Explore Freedom

Explore Freedom » The One Good Thing That Happened During Obama’s First Term

FFF Articles

The One Good Thing That Happened During Obama’s First Term


It has been said that every president makes you nostalgic for his predecessor. This has been true since John Adams signed into law the Alien and Sedition Acts in 1798. But since the election of Barack Obama in 2008, I think I have heard it said more often than usual.

Although I am not the least bit nostalgic for any of the eight years of the presidency of George W. Bush, I fear that four more years of Obama might make me change my mind. I would modify the presidential aphorism to: Every Democratic president makes me nostalgic for Grover Cleveland and every Republican president makes me nostalgic for Warren Harding. Even that, of course, would be no utopia. But at least those presidents were relatively laissez faire and didn’t wage wars on Americans’ civil liberties at home and against foreigners abroad.

Barack Obama has now been sworn for his second term. Much has been written and will be written on what a disaster for life, liberty, and property his first term has been. Libertarians such as Anthony Gregory, Doug Casey, and yours truly have harshly criticized the president, but I will not quote them here. Conservatives such as John Whitehead and Jonathan Turley have done likewise, but I will not quote them here either. For an overview of just how disastrous the first term of Obama has been, I turn to progressive Glenn Greenwald:

The candidate supported by progressives — President Obama — himself holds heinous views on a slew of critical issues and himself has done heinous things with the power he has been vested. He has slaughtered civilians — Muslim children by the dozens — not once or twice, but continuously in numerous nations with drones, cluster bombs and other forms of attack. He has sought to overturn a global ban on cluster bombs. He has institutionalized the power of Presidents — in secret and with no checks — to target American citizens for assassination-by-CIA, far from any battlefield. He has waged an unprecedented war against whistleblowers, the protection of which was once a liberal shibboleth. He rendered permanently irrelevant the War Powers Resolution, a crown jewel in the list of post-Vietnam liberal accomplishments, and thus enshrined the power of Presidents to wage war even in the face of a Congressional vote against it. His obsession with secrecy is so extreme that it has become darkly laughable in its manifestations, and he even worked to amend the Freedom of Information Act (another crown jewel of liberal legislative successes) when compliance became inconvenient.

He has entrenched for a generation the once-reviled, once-radical Bush/Cheney Terrorism powers of indefinite detention, military commissions, and the state secret privilege as a weapon to immunize political leaders from the rule of law. He has shielded Bush era criminals from every last form of accountability. He has vigorously prosecuted the cruel and supremely racist War on Drugs, including those parts he vowed during the campaign to relinquish — a war which devastates minority communities and encages and converts into felons huge numbers of minority youth for no good reason. He has empowered thieving bankers through the Wall Street bailout, Fed secrecy, efforts to shield mortgage defrauders from prosecution, and the appointment of an endless roster of former Goldman, Sachs executives and lobbyists. He’s brought the nation to a full-on Cold War and a covert hot war with Iran, on the brink of far greater hostilities. He has made the U.S. as subservient as ever to the destructive agenda of the right-wing Israeli government. His support for some of the Arab world’s most repressive regimes is as strong as ever.

Most of all, America’s National Security State, its Surveillance State, and its posture of endless war is more robust than ever before. The nation suffers from what National Journal’s Michael Hirsh just christened “Obama’s Romance with the CIA.” He has created what The Washington Post just dubbed “a vast drone/killing operation,” all behind an impenetrable wall of secrecy and without a shred of oversight. Obama’s steadfast devotion to what Dana Priest and William Arkin called “Top Secret America” has severe domestic repercussions as well, building up vast debt and deficits in the name of militarism that create the pretext for the “austerity” measures which the Washington class (including Obama) is plotting to impose on America’s middle and lower classes.

Turley and Greenwald have pronounced Obama as one of the worst presidents ever when it comes to civil liberties.

None of this should have come as any surprise. In the New American magazine’s “Freedom Index” (a congressional scorecard based on the Constitution) for the 109th and 110th Congress, Obama’s scores as a senator were 21 and 11, making him one of the most anti-freedom members of the U.S. Senate at the time.

Obama’s first term was so bad that I can only think of one good thing that happened, politically, that he instigated, during the time that he was president beginning in January 20, 2009. And I don’t mean the end of the Iraq War. Although speakers at the Democratic Convention said Obama should be reelected because he “ended the war in Iraq,” the truth is that the “status of forces agreement” governing the departure of U.S. troops was actually negotiated in 2008 when Bush was president. If Obama had wanted to end the Iraq War, he could have ordered all U.S. troops home on the day he was inaugurated. Had he done so, 257 U.S. soldiers would still be alive.

The one good thing that happened during Obama’s first term was unprecedented. Republicans never would have done it on their own. It is something that benefited every working American.

Obama lowered the Social Security tax rate.

As part of a deal to extend the so-called Bush tax cuts, which were due to expire at the end of 2010, Congress enacted some temporary tax measures in the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act” (TRUIRJCA) that was signed into law by Obama on December 17, 2010.

The six tax brackets of 10, 15, 25, 28, 33, and 35 percent were extended for two years; the estate tax, which had been eliminated, was revived with a $5 million exemption and a maximum rate of 35 percent; unemployment benefits were extended for an additional year; and the employee share of the Social Security payroll tax was reduced by 2 percent for one year. The employer share remained the same, as did the employer and employee share of the Medicare payroll tax, currently 1.45 percent.

Social Security is “funded” by payroll tax deductions from both employers and employees. After beginning at a rate of 2 percent (split between employers and employees) on a taxable wage base of $3,000, the rate soon doubled and then steadily increased, sometimes every year. By 1990 the rate was up to 12.4 percent with a wage base of $51,300. One reason for that is that Ronald Reagan, whom Republicans revere as a tax cutter, signed into law the Social Security Amendments of 1983 that increased the Social Security tax rate from 10.8 percent in 1983 to 11.4 percent for 1984-87, 12.12 percent for 1988-89, and 12.4 percent beginning in 1990.

In one of his weekend radio addresses in August 2011, the president proposed extending the temporary Social Security payroll tax cut: “There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend.” It came as something of a surprise that Republicans weren’t too enthusiastic about the idea.

But at the end of 2011, just before the rate cut was due to expire, Congress passed the “Temporary Payroll Tax Cut Continuation Act of 2011,” which extended the rate cut through February 29, 2012. Then, in February, just before the rate cut was again due to expire, Congress passed the “Middle Class Tax Relief and Job Creation Act of 2012,” which further extended the rate cut through the end of 2012. In a speech after Congress passed the payroll tax cut extension bill, Obama said Congress “did the right thing,” and mentioned the spillover effect it would have: “More people will spend money and more businesses in turn will be prodded to hire workers, and so ‘the entire economy’ gets a boost.”

Although the working poor generally don’t pay any federal income tax, they do pay Social Security tax on every penny of their wages. The Social Security tax is a regressive tax that harms those least able to “afford” it because wages are taxed only up to the Social Security wage base, currently $113,700. Thus, higher-income persons pay a much smaller percentage of their income to the government in the form of Social Security taxes. Nevertheless, the 2 percent rate reduction in the Social Security tax was a benefit to all Americans who earn an income — and especially the working poor — because it allowed them to keep that much more of their money in their pockets and out of the hands of the federal government. Two percentage points is a significant rate cut when the rate is 6.2 percent. And that was the only time in history that the Social Security tax rate had decreased.

None of that means that Obama did not preside over tax increases. Obamacare is just a collection of tax increases masquerading as a health-care law. Beginning with a 10 percent tax on indoor tanning services that began on July 1, 2010, it contains numerous other new taxes and tax increases that are to be phased in gradually from 2011 to 2018. Pre-tax dollars from a health-savings account (HSA), a flexible spending account (FSA), or a health-reimbursement account (HRA) can no longer be used to purchase nonprescription medicines. The tax for nonmedical early withdrawals from an HSA for those under sixty-five increased from 10 to 20 percent. The maximum annual FSA contribution for employees went from no limit down to $2,500. There is now a 2.3 percent excise tax on the sales by manufacturers and importers of commonly used medical devices. Itemized deductions for medical expenses now have to exceed 10 percent of adjusted gross income instead of 7.5 percent. The employee share of the Medicare tax has increased from 1.45 percent to 2.35 percent on income greater than $200,000 ($250,000 for married filing jointly). There is a new 3.8 percent Medicare tax on investment income. And of course, there is the “tax” for not having a government-approved health-insurance policy.

I guess Obama, at least in this sense, is just like Reagan: cut some taxes and raise others.

Alas, it has also been said that all good things must come to an end. In the “American Tax Relief Act of 2012” recently passed by the lame-duck Congress to avert the “fiscal cliff,” unemployment benefits that had already been extended were again extended for an additional year; the Bush tax cuts were made permanent, but only for those making up to $400,000 a year ($450,000 for married couples); the top marginal tax rate was increased to 39.6 percent; the estate tax increased to a maximum rate of 40 percent with a $5.25 million exemption; and the one good thing that happened during Obama’s first term — the Social Security payroll tax cut — was allowed to expire.

  • Categories