would bring the federal government. From figures developed by the Joint Committee of Taxation, the rule would generate $47 billion over ten years. That said, Sahadi notes that many believe that it would complicate the tax code and do little to lower the deficit.

Teachers can use this article to further analyze the Buffett Rule with their students. Some questions to consider are: Should the threshold proposed by President Obama be more or less than 30%? Does cutting the deficit in such a small manner (billions instead of trillions) even matter? Teachers can also work on developing a tax code with their class that is more “fair” and “equal.” They should think about this in terms of the different people being taxed and what their possible reactions might be to paying varying percentages.

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President Obama’s Proposed Budget for 2013

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March 22, 2012

The Congressional Budget Office (CBO) recently received President Obama’s proposed budget for 2013. The President’s budget would add less to the national deficit than other plans, though it would still leave debt levels at the end of this decade near an alarming high. According to an article by Jeanne Sahadi for CNN Money, the CBO reported that Obama’s budget would add $6.4 trillion in deficits from 2013-2022 and bring public debt to 76% of GDP. Sahadi states that, “Debt held by the public includes U.S. bonds bought by investors, but excludes money owed to government trust funds, such as Social Security and Medicare.”

The CBO’s report shows that Obama’s proposal would stabilize the debt. This means the economy would grow faster than the deficit, possibly allowing for the deficit to have a less steep upward trajectory. If no debt-reduction plans are passed, however, the deficit will continue to rise. Based on historical trends, Sahadi believes that Obama’s budget proposal will have a hard time getting adopted in its entirety, especially during an election year. After the election, Congress must address some challenging issues, primarily the Bush-era tax cuts and whether or not to replace the $1 trillion in automatic cuts expected at the beginning of 2013.

Teachers can use this article to discuss the potential challenges facing budget negotiations. A key topic to present would be Gross Domestic Product (GDP) and the relationship it has with the national debt. Students can also work together to identify some of the national deficit issues Congress will face after the November election.

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Obama’s New Payroll Tax Law

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February 24, 2012

According to a CNN article by Tom Cohen, Obama signed a law on Wednesday that would extend the payroll tax cut, unemployment benefits, and prevent cuts in payments to Medicare doctors. With Obama’s signing, these topics are now sorted out for the remainder of the year. President Obama and his administration also released a plan that would lower the corporate tax rate as well as reduce the number of tax breaks businesses can receive. His plan lowers the corporate tax rate from 35% to 28% and outlines a proposal that would follow the “Buffet Rule,” a rule that would tax people that make an annual income of over $1 million to pay at least a 30% tax rate. Political strategists view Obama’s tax plan as a means to distinguish himself from the Republican nominee and as the groundwork for a campaign against a “do-nothing” Congress.

The extension of the payroll tax cut lowers the percentage workers pay into Social Security and also plays a key role in Obama’s economic recovery plan. From the article:

The roughly $100 billion measure, a key part of Obama’s economic recovery plan, has reduced how much 160 million American workers pay into Social Security on their first $110,100 in wages. Instead of paying 6.2% had it lapsed, they’ll be paying 4.2%, a break worth about $83 a month for someone making $50,000 a year.

Teachers can use this article and past blogs to discuss how the tax rate will influence the reduction of the federal deficit and the possible implications it could have on funding federal programs. A class debate would be an excellent idea for students to deliberate on the corporate tax rate and the positive/negatives for Obama’s lowering of it. Students could then write a short paper/essay with their opinion and use evidence from the debate to support their claim.

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Campaigning and Cutting the Deficit

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February 23, 2012

In less than one year, this country will vote to elect a new President.  As the Republican candidates spar in frequent debates, campaign advertisements, and other modes of publicity (as well as through the formal primary elections), Obama’s campaign team also has entered the public eye.  Rather than differentiating Obama from the Republican candidates through his stance on social issues, the Obama campaign has decided to look at which candidate would cut the deficit the most, reported Devin Dwyer for ABC News.

The Obama campaign recently released a memo that analyzed the budget proposals of Mitt Romney and Rick Santorum, the two frontrunners in the Republican primaries.  Dwyer reports:

Obama aides, citing studies from the Tax Policy Center and Center on Budget and Policy Priorities, conclude Romney’s public budget proposals would add $175 billion a year to the deficit.  They claim his proposed tax cuts and increased defense spending would not be adequately offset by as yet unspecified spending cutes the size of which are deemed ‘simply not plausible.’  The memo also claims Santorum’s plan would add $990 billion to the deficit in 2015.

In contrast to this memo’s conclusions, both Romney and Santorum have stated that they planned to cut government spending as President.  In an email to ABC News, Dwyer reports, Romney campaign spokeswoman Andrea Saul “did not directly refute” this memo’s analysis.  Rather, she highlighted the fact that, during the Obama presidency, the deficit has grown by over $5 trillion.

Bringing This Article into the Classroom

Dwyer’s article points to the fact that Obama’s campaign has decided to attack both Romney and Santorum for their proposed budgets and their effect on the federal deficit.  In a class discussion, you may ask your students why they think the Obama campaign is choosing to focus on the federal deficit as a campaign strategy rather than simply focusing on social issues?

This article also lends itself to a discussion on the different approaches Republicans and Democrats take to taxing and spending.  By examining the general philosophical differences of small vs. big governments, students will have a greater appreciation for why the Obama campaign sees their memo as an effective attack on the Romney and Santorum campaigns.

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President Obama’s 2013 Budget Proposal

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February 13, 2012

President Obama sent his budget proposal for 2013 to Congress today. According to Chris Moody’s Yahoo News article, in the outlined plan, Obama expresses the need to raise tax rates on the wealthy, increase funds for job training and infrastructure, and cut unnecessary spending on government programs. If approved, the federal deficit could decrease by $4 trillion over the next ten years, yet leave the federal government with a $901 billion shortfall at the conclusion of 2013.

The passing of the Budget Control Act last August, which eliminated discretionary spending by $900 billion over the next ten years, caused President Obama and the White House to make cuts to programs like Medicare and Medicaid. Moody states that the plan reduces the amount of funding for the aforementioned programs by $360 billion. Republicans have expressed their disapproval of the proposed budget because they believe it does not do enough to lower the federal deficit and does not justify the need to raise taxes. The Republicans, according to Moody, “also knocked Obama for submitting a budget that does not cut the federal deficit in half by the end of the president’s first term, a promise Obama made in February 2009.”

Republican presidential candidates Mitt Romney and Ron Paul both criticized Obama’s proposal. From the article:

“The President has failed to offer a single serious idea to save Social Security and is the only president in modern history to cut Medicare benefits for seniors,” Romney said in a statement in which his campaign also referred to the budget as “an insult to the American taxpayer.”

 

“I believe we can save Social Security and Medicare with a few commonsense reforms, and,” Romney added, “unlike President Obama — I’m not afraid to put them on the table.”

“When President Obama talks about spending ‘cuts’ it’s always some plan that will supposedly unfold over a decade and that the next president or Congress can change at whim,” Paul’s campaign said in a statement on its website. “In other words, cuts never happen. But budget deficits, as evidenced above, happen every year. And they will continue to happen every year. President Paul would offer $1 trillion cuts in the first year.”

 

Teachers could use this article as a class warm-up or “Do Now” to talk about the federal budget. Teachers could then use the provided link to read President Obama’s remarks on the budget and how he presented them to the American public. The White House blog has the digital edition of the budget at the bottom of the webpage (257 pg. document). Students could evaluate some of President Obama’s proposals and address these questions: What might be some issues of debate between Republicans and Democrats? What proposals will need modification for support from both sides? How does the proposal further address the federal deficit? How might the budget influence domestic policies like Social Security, Medicare, and national security? Upon discussing these questions, students should have a stronger understanding of how the federal budget impacts the federal deficit and the types of discussions that occur between the two major political parties involving the appropriation of governmental funding and taxation.

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The State of our Economic Union

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January 25, 2012

On Tuesday night, President Obama addressed Congress in the annual State of the Union speech.  The transcript of his speech may be found here. In just under an hour, Obama called attention to his accomplishments, described his plans for the future, asked Congress to try to overcome partisan difference to get things done, and invoked the American Dream as the ideal to which our country is striving.

During the speech, Obama only mentioned the federal deficit twice.  The first mention was buried within the first ten minutes.  He declared: “American manufacturers are hiring again, creating jobs for the first time since the late 1990s.  Together, we’ve agreed to cut the deficit by more than $2 trillion.  And we’ve put in place new rules to hold Wall Street accountable, so a crisis like this never happens again.”  In this mention, the agreement to cut the deficit seems to be just another of his many accomplishments.  It merely is part of a list, sandwiched between job creation and new regulations for Wall Street.

The second mention is much more informative and complete. He explains:

“When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings.  But we need to do more, and that means making choices.  Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans.  Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households…As I told the Speaker this summer, I’m prepared to make more reforms that reign in long-term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.  But in return, we need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes.”

According to Obama, the key to lowering the deficit is twofold: the government needs to act more frugally and reform policies that are expensive, and it needs change the tax code so that wealthier citizens pay more.

If your students were not required to watch the State of the Union, you could assign students to read parts of the speech or articles describing the speech.  Due to the fact that the State of the Union may be found on so many different media, you may assign students to pick one medium to watch/read/listen to the speech.

You may begin a discussion on Obama’s speech by asking: how did Obama first bring up the government debt? Why does he mention it within the context in which he does?  When else does Obama address the federal deficit, and what does he propose to address the deficit?  Why did Obama only dedicate two sentences to addressing an agreement made by Congress that took months to decide?  What do you, as students, think about his proposals? What are alternatives to what he proposed?

Because Congress currently has a Republican majority, many critics claim that Obama will not be able to get any of his proposals done during his last year of this term.  Others say that this State of the Union was the Obama’s response to the Republican primary candidates’ criticism.  What do your students think about these two criticisms?

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Will the Debt Ceiling Rise by $1.2 Trillion?

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January 23, 2011

Will the federal deficit increase even more in 2012? This question remains a topic of debate for many politicians in Washington this month as President Obama announced the need to raise the debt ceiling by another $1.2 trillion. According to a January 12, 2012, article by David Lawder for Reuters, President Obama sent a message to John Boehner (R-Ohio), the House of Representatives Speaker, stating that more money would be needed to “meet existing commitments.” If this proposal passes, then the total nation debt would surpass the $16 trillion mark.

As stated in the article, there is very little time for lawmakers to vote against Obama’s proposition, thus preventing a similar crisis that nearly brought Congress to default in the summer of 2011. However, many Republicans see this proposal as a chance to present Obama as an economic squanderer and hopefully dampen his chances of obtaining a second term in office. From the article:

“The President’s runaway borrowing threatens the foundation of our economy and the financial future of every hardworking American,” said Senator Jeff Sessions, the top Republican on the Senate Budget Committee.

 

The debt limit increase by President Obama was originally planned to occur in December, yet officials asked him to wait until Congress came back into session in 2012. To continue funding the “existing commitments,” the Treasury Department has had to pull money out of Exchange Stabilization Fund and might have to take other measures until the new debt ceiling is established. Lawder also states that the debt limit has “increased by $900 billion since last summer’s debt brawl to $15.194 trillion.”

Teachers could use this article to discuss with students the need to increase the federal deficit ceiling. Some questions to consider: What are the “existing commitments” President Obama speaks about? What federal programs might experience cuts for this debt increase? What programs might receive more funding? How does this increase impact the local and state levels of government? To what extent does this debt increase influence American foreign trade and humanitarian policies? Students should look at President Obama’s proposal from a variety of perspectives in order to better comprehend how the raising of the debt ceiling impacts local, state, national, and international spheres.

Students could also see how President Obama presents this topic during his State of the Union on January 24, 2012. How might he put forth this idea to the American people? What do political commentators say about it after the address? Listening to a range of viewpoints should allow students to see how complex the issue of increasing the national debt is to media and political outlets.

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