The people working for the Congressional Budget Office better be careful. If they keep coming out with bad news for President Obama he might sic the IRS on them. Their latest projection is that his minimum wage increase will add to the federal deficit.
The Washington Free Beacon has the news:
President Barack Obama’s proposal to raise the minimum wage to $10.10 per hour will cost the private sector $15 billion and increase the deficit by $5 billion over the next 10 years, according to a Congressional Budget Office report released Wednesday.
Private employers will lose $15 billion through higher wages for workers and smaller tax breaks for reinvesting money into a company, a move the CBO said “mostly affects small- to medium-sized businesses.”
State, local, and federal governments will spend $1 billion more on higher wages and prices over the next ten years. Those cost increases are ten times higher than the thresholds set forth in the Unfunded Mandates Reform Act, which calls on government agencies to avoid deficit increases.
The nonpartisan office found that the Senate’s minimum wage bill would drive up prices the government must pay for goods and services, while also leading to lost tax revenue. (Read More)
All of that, and for what? It won’t reduce poverty. For those who lose their jobs it will make poverty worse. But President Obama and the Democrats don’t care. They see it as a win-win situation. Say four out of six minimum wage workers benefit from a minimum wage increase. They’ll vote for the people who increased their rate of pay. The two who lose their jobs might be mad at first, but chances are they’ll vote for the people who promise extended unemployment, food stamp increases, free cell phones, and other benefits that make living in poverty a little more comfortable.
This is all just part of the Democrats’ election playbook chapter on buying votes with other people’s money.