Sen. Orrin Hatch was criticized for expressing outrage that half of Americans don’t pay any federal income tax, while at roughly the same time he was defending tax breaks for oil companies. In a conversation with the senator he didn’t back away from the statements.
Hatch claims the Obama administration is dismantling Clinton-era welfare reforms that put work as a priority to receiving benefits. Less than a generation ago, he says 41 percent of U.S. households did not pay any federal income taxes. Today, that number is 51 percent. Any system where that kind of tax disparity exists among income levels is dysfunctional, adds the senator.
As to tax breaks for oil companies, Hatch said that the biggest oil companies are drilling in Brazil, rather than the U.S. He maintains that the tax breaks mostly benefit smaller, independent firms that are taking risks to find more deposits of oil. He also expressed frustration that the Obama administration is holding up oil development permits that could be used to achieve energy independence. Hatch cited oil shale development in the intermountain West as viable future sources that would ultimately cost consumers, in his opinion, far less than current oil prices do today.
The senator rejects ideas of a sales tax and believes that taxes, once the recession ends, will move up to about 18 percent of the GDP. He believes that spending as a part of GDP should not exceed 20 percent. In my opinion, that’s going to be a tough accomplishment, given the high levels of future obligations over the next several decades for Medicare and Social Security.
Hatch also cited information from a Heritage Foundation study as evidence that President Brack Obama is a huge spender. His claim that Obama has dismantled Clinton-era welfare reform comes from a Heritage Foundation report that says only one of 70 welfare programs — Temporary Assistance to Needy Families — has a work requirement. The same report also claims that Obama’s 2011 budget ups welfare spending 42 percent from President Bush’s last year in office. (Read)
Hatch certainly sees the upcoming 2012 elections as a nationwide referendum on what the size and scope of government should be in the U.S over the next decades. (One would have preferred that the senator had been more concerned about that during the Bush administration.) However, the senator is correct that we are at a crucial point when it comes to how we decide to deal with rising entitlements and a squeezed middle class and poor. (Poverty is a strange deal now, though. When the “poor” riot in England or do “flash mob” violence here, they steal from electronics stores instead of grocery stores.)
Will we cut harshly by dramatically cutting benefits or will we find revenues — through raising payroll taxes for the rich or adding regressive sales taxes designed to meet Medicare, etc. needs. Frankly, I doubt we have the will to do anything but the latter. But the senator believes the former can be done, and he is hoping that the conservatives who make up the Utah Republican state delegation believe he is sincere.