The Ballooning Fiscal Deficit and Obama Administration - Essay Example

The Chief Executive has his work cut out for him and reconciling everyone into the idea of buying into all the contents of his proposal is something next to impossible. Already the liberal wing of his party is into abandoning the new tax deal and the Republicans are much on their way to scrutinizing every fiber of it. Economists analyzed that savings are indispensable for the government at this point to keep the deficit at its minimum of 3% by 2015 to make it sustainable for the gross domestic product. This is a way to balance off the more productive year to the previous shortage from the previous one. This calculation, developed by Alan Auerbach and William Gale was a substantial attempt to alleviate national debt in a plausible manner (Leonhardt, par.2-4). This takes into consideration the prospective effect of the Boomers on the budget of the Federal government by 2030. This emphasizes the importance of the next 20 years in the budget woes of the United States which is in dire need of a solution before things go way out of control to be remedied beyond repair.

The proposed tax cut deal provides for further tax cuts favoring the middle class over high-end tax cuts as supported by Republicans. Here, it could be seen that it provides for a year’s worth of payroll tax cut for workers as well as a year and a month’s lengthening of aid for the jobless to help boost the ailing economy. This poses a problem as it is inimical to the $900 billion deficit that it will bring about (Herszenhorn and Gaystolberg, par.5-7). The deal as perceived in both Houses is deemed to be rough around the edges if not unviable. New York Democrat Anthony Weiner even went candidly by saying, “I don’t think the president should count on Democratic votes to get this deal passed” (par. 9). While the Republicans are also clamoring on their side on the supposed merits of the proposal. Obama stands on firm conviction on the need to protect the interest of middle-class Americans who make up the majority of the population as legislators raise concern over the widening of government financial deficit with the tax cuts.

According to Project Vote Smart, individual income taxes make up 48%, social security collection is 34% and corporate income taxes is 10% (n.p.). Measures that will diminish the bloodline of the state would necessarily lead to borrowing which is synonymous with deficit. If this financial deficit is not paid, which most likely will not be considering the status of the economy, the national debt will also augment.

A democracy with all the encompassing ideals accepted will have polar sides, as James Madison has so eloquently put it “It must be confessed that in this, as in most other cases, there is a mean, on both sides of which inconveniences will be found to lie” (par. 19). This middle ground must be found and in the case of the tax deals it will most likely find it in revising the proposal to settle a compromise that will not jeopardized the budget deficit yet simultaneously providing relief on the American people. This is the most ideal scenario for both camps. The President has to concede to some of the points of the Liberals and the Democrats and vice versa.