By Greg Hunter’s USAWatchdog.com ^[1]

Dear CIGAs,

This week, President Obama gave a speech outlining his plan for long term deficit reduction.  He invited the Republican leadership for what many thought would be some sort of bi-partisan federal budget 2011 solution.  In reality, it was kind of a St. Valentine’s Day massacre because right off the bat, Mr. Obama pulled out the Presidential tommy-gun and started shooting. He said, “This debate over budgets and deficits is about more than just numbers on a page, more than just cutting and spending.  It’s about the kind of future we want.  It’s about the kind of country we believe in.”

Surprise, surprise.  The kind of country President Obama “believes in” is a lot different than the Republicans.  The President said the Republican plan “ends Medicare as we know it.” Sounds to me the President will play the class warfare card during the 2012 election season because he went on to say, “The top 1% saw their income rise by an average of more than a quarter of a million dollars each.  And that’s who needs to pay less taxes?” (Click here to read the entire text of the President’s deficit speech.) ^[2]I can see why the President is playing to lower income people.  Recently, a poll revealed a majority of the poorest Americans no longer support Obama.  CNSNews.com reports, “President Barack Obama’s approval among the poorest Americans dropped to an all-time low of 48 percent last week, according to the Gallup poll, leaving the president with less-than-majority approval among all income brackets reported in Gallup’s presidential approval surveys.” (Click here to read the complete CNSNews.com story.) ^[3]

The two big issues will be billions in Medicare and Medicaid cuts (especially Medicaid) and a $1 trillion tax increase.  I see these two issues as real sticking points.  Relative to the Republican plan, the President only wants to make small changes to health care entitlements.  Obama clearly wants health care entitlements to grow, not shrink (remember Obamacare?)  Also, the Democrats and Republicans came within an hour of shutting down the government over $35 billion in cuts.  There is no way the two parties are going to agree on some compromise on a trillion bucks in tax hikes.  These two issues alone spell budgetary gridlock.  House Budget Chairman Paul Ryan said the President’s speech was “excessively partisan” and “dramatically inaccurate.” These are not the kind of words you use when you are laying the groundwork for a compromise.  I am sure Congress will play chicken again, over the budget, in the government shutdown game.

I don’t know which party has the best plan, but I do know the U.S. is in deep financial trouble.  Gridlock is not going to help with dramatic and badly needed cuts in spending.  In March alone, the federal government spent 8 times more money than it took in.  The U.S. collected $128 billion and spent more than $1.1 trillion (or $1,100 billion!)  Neither party addressed the other new welfare plan we have started for crooked bankers who have ripped-off the country and caused the financial meltdown in 2008.  The latest outrage is the $220 million in bailout money given to the wives of two Morgan Stanley bankers.  (Click here to read the complete story.) ^[4]

More… ^[5]