Deficit reduction and priorities


questionall: via thetruthnow.org

And how about all that defense spending when we’ve supposedly ended the Bush Wars? Or all the federal money paid to highly profitable oil companies? Or $77,000 tax deductions for dancing horses for the super rich? The GOP needs to trim their favorite expenditures before they talk about tapping into the safety net that millions must rely on to simply live.

257 to 167

The measure, brought to the House floor less than 24 hours after its passage in the Senate, was approved 257 to 167, with 85 Republicans joining 172 Democrats in voting to allow income taxes to rise for the first time in two decades, in this case for the highest-earning Americans. Voting no were 151 Republicans and 16 Democrats. — NBC News

There’s an incredible number of articles / posts that are judging the “winners” and “losers” of yesterday’s lengthy House soap opera (see this). I happen agree with John Cole’s assessment the most:

The winners in all of this are Obama, the Senate, and Nancy, who once again impressively whipped her caucus and had only 16 no votes. The vote was effectively over when 30 Republicans voted in favor, but Pelosi still managed to keep all but 16. I have no idea who they are, but I am sure it will be an mix of folks voting against for idiosyncratic district regions and a few diehard progressives. Pelosi is perhaps the best leader I have ever seen at whipping her caucus. She’s better than DeLay, and she leaves no fingerprints. She’s really fucking amazing.

The biggest loser, I think, is Cantor, who came out against the bill before Boehner and then could not deliver 218 votes for an amended bill. Boehner probably worked with Pelosi and delivered the necessary votes from safe districts and then released others in more difficult situations to vote against. Don’t be confused by the small number of Republican “yea” votes, as right now, Cantor, Louis Gohmert, the teahadists, and manic progressives like Matt Stoller (all of whom are nihilists) are probably singing Bill Joel at a piano bar over scotch in Georgetown. Boehner’s support was deep enough in the caucus to deliver that many votes while releasing dozens of others to vote against, and he is probably safe as speaker. Cantor, I think, is done.

Boehner and Paul Ryan voted for the bill; “Dead Eyes” Cantor and Marco Rubio voted against it (let taxes go up on the real ‘Mericans!). The GOP presidential primary in 2016 will be interesting since Republican base-rubes are such complete masochists.

Boehner’s turn: the importance of timing and semantics

Boehner couldn’t get his caucus to agree on letting tax cuts expire for incomes over $1,000,000 — why would they now agree to expire the tax cuts on incomes at $400-$450,000 and over?

Steve Benen explains the importance of timing / semantics:

 It may seem like semantics, but after midnight, the rates go up automatically. Given this, if the Senate approves a package that applies lower rates to income up to $450,000 and higher rates on all income above $450,000, that vote is qualitatively different tomorrow than today — before midnight, it’s a vote to allow rates to go up on the very wealthy; after midnight, the rates for the wealthy would literally stay the same because they will have already gone up.

Republicans could vote, or at least consider voting, for a Senate package without anyone suggesting they voted for higher taxes. The Senate package, at least in its current, incomplete form, would be solely a tax break on income up to $450,000 — while maintaining a new status quo on rates applying to all additional income.

Would these nuances really matter than much to House Republicans? You bet they would.

On another note, unfortunately, even after eight years of war and economic crisis and bailouts, and one of the largest expansions of the federal government and the debt, George W. Bush continues to ‘win’ with the tax cuts still being dubbed “the Bush tax cuts.”

Reindeer games on New Year’s Eve

McConnell called Biden into the negotiations yesterday, even though Biden has offered nothing different from Reid:

McConnell and Biden, who served in the Senate together for 23 years, are closing in on an agreement that would hike tax rates for families who earn more than $450,000, and individuals who make more than $400,000, according to sources familiar with talks.

The vice president and the Senate minority leader only began talking Sunday, after negotiations between Senate Majority Leader Harry Reid (D-Nev.) and McConnell sputtered.

Sources close to the talks said a deal is now more likely to come together but cautioned that obstacles remain, including how Speaker John Boehner and House Republican leaders react to any tentative agreement.

“The leader and the VP continued their discussion late into the evening and will continue to work toward a solution. More info as it becomes available,” a McConnell spokesman said.

Yesterday McConnell dropped one of his party’s demands — chained CPI:

Earlier in the day, negotiations between Reid and McConnell suffered a “major setback” after Republicans demanded the inclusion of a new method for calculating entitlement benefits as part of the cliff package, according to Democrats.

The provision, known as “chained CPI,” is opposed by many liberals because it would result in lower payments for Social Security beneficiaries.

[...] On the Senate floor early on Sunday, Reid ruled out any cuts to Social Security as part of any cliff agreement.

And what if we do go over the cliff?

Democrats later left a closed-door Democratic Caucus meeting on Sunday afternoon united, with many prepared to go over the cliff if no amenable deal is reached.

“The world won’t end — remember Y2K?” said Sen. Tom Harkin (D-Iowa). “If this thing goes on, all of a sudden, the people find out there’s a lot of revenue coming into the government — and we have a sequester that we can deal with in January and February, and I think we will. I think then perhaps — then Republicans won’t have to vote to raise taxes, we’ll all be voting to cut taxes.”

You know what? Finally we have a united Democratic Caucus willing to stand up to the Republicans. That’s a pretty good way to start a new year.

35 hours (or so) to go: the Senate / Democratic Plan A and Plan B on tax rate increases

“…by all accounts, the Reid/McConnell agreement, if it exists, will not be a sweeping deal along the lines of a grand bargain. It would instead focus primarily on tax rates — the $400,000 income threshold increasingly appears to be a precondition for the GOP — extended unemployment insurance, the Medicare “doc fix,” the alternative minimum tax, the estate tax, and a series of tax incentives for businesses and families, many of which were included in the Recovery Act.

The Senate plan would not, if all goes according to plan, deal with the sequester, the existing payroll tax break, or the debt ceiling. Why not? Because Republicans still hope to continue work on a larger (grander) debt-reduction deal in the new year.

In other words, even if there’s unexpected progress today and tomorrow on Capitol Hill, some deadlines will go unmet and the stage will be set for yet another self-inflicted crisis in a couple of months.

While we wait to see if/when a Senate plan comes together, there is a contingency plan — apparently Democrats have a Plan B of their own — in the event McConnell and Reid can’t reach an agreement (or the Senate rejects their deal). On Monday, if all else fails, Reid will bring a simple package to the floor: lower rates on income up to $250,000 and extended jobless aid. That’s it. If Senate Republicans kill it, the deadlines will pass and Democrats will try again in 2013. If the Senate passes it and the House balks, we’ll see the same outcome.

Obama and Reid seem to like their chances: GOP officials don’t want their final act of this Congress to be a vote against middle-class tax breaks, and complete failure would almost certainly give Democrats leverage in the new year anyway.”

Steve Benen: Where things stand

The adults make a last-ditch effort on the fiscal cliff

Reuters: Obama said he was “modestly optimistic” that an agreement could be found that would prevent taxes going up for almost all working Americans.

If things cannot be worked out in the Senate, Obama said he wanted both chambers in Congress to vote on a plan of his that would increase taxes only for households earning more than $250,000 a year.

The plan would also extend unemployment insurance for about 2 million Americans and set up a framework for a larger deficit reduction deal next year.

“The hour for immediate action is here. It is now. We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller. And that would be the wrong thing to do,” Obama told reporters.

He was speaking after an hour-long meeting in the White House with the two Senate leaders plus their counterparts in the House, Republican Speaker John Boehner and Democratic Minority Leader Nancy Pelosi.

A total of $600 billion in tax hikes and cuts to government spending will start kicking in on Tuesday if politicians cannot reach a deal, which could push the U.S. economy into a recession.

###

The President’s Weekly Address: Congress must protect the Middle Class from income tax hike –


In part:

“For the past couple months, I’ve been working with people in both parties — with the help of business leaders and ordinary Americans — to come together around a plan to grow the economy and shrink our deficits.

It’s a balanced plan — one that would protect the middle class, cut spending in a responsible way, and ask the wealthiest Americans to pay a little more. And I’ll keep working with anybody who’s serious about getting a comprehensive plan like this done — because it’s the right thing to do for our economic growth.

In just a couple days, the law says that every American’s tax rates are going up. Every American’s paycheck will get a lot smaller. And that would be the wrong thing to do for our economy. It would hurt middle-class families, and it would hurt the businesses that depend on your spending.

Congress can prevent it from happening if they act now.

Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time.

But if an agreement isn’t reached on time, then I’ll urge the Senate to hold an up-or-down vote on a basic package that protects the middle class from an income tax hike, extends vital unemployment insurance for Americans looking for a job, and lays the groundwork for future progress on more economic growth and deficit reduction.” …

Did Boehner give the President a choice between Plan B or the fiscal cliff?

Brian Beutler reports on John Boehner’s comments to reporters yesterday at the Capitol:

“Tomorrow the House will pass legislation to make permanent tax relief for nearly every American — 99.81 percent of the American people,” he said, referring to his own so-called Plan B. “Then the President will have a decision to make. He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history.”

That sounds like he’s giving Obama a choice between Plan B or the fiscal cliff. No more negotiations over a broader deficit reduction plan.

Boehner did not take any questions from the press, but a spokesman for the speaker affirmed that the lines of communication with the White House remain open and that Boehner was not signaling the end of negotiations.

Whether or not he’s foreclosing on further negotiations before the end of the year, Boehner did suggest that he’d entertain further negotiations over a “balanced” plan in the future.

Steve Benen thinks Boehner “is now giving ultimatums and preemptively trying to avoid blame for the increasingly likely failure.”

As a rule, officials only start preemptively trying to avoid responsibility for failure when they expect to get blamed. For that matter, it’s also a reliable rule that those saying my-way-or-no-way are not serious about working out an acceptable compromise.

One question to keep an eye on, which we do not yet know the answer to: after Obama and Boehner got awfully close to a deal over the weekend, did Republicans move away from the bipartisan agreement because Boehner deemed it insufficient or because his caucus told him to deem it insufficient? It’s been an ongoing problem in the GOP conference for two years — their leader is more often taking orders than giving them.

Regardless, if the talks collapse, as now appears likely, it’ll be the second time in two years in which Obama offered a congressional Republicans a very generous offer — to the consternation of the president’s own allies, it’s basically a center-right package — on an issue they occasionally pretend to care about, only to have GOP officials refuse to compromise.

President Obama urged the GOP to quit playing reindeer games with the welfare of the country: “I don’t know how much of that just has to do with [the idea that] it is very hard for them to say yes to me,” Obama said at a press conference to announce a new task force to prevent gun violence. “But, you know, at some point, you know, they’ve got to take me out of it and think about their voters and think about what’s best for the country.”

The administration argues that the “Plan B” would mean that scores of wealthy earners would keep getting substantial tax breaks while 2 million Americans would lose unemployment insurance. “That violates the core principles that were debated during the course of this election and that the American people determined was the wrong way to go,” Obama said. That premise, however, has been vigorously disputed by Republican leaders, who say that the “Plan B” legislation would immediately prevent tax hikes on the middle class, which the White House has always called its top priority in the negotiations. [...]

While Obama said he understands lead negotiator Boehner faces “challenges” within his caucus from rank-and-file members fearful of a primary challenge from the right, he accused GOP heavies of keeping on their “partisan war paint” long after Election Day.

“I think an environment needs to be created within not just the House Republican caucus but also among Senate Republicans that say the campaign is over, and let’s see if we can do what’s right for the country. At least for the next month. And then, you know, we can reengage in all the other battles that they’ll want to fight.”

Jonathan Chait:

“Everybody knows what happens in January. Both sides ought to be able to anticipate it and make the deal they could make then now. Business types have therefore assumed a December deal would happen. If this was a business deal between two rational people, that’s what would happen.”

But we are not dealing with rational people here. We are dealing with House Republicans. As Republican Tom Cole gently put it, by way of describing his colleagues’ implacable hatred of taxes, ‘It’s who they are. It’s the air they breathe. It’s what the Republican electorate produces.‘”

“If Boehner strikes a deal before January, Republicans will suspect he gave away revenue he could have fought for. But if he refuses, the House Republicans will see for themselves what happens. The revenue will go away on its own, over Boehner’s objections. All Obama has to do is continue to make clear he will not under any circumstances extend any tax cuts on income over $250,000 a year. Then he has nearly all the revenue he needs, and he can offer Republicans a deal they would never walk away from. They might try to get that deal in December, but January remains the best bet.”

The Republican side of the fiscal cliff

Image

We are living in strange times

“This is not a negotiation in the normal sense, in which each side makes proposals and they dicker over the details; instead, Republicans are demanding that Obama read their minds and produce a proposal they’ll like. And Obama won’t do that, for good reason: he knows that they’ll just pronounce themselves unsatisfied with whatever he comes up with, and are indeed very likely to campaign in 2014 attacking him for whatever cuts take place. But then, should we be surprised? Remember that all the Republican budget “plans” of recent years—very much including the Ryan plan—have been built largely out of magic asterisks…We are at a strange and dangerous place in American political life.”

— Paul Krugman 

Nancy Pelosi wishes John Boehner would man up

John Boehner is having a very hard time with the idea of not automatically putting his political party and the super rich first:

MSNBC: “House Minority Leader Nancy Pelosi doesn’t have much sympathy for her successor’s predicament. “Figure it out,” she scolded Speaker John Boehner about dealing with the fiscal cliff.

“Pelosi cited her own experience dealing with President George W. Bush’s request to fund the unpopular war in Iraq. A fierce opponent of the war, Pelosi still wanted to ensure that the troops weren’t left high and dry. Her strategy: hold multiple votes. Democrats could go on record as opposing the war, but could still vote to fund it.

“Do you know what it was like for me to bring a bill to the floor to fund the war in Iraq?” Pelosi told reporters on Wednesday afternoon. “It’s tough, but you have to do it if you don’t want to put your members on the spot. Figure it out. We did.” [...]

“Working on the same principle, Pelosi urged Boehner to bring up a bill extending middle-class tax rates under a suspension of the rules, which would require a two-thirds majority to pass—something she thinks is possible. Tax rates for the wealthiest Americans would then automatically go up at year’s end. “It’s painful, but it’s the job he signed up for,” said Pelosi.

“Democrats say they won’t accept a solution unless it includes tax rate increases for America’s wealthiest. Closing loopholes and capping tax deductions for the wealthy—as some Republicans have suggested—is not enough, say the Dems.”

Related:

Many earning over $250,000 will see NO tax increase under Pres. Obama’s tax plan

Think Progress illustrates how President Obama’s tax plan would actually effect taxpayers earning $250,000 and above:

But as a new report by The New York Times detailed yesterday, even a significant minority of those making over the $250,000 threshold would see no increase under Obama’s tax plan, and for the rest the added burden would be minor in comparison to the size of their incomes:

A close look at the president’s plan shows that a large majority of families making up to $300,000 — as well as hundreds of thousands of families with even larger incomes — would not pay taxes at a higher marginal rate. [...]

While the president has said that he wants to raise tax rates for the top 2 percent, only about 1 percent of taxpayers will face higher marginal rates, according to an analysis by the Tax Policy Center, a widely respected research group.

[...] That $1.6 trillion in revenue can be raised by applying a relatively small tax burden on a very narrowly defined set of Americans is an indication of how extreme and concentrated income inequality has become in America. It also reveals why multiple studies, the latest from the International Monetary Fund, have concluded that Obama’s preferred set of tax increases will have a negligible effect on economic growth — the income being hit is largely separate from the low and middle-income Americans who provide the bulk of the demand driving the economy.

An extra $1.6 TRILLION IN REVENUE! When will the House Republicans stop defending the greed of the elites? Common sense tells us that people who take tax deductions for dancing horses, who would rather bankrupt companies and layoff workers rather than reduce executive salaries and bonuses and share profits, and who have — for decades — redirected billions (trillions?) of dollars from the national treasury and the working and middle-class to their own personal (offshore) bank accounts can absolutely, positively, undeniably afford to pay a few extra percentage points in federal taxes.

What we learned from Boehner this morning: the GOP will take everyone hostage for The Wealthy

After Boehner’s puzzling news conference this morning (why?), here’s a reminder of what he and his Teapublican cohorts continue to fight for, via Think Progress:

As Congress brings the United States closer to the brink of the so-called “fiscal cliff,” the package of automatic spending cuts and tax increases that will take effect at the end of the year, yet another report has found that the spending cuts pose a major threat to economic growth, while small revenue increases won’t.

The study, from the International Monetary Fund, found that the negative impact of spending cuts during economic downturns in the United States are “statistically significant and sizeable,” while the impact of new revenues is “very small and not significantly significant.”

President Obama proposed a plan last week that would raise $1.6 trillion in new revenues through the expiration of the high-income Bush tax cuts and other tax increases on wealthy earners. Two other nonpartisan reports, one each from the Congressional Budget Office and Congressional Research Service, have found that the economic impact of tax increases on the wealthy would be negligible. Obama’s plan also includes billions of dollars of investment into infrastructure and jobs programs to help spark growth and offset the negative effects of spending cuts.

Despite these findings, Republicans have clung to the idea that tax increases on wealthy earners will derail the economic recovery while spending cuts and deficit reduction will speed it up.

Here’s the reality — plain and simple: Republicans don’t care about economic recovery and deficit reduction. They’re fighting to keep taxes low for the wealthiest 2%.

Joe Biden goes to Costco

Nothing else that happened this week mattered as much as Joe Biden’s visit to Costco.

Huffington Post[Vice President Joe Biden], who flashed a store membership card as he entered the city’s first Costco on its opening day, said consumer confidence is growing – as demonstrated by the huge crowd at the gleaming new store in Northeast Washington.

“The last thing we need to do is dash that” confidence by imposing a tax increase of about $2,200 for a typical middle-class family, Biden said. Bush-era tax cuts are scheduled to expire Jan. 1, the same time as across-the-board spending cuts are scheduled to take effect. The combination of tax hikes and spending cuts could spike unemployment and bring on a new recession.

Biden and President Barack Obama have pressed Congress to extend middle-class tax cuts while raising taxes on the wealthiest Americans, while congressional Republicans have pushed to extend cuts for all taxpayers.

Biden said Congress should act on the middle-class tax cuts before Christmas to spur consumer confidence and then fight later over tax cuts for families earning more than $250,000 a year.

“We have a lot we have to settle, but there’s one thing we should all agree on and that’s the middle-class tax cut should be made permanent. I think it’s important Congress acts now, I mean right now,” Biden said at an impromptu news conference at the store, where he was surrounded by shoppers and employees eager to shake hands, take photos and even hug the vice president. [...]

Biden said he was optimistic about reaching a deal to avoid the fiscal crisis and said, “all these folks in this store, man, it’s going to make a difference. Take $2,200 out of their pockets next year, you have a big problem.”


afternoonsnoozebutton: Look at this picture of Joe Biden examining the giant pies at Costco

  
  
  

Joe Biden enjoys himself at opening of D.C. Costco


yahoopolitics: Joe Biden’s visit to Cosco, gif’ed. You’re welcome.


“Guys in all honesty I didn’t have my own card, Jill wouldn’t let me have one. So I went to get my wife’s card, and she said: ‘No, no, no you get your own.’” – Joe Biden at Costco in DC today.
[Source: CBS News]

Joe Biden single-handedly jumps-starts economy at Costco!

Meanwhile, before his lunch with the President:

downlo: Biden being charming at Costco vs. Mittens looking awkward as hell at McDonald’s. He also reportedly was there ahead of his lunch with Obama today. Does he think the White House isn’t going to serve a good lunch? Weird. (12)