by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, OBAMA, TAX TIPS, TAXES
If you are an American living abroad — dubbed an “expat” — you are still expected to pay income taxes and file income tax reports to the IRS. The United States is the only country in the world that has this requirement and it is mandatory until and unless one renounces citizenship.
Being an expat in recent years has become more difficult. In 2010, Congress passed FATCA, which was enacted as a means to find foreign accounts of US taxpayers (such as a Swiss bank account). Overseas banks must also report to the IRS any bank accounts held by Americans; this has led to the unintended consequence of many banks choosing not to service expats because of the additional headache for the particular financial institution.
And now compliance has become even more onerous for expats. The IRS has announced the permanent closing its three remaining walk-in offices at the U.S. embassies in London, Paris, and Frankfurt, by the end of the fiscal year. Taxpayers abroad are expected to use the internet for all their tax needs. But woe to the international taxpayer who makes a filing mistake; you can be sure that the IRS will levy hefty fines.
Furthermore, even more simple transactions will be impacted by the office closings:
“For foreign citizens who need an Individual Taxpayer Identification Number (ITIN) to do things like sell property in the U.S. or claim dependents on a U.S. tax return, the process could be even more difficult. Ms. Otto, the accountant, says that when she was based in France, foreigners could get an ITIN by getting a notarized copy of their passport and submitting that with an ITIN application to the IRS at the embassy locations abroad.
But now foreigners who need an ITIN have to mail their passport to an IRS office in the U.S. for verification. “What person in his right mind is going to mail his passport to the IRS?” she asks.”
The number of taxpayers living abroad has grown substantially in the last five years, with some estimates as much as a 50% increase. It is certainly not a time to reduce services to our overseas Americans. However, the IRS sees fit to protest budget cuts by doing that — just not just abroad, but in all facets of customer service to taxpayers.
*To get an idea of tax compliance for expats, check out this very good, comprehensive list of important forms below
Common Overseas Tax Forms
Form 2555 & 2555- EZ: These forms are for calculating your Foreign Earned Income Exclusion (FEIE) and to calculate your Foreign Housing Exclusion or Deduction. If you meet certain foreign residency requirements, you may be able to exclude up to $99,200 of earned income in 2014 and a portion of your foreign housing expenses from U.S. income tax. Note that this exclusion does not apply to self-employment taxes. If you are self-employed abroad, you are still subject to U.S. Social Security taxes unless you live in one of the 25 countries with which the U.S. has a Social Security Totalization Agreement. The FEIE is generally advantageous to use when income tax rates in the foreign country are lower than in the U.S. and/or your total earned income is below the exclusion threshold.
Form 1116: This is the Foreign Tax Credit form and it is used to claim a credit against your U.S. income tax for income taxes paid in the foreign country. This credit applies both to foreign earned income (wages, self-employment income, etc.) and unearned income (interest, dividends, capital gains, rents, etc.). This is generally the most beneficial form to use for residents of countries with high income tax rates, those with children eligible for the additional child tax credit and those interested in contributing to U.S. retirement plans (traditional and Roth IRAs, SEPs, solo 401(k)s, etc.)
FBAR Form FinCEN 114: This form is independent of the tax return and a separate filing requirement. The FBAR applies to any U.S. person who owns, has beneficial interest or signature authority over foreign financial accounts that exceed $10,000 in the aggregate in value at any time during the year. If you have any foreign bank accounts, this also has to be disclosed on Part III of Schedule B, whether the FBAR is required to be filed or not. FinCEN 114 must be e-filed and cannot be mailed, with the absolute filing deadline on June 30, with no extension possible.
Form 8938: This form, also known as the Fatca form, is used to report Specified Foreign Financial Assets and the income derived from them. There is some overlap with the FinCEN 114 Form (FBAR), but the filing thresholds are higher, and depend on the taxpayer’s residency and marriage status, with different thresholds for the highest value reached during the year and on the last day of the year. These thresholds range from a low of $50,000 to a high of $600,000.
Other Overseas Tax Forms
Not every tax preparer will be familiar with the forms described below. If any of these forms apply to your situation, you will need to make sure that your preparer is qualified to do the work. Many of these forms are quite complex and require special training to prepare. The IRS, for example, estimates that each Form 8621 requires almost 17 hours of record-keeping and more than 14 hours to prepare. These are the forms that are most commonly missed or filed with errors. The list that follows is illustrative and not comprehensive:
If you received a gift or inheritance from a foreign person, even though it will generally not be taxable in the U.S., depending on the amount, you may have to report it in Form 3520. This form is also used to report transactions that you had with foreign trusts. If you are grantor in a foreign trust, you are likely required to file Form 3520-A in addition to form 3520.
If you run your own business in a foreign country, you may have established a company to conduct your business. Depending on the entity’s classification for U.S. tax purposes, which will be a corporation by default or will depend on the classification election made through Form 8832, you may be required to file Form 8858 if the entity is disregarded; Form 5471 if the entity is classified as a corporation; or Form 8865 if classified as a partnership. Transactions between you and your foreign company may have to be reported on Form 926.
If you live in a country with which the U.S. has an income tax convention, you may be entitled to certain treaty benefits with respect to your foreign retirement accounts, re-sourcing of certain U.S. source income to avoid double taxation, taxation of foreign social security, etc. The treaty-based positions taken in your return may have to be disclosed in Form 8833.
If you have a brokerage account or other investments (including some foreign retirement accounts) in a foreign country, these investments may be classified as Passive Foreign Investment Companies or PFICs, which are subject to special tax rules that are generally unfavorable in nature. Most foreign mutual funds and ETFs are classified as PFICS. Each PFIC you own is reported on a separate Form 8621.
Other forms that could also apply to your situation include Form 5173: Transfer Certificate which is issued by the IRS upon the death of an American citizen overseas, and is a discharge form confirming that all taxes had been paid and which is often required by banks and brokerage firms to release funds to the estate; Form 5472 for certain U.S. corporations with 25% foreign ownership and certain foreign corporations engaged in a U.S. trade or business; and Form 720, Quarterly Excise Tax Return, to report and pay excise taxes on certain foreign life insurance premiums.
Common Tax Forms – With Some Overseas Components
The following forms are common for U.S. taxpayers but also have some international elements to be aware of:
1040: Ultimately all of your income (foreign and domestic) should end up on your form 1040. Americans married to non-Americans may be able to us the Head of Household filing status instead of married filing separately. In some cases adding a non-citizen spouse (and their income and assets) to the U.S. tax return can be beneficial. All dependents on the return, must have a U.S. tax ID number.
1040: – Schedule A: Some expenses related to being overseas may be able to be claimed as itemized expenses such as certain foreign taxes, certain moving expenses and travel, mortgage interest, medical and dental expenses etc.
1040: – Schedule B: Part III of Schedule B has information related to foreign trusts and foreign bank accounts. Make sure you check these correctly.
1040: – Schedule C. If you live overseas and are self-employed, you will still have to file a Schedule C. You may be subject to U.S. Social Security though Totalization Agreements may negate the need for paying into U.S. Social Security. You will also generally be able to contribute to a U.S. solo 401(k) or SEP IRA but these may not be tax-deferred in the country where you live and work.
For more information about overseas tax returns, you should check the IRS’s website, which has thousands of pages for your reading pleasure in a section dedicated to International Taxpayers. A good starting point for any new overseas American is Publication 54: Tax Guide for US Citizens and Resident Aliens Abroad.
by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, POLITICS
A recent incident involving a woman and police officer in Indiana is a prime example of law enforcement run amok. The woman was arrested and faces charges of resisting arrest — a felony in Indiana — after she failed to immediately pull over her vehicle on a dark country road at night, and instead chose to drive less than a mile down the road to a lit, public parking lot. The woman, acknowledging the police officer with a wave, also put on her hazards as she made her way to a safer area.
The offensive officer, Porter County Sheriff’s Department Patrolman William Marshall, initially flagged her for speeding, but when he approached her in the parking lot after she stopped her vehicle there, he chastised her for not stopping immediately. Reason reported the officer saying, “What in the hell are you doing? I could arrest you for this.” She explained her rationale was safety, but, according to the officer, after she “refused to listen to how her actions put her and others in danger, Marshall said he arrested her.”
The woman, with no prior criminal record, now faces felony charges, while Patrolman William Marshall is being fully supported by his county’s sheriff’s department. The department “cited state law requiring motorists to yield to emergency vehicles and said Marshall was driving a fully marked squad car and used the lights and siren.” Never mind that the woman did acknowledge the officer; her crime was that she picked a safe, public, and well-lit parking lot instead of a dark, isolated, country road for her interaction.
Patrolman William Marshall deserves to have disciplinary action taken against him for this egregious incident. To arrest someone for not immediately pulling over a vehicle in order to ensure personal safety and liberty is contemptuous, audacious, and just plain spiteful. Such behavior is not honorable and is unbecoming of any officer. Patrolman William Marshall must be held accountable for his actions.
by | ARTICLES, CONSTITUTION, ELECTIONS, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA
I’ve been pondering the recent Harry Reid episode, where Harry Reid discussed the incident from 2012 when he openly lied about Mitt Romney not filing tax returns for 10 years. Harry Reid completely justified his behavior by stating to CNN’s Dana Bash, “”I don’t regret that at all. Romney didn’t win did he?”
How utterly different would the story be if a Republican Senator had lied in this fashion? It is absolutely incredible that Harry Reid wasn’t called out for his shameful lies. What’s more, when Romney did release his taxes shortly thereafter, disproving Harry Reid, no one issued any retraction for the blatant falsehoods.
Reid egregiously lied about the matter on three separate occasions during the 2012 Presidential election season. First, he stated in July of 2012, that Romney “didn’t pay taxes for 10 years. Now do I know that that’s true? Well, I’m not certain, but obviously he can’t release those tax returns. How would it look?”
A few days later, he spoke on the floor of the Senate, saying, “”If a person coming before this body wanted to be a Cabinet officer, he couldn’t be if he had the same refusal Mitt Romney does about tax returns. So the word is out that he has not paid any taxes for 10 years. Let him prove he has paid taxes, because he has not.”
And shortly thereafter, he referred to a unnamed, “extremely credible source” who told Reid that Romney had not paid his taxes for a decade.
This was no offhanded remark. It was a deliberate, intentional, conscious campaign to speak falsely about Mitt Romney in an effort to discredit him.
What could be considered more of an outright criminal activity than a Senator who chose to willfully lie in an attempt to influence a federal election? For someone in his position in the United States Congress, his action is an outrage. Where is the Department of Justice and the Federal Election Commission when you need them!
It’s equally distressing to consider that so many people heard Harry Reid’s accusations and just blindly accepted it. It speaks to their own bias that when they found out they had been lied to, no one was really infuriated that they were openly, blatantly manipulated.
For people to know that Harry Reid is a cheat and a liar, and yet accept his actions because the ends justified the means — what does this say about their integrity? About the credibility of this country? Have we become so cynical that we just accept this level of lying now as “politics as usual?” How can anyone actually be okay with any person, even and especially a US Senator, outright lying in order to manipulate the outcome of an election?
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, NEW YORK, OBAMA, POLITICS, TAXES
If NYC ever survives a mayor as economically ignorant as Bill de Blasio, it will be nothing short of a miracle. Not only has he been committed to “combating income inequality” by advocating raising taxes on the wealthy, now he also is pushing for a minimum wage hike to more than $13/hour as a means to bolster the economy.
De Blasio recently announced, “It’s time for New York City businesses to take bold action—not only because hardworking New Yorkers deserve a path to the middle class and an opportunity to stay in the middle class—but because giving them that opportunity would do so much to help our economy.”
His brilliant plan is to raise the wages past $13/hour in 2016, and then indexing it to inflation over the next 3 years so that the minimum wage will be $15/hour by 2019. The current wage is $8.75/hour, which will be $9.00 as of January 1, 2016. Where does de Blasio think that extra $4/hour is going to come from? He told the business owners that it’s time do “do your part”.
Unfortunately for the workers of NYC, they have a mayor who doesn’t understand that raising the minimum wage adversely affects those whom the wage hikes purport to help, especially the poorest in NYC. Less persons would be employed at $13/hour and $15/hour than if the minimum wage had not been hiked at all. Put it another way, many would see their hourly wages drop to $0/hour. That is not “opportunity”. That is unmitigated disaster.
by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, OBAMA, OBAMACARE, POLITICS, TAX TIPS, TAXES
Roughly 2 weeks ago, I wrote about the IRS sending out corrected tax forms for the 820,000 Obamacare users who received incorrect 1095As in late January. On March 22, it was reported that, “Federal officials said on a Friday press call that about 740,000 corrected forms have been mailed out or can be downloaded from the HealthCare.gov site. About 80,000 corrected forms will be mailed and available online next week”
However, it is apparent that the IRS still has not fixed those users who remain in tax limbo right now, because it was announced that those still affected with incorrect forms are eligible now for an extension until October 15 — but only if they request it.
Those other 740,000 users who didn’t receive their correct forms until the third week of March are not eligible for the extension, but instead have to scramble to get their taxes filed by April 15th. These users were delayed an additional 7 weeks after the government failed to send them their correct 1095As on time (January 31). The 1095A is the proof of insurance for tax forms, and is necessary to calculate whether or not the proper subsidy amount was given in 2014.
The kicker here is that a person must know that he or she needs to request the tax extension. Otherwise, they will still responsible to have their taxes filed for April 15th.
This is nearly as absurd as the scenario that is unfolding with the Obamacare users who are both uninsured and do not make enough income that requires them to file taxes. In order to claim the penalty exemption based on lack of adequate income…they must file a tax return. And what if they don’t know to do so? If they do not claim their exemption, they will be on the hook for the “shared responsibility” payment and “are likely to get hit with an unexpected tax bill later on.”
Obamacare continues to be an onerous, burdensome mess for this country.
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Last summer, I wrote an article about how an audit performed by the Government Accountability Office (GAO) on the government transparency site — USASpending.gov — revealed that more than 90% of the information found on the website was inaccurate.
The GAO audited spending data from 2012, the most recent year for which data is available, by comparing government agency records with those found on USASpending.gov. The GAO reported that only 2-7% of the numbers found on the website is ‘fully consistent with agencies’ records.” and that at least “$619 billion from 302 federal programs” was missing. (You can read the GAO report here).
Prior to the release of that report, Congress had recently passed the DATA Act, which was subsequently signed into law. This took USASpending.gov from the Office of Management and Budget and handed it over to the Department of the Treasury.
At the time, I noted:
“For those expecting the Department of the Treasury to fix the problem of transparency on how the government spends its tax dollars, think again. The Department of the Treasury is the parent agency of the IRS — and we all know how transparent the IRS has been with record-keeping.”
It seems that my prediction came true. The Treasury Department’s Bureau of the Fiscal Service was entrusted with overhauling the USASpending.gov website — and the new design, functionality, and transparency was unveiled yesterday. Unfortunately, the ability for citizens to find government spending information is now more difficult.
The Washington Free Beacon did a great analysis of the new design and found gems such as:
”
–Users can no longer search federal spending by keywords, sort contracts by date, or easily find detailed information on awards, which are delivered in bulk.
–Information, such as how much the Pentagon spends on Viagra, used to be available at the click of a button. Locating those same contracts on the new website is virtually impossible, akin to finding a needle in a haystack.
–In its previous form, the website provided easy access to how taxpayer dollars are spent, as it happens. A user now must have the federal grant identification number to see details of a contract.
–The list of agencies does not include smaller government bodies such as the National Endowment for the Arts (NEA), but does include the “Barry Goldwater Scholarship and Excellence in Education Foundation.” Results for the profile of “Other Small Agencies” returns zero grants or contracts, with the reply “no data found.””
The article provides a thorough analysis of how the site used to be searchable vs how searchable it is now, complete with graphics. You can read the list of examples here.
Equally distressing is the fact that “search results are also not indexed on Google, making the website’s search engine the only avenue for citizens and reporters to find information within the site. Microsoft Sharepoint operates the new website’s search, and the results are limited.”
This is yet another prime example of what constitutes “transparency” from the “most transparent administration ever”. Fittingly, the Bureau of Fiscal Service did not return requests for comment about the functionality of its new design. Kudos to the Washington Free Beacon for exposing the latest data shroud.
At least they didn’t hire the firm that built healthcare.gov.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, OBAMA, POLITICS, TAXES
Ben Bernanke debuted his new gig today, that of a writer on the “Ben Bernanke Blog”. Though he is not in charge of the Fed anymore, nevertheless he proved that he is still trying to stay relevant by continuing to be an old shill for the President.
The most ridiculous point Bernanke tried to defend was the strategy of keeping “rates low to encourage borrowing and spending and strengthen their economies.” But as Fed Chairman he knew that companies really weren’t borrowing at all and that banks were simultaneously reluctant to lend. However it was not because of the down economy — as he would have you think — but of other meddling, mitigating factors like stifling regulations, Dodd-Frank, unrelenting business bashing by President, and the constant threat of higher taxes. And because these circumstances are still widely pervasive, we have yet to see any real economic recovery.
The fact of the matter is during his tenure as the Fed Chairman, Ben Bernanke remained absolutely silent about the egregious anti-business environment. He was (and continues to be) a mouthpiece for this Administration instead of as a leader of an independent Fed.
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The New Republic recently went through an internal overhaul in order to stay relevant, and the recent drivel that was written shows that it wasn’t for the better. Last week, there was an article written called, “”Dear Politicians, Stop Calling People ‘Taxpayers'”, in which the author proposes to eliminate the word “taxpayer” from everyday lexicon because it favors those who pay taxes. You can’t make this stuff up.
The article, which was released coincidentally during the same week as the House Republican FY2016 budget, accuses said budget of being “an ideological document meant to advance a particular set of beliefs about how government should function, and toward what end”. Her evidence of such ideology is that, “in the 43-page budget, the word “taxpayer” and its permutations appear 24 times, as often as the word “people.”
Imagine that. How dare a budget — which is a plan that fleshes out income and expenditures over a period of time — should use the word taxpayer, seeing that the main source of revenue for that budget is taxes, which is paid by…wait for it…taxpayers.
She further analyzes this phenomenon by suggesting, “It’s worthwhile to compare these usages, because the terms are, in a sense, rival ideas. While “people” designates the broadest possible public as the subject of a political project, “taxpayer” advances a considerably narrower vision — and that’s why we should eliminate it from political rhetoric and punditry.”
In other words, it is a “narrow” vision to consider a budget at all from the perspective of taxpayer, from which the government derives most of its revenue. Oh, and the government is now a “political project.”
It gets better.
The author goes on to point out that Democrats also use the word “taxpayer” in their budget: “Democrats often refer to “taxpayers,” too. At 150 pages, the White House budget proposal for 2016 uses the term 26 times”. However, it’s different when Democrats use it! Really it is.
Let’s compare the two. With regard to the use of taxpayer in the House Republican budget, the author writes,
“The House budget is full of examples of seemingly straightforward deployments of the term which are, upon closer inspection, clearly furthering a particular ideology. “There are too many scenarios these days in which Washington forgets that its power is derived from the ‘consent of the governed,’” the plan reads in one instance of the term’s use. “It forgets that its financial resources come from hard-working American taxpayers who wake up every day, go to work, actively grow our economy and create real opportunity.” In other words, Americans’ taxes are parallel with taxpayers’ consent, suggesting that expenditures that do not correspond to an individual’s will are some kind of affront.”
And more,
“The report goes on to argue that “food stamps, public housing assistance, and development grants are judged not on whether they achieve improved health and economic outcomes for the recipients or build a stronger community, but on the size of their budgets. It is time these programs focus on core functions and responsibilities, not just on financial resources. In so doing this budget respects hard-working taxpayers who want to ensure their tax dollars are spent wisely.”
Put simply, taxpayers should get what they pay for when it comes to welfare programs, and not be overcharged. But, as the Republican authors of this budget know well, the beneficiaries of welfare programs tend to receive more in benefits than they pay in taxes, because they are in most cases low-income. The “taxpayers” this passage has in mind, therefore, don’t seem to be the recipients of these welfare programs, but rather those who imagine that they personally fund them. By this logic, the public is divided neatly into makers and takers, to borrow the parlance of last election’s Republicans.”
So here we have it. The use of the word “taxpayers” is bad coming from Republicans because the Republican budget takes into consideration those who personally fund government programs with their taxes. Unfortunately for the author, taxpayers don’t “imagine that they personally fund them”, but actually, truly do fund them with the taxes that they pay. This is problematic to the author, because, she writes, “the “taxpayers” this passage has in mind, therefore, don’t seem to be the recipients of these welfare programs”. (Probably not, largely because, “the beneficiaries of welfare programs tend to receive more in benefits than they pay in taxes”.)
Presumably, that is mean. It is mean to consider at all the source of revenue when writing a budget, even though budgets (are supposed to) have finite revenue limits — which, in this case of a federal budget, are the taxes collected by the taxpayer. But it’s worse than mean. It’s ideological. And narrow.
Contrast this with her defense of the Democrat’s use of the word “taxpayer” in their budget plan (she references the White House one). Taxpayer is used
“26 times, predictably invoking it when referring to cuts and reductions in services. The Budget includes initiatives to improve the service we provide to the American public; to leverage the Federal Government’s buying power to bring more value and efficiency to how we use taxpayer dollars…,” President Barack Obama writes in his introductory message. “The Budget includes proposals to consolidate and reorganize Government agencies to make them leaner and more efficient, and it increases the use of evidence and evaluation to ensure that taxpayer dollars are spent wisely on programs that work.”
So, because the Democrats talk about the “taxpayer” with regard to, and in reference to, “services” and “Government agencies”, that is good. Because Government is good. And “services” and “Government agencies” surely include everyone.
What’s really interesting is that both budgets have similar language, but one is bad (Republican) and one is good (Democrat). See here:
Republicans wrote, “this budget respects hard-working taxpayers who want to ensure their tax dollars are spent wisely”, while the President wrote, “The Budget includes proposals… to ensure that taxpayer dollars are spent wisely on programs that work” (emphasis added).
So, because the President focused his words on describing Government programs (that work), ergo, it must be true and good. And not ideological or narrow. This is reinforced by the author’s assertion further in the article that “public revenue is just that: a pool of public money to be used for the good of the public, not 300 million pools of private money each to be used to serve private individuals’ interests.” The greater good. Everyone. People. So, how dare any budget consider at all those “taxpayers” who fund it it with (taxpayer) revenue!
The final paragraph of this article, however, is the creme de la creme:
“Whereas “taxpayers” is strewn throughout political documents, “people” is associated with populist and revolutionary movements, and not for nothing. Power to the people, the evergreen revolutionary slogan trumpeted by popular fronts around the world, has a ring that power to the taxpayers does not precisely because it demands an inclusive view of public goods. The same could be said about the first line of the U.S. Constitution: “We the Taxpayers” would have been an odd construction for a nation born from a revolt against British taxation. So let’s leave “taxpayer” to the IRS and remove it from everyday speech. With every thoughtless repetition of the word, we’re carrying political water.” (emphasis original).
This is what passes for meaningful discourse these days. “Taxpayer” is now another word of class warfare, because it suggests there is a divide of “makers and takers”. The Left is content with taking our money to fund (endlessly) whatever programs it deems good — and now it is content to take our speech too.
by | ARTICLES, BLOG, CONSTITUTION, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, POLITICS, TAXES
Eric Holder recently announced his plan to move forward with prosecuting “campaign-finance “coordination” between candidates and outside groups.” This is ridiculous.
Holder has the time to do this, but yet he hasn’t even begun to compose a report on the IRS — which everyone now knows is full of very serious breaches of impropriety.
How can he find the time to develop the politically charged concept of coordination (with no real evidence); investigations are based merely on supposition. In contrast, we have actual facts and actions with regard to the IRS fiasco — which was also politically charged — and Holder has done nothing so far.
Even the WSJ recognizes the farce that this “coordination” campaign is, pointing out that “the federal government can subpoena your documents, email, computers and bank records in a political fishing expedition conducted by the FBI.”
And more: “A coordination investigation can be started on almost any pretext. All you need is an allegation that someone talked to someone they should not have. Once the investigation makes it over that low evidentiary hurdle, the feds can comb through every shred of personal and group communications to find illegal contact.”
Why is the same diligence not being applied to the substantiated, documented IRS abuses? Where is the Department of Justice report on this egregious overreach by another federal department?
Unfortunately, we already know the answer.
2015/2016 is shaping up to be a particularly nasty election cycle. You can read the scathing WSJ opinion on the matter of “coordination” here:
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So, President Obama’s FY2016 budget suffered a major defeat (again) on Tuesday night, when the Senate voted against it 98-1. This would not be the first time Obama’s budgets have been readily rejected.
Already, Republicans and Democrats had their own interpretation of what that vote meant.
“Democrats objected, saying the plan wasn’t really Mr. Obama’s, but Republicans said it had all the same numbers as the president’s blueprint, and so the vote counts as a rejection of his fiscal year 2016 plan.
“This is the president’s proposed budget,” said Sen. John Cornyn, the Texas Republican who forced the vote by offering the amendment, complete with the tax hikes, spending increases and deficit targets Mr. Obama had projected in the document he sent to Congress last month….
Sen. Bernard Sanders, Vermont independent and Democrats’ point man on the budget, said the plan Mr. Cornyn offered didn’t include a minimum wage increase or some of Mr. Obama’s other policy prescriptions, so it wasn’t a legitimate representation of his budget. ‘It is not what President Obama presented to the American people,’ Mr. Sanders said.”
Remember, this was the budget that Obama pushed forth touting “middle class economics”, both on paper and during his State of the Union. This was the $4 Trillion budget, with $2 Trillion in tax hikes over the next decade. This was the budget that used fuzzy math to boast a higher deficit reduction than it could actually deliver.
The budget rejection was reminiscent of most of the past budgets that Obama has offered. His FY2013 budget was defeated 0-99 in the Senate and 0-414 in the House; in FY2012 it was 97-0. No one wants to put their names to it.
Obama submitted his FY2014 budget late by two months, in April of this year. By that time, the House had already created and voted on a budget, as did the Senate (first time for the Senate in a few years). Incidentially, Obama’s budgets were late 4 out of 5 budget cycles through FY2014, (breaking the law, mind you), with 2010 being the only year he submitted it on time.
At least we can say that opposition to Obama’s budgets through the years have been both bicameral and bipartisan. Yes, we can!
