HOW are the issues and concerns of the 99% addressed in this agreement? The payroll tax break isn't part of the deal, unemployment benefits haven't been extended, the keystone xl pipeline may still be one of the riders in legislation and there is more interference in the lives of the citizens of D.C. along with funding cuts for the EPA and education. The 1% come out ahead, as usual.....no surtax on millionaires, no cuts to corporate welfare, no closing major corporate tax loopholes, no cuts impacting the profit margins of those merchants of death controlling the Pentagon. Congress is waging class warfare on 99% of the country and Pres Obama has become the Commander-In-Chief of this force of 535 whose motto has become to serve and protect the obscenely rich, the greedy, the corporate welfare queens and the military-industrial complex.
Congressional negotiators signed off Thursday evening on a $1 trillion spending agreement for federal agencies, just 28 hours before a deadline that would have led to a government shutdown.
After dropping policy prescriptions restricting travel to Cuba and a minor provision related to oversight of financial trades, members of the House and Senate appropriations committees gave final approval to the plan after a four-day standoff that was linked to a separate issue: President Obama’s demands to extend the payroll tax holiday for 160 million workers.
That negotiation, lawmakers and aides said, also could be headed toward an agreement, with lawmakers thinking about extending the tax break for two months to buy more time to determine how to fund it without increasing the federal deficit.
There was a broad shift in tone Thursday on Capitol Hill as leaders on both sides stopped saying the other would be to blame for a potential shutdown and began sending signs of progress.
Talks on the payroll tax began after Democrats dropped their demand that the cut be paid for with a new surtax on those who earn more than $1 million a year.
“Yeah, that’s gone,” Senate Finance Committee Chairman Max Baucus (D-Mont.) confirmed Thursday evening.
But it was not clear whether Republicans would drop a series of provisions added in the House intended to lure votes from conservatives who believe the tax holiday is bad economic policy.
The House “riders” included an effort to speed approval of the construction of the controversial Keystone XL oil pipeline, reforms to unemployment insurance, higher Medicare premiums for upper-income seniors and a year-long extension of a two-year pay freeze for federal workers.
The package also would extend unemployment benefits for the long-term jobless and avert a scheduled cut in Medicare reimbursement rates for doctors.
Baucus, who is negotiating the tax and unemployment package for Democrats, said one consideration was to link the eligibility period of unemployment benefits to the level of joblessness in each state. That would mean that laid-off workers in Nevada — which has a 13.4 percent unemployment rate, the nation’s highest — would be eligible to receive benefits for a longer period than those in North Dakota, the state with the lowest unemployment rate.
A senior Democratic aide said talks over how to pay for the extended tax cut for the full year were ongoing, but an agreement had been secured to at least continue the tax break for two months, at a cost of $40 billion. Among the ideas being considered to pay for the cut, the aide said, were raising fees Fannie Mae and Freddie Mac collect from lenders, selling wireless spectrum controlled by the government and ending a tax break on the sale of corporate jets.
“There’s momentum building toward a comprehensive agreement, but still there are a lot of pieces to put together,” Baucus said.
To ensure the government remains funded, the White House and Democratic leaders signaled earlier Thursday that they would release their members to move ahead with the $1 trillion spending bill that the Appropriations Committee negotiated, paving the way for final votes on the measure in the House and the Senate.
A vote could occur as early as Friday, with Congress approving a temporary stopgap measure to provide time to complete their work when the legislation that is keeping the lights on ends at midnight.
Democratic leaders had blocked the bill from moving ahead after the White House said it wanted Congress to agree to extend the tax cut first and expressed lingering concerns about some of its provisions.
They included a provision barring the District from spending local tax money on abortion, another blocking the implementation of new standards for energy-efficient light bulbs and a third reversing an Obama administration decision to loosen rules for Americans who want to visit family members in Cuba.
The goal of linking the payroll tax issue to the spending bill was to ensure Republicans in the House could not pass the funding measure and then leave for the holidays — forcing Senate Democrats to accept a Republican proposal to extend the tax cut or let it expire.
At the White House on Thursday, Obama reiterated that the move would be unacceptable to him.
“Congress cannot and should not go on vacation before they have made sure that working families aren’t seeing their taxes go up by $1,000 and those who are out there looking for work don’t see their unemployment insurance expire,” he said.
The hardball tactic of linking tax holiday negotiations — as well as jobless benefits — to the completion of the must-pass spending bill aggravated some Democrats who had worked with Republicans for months to hammer out the appropriations deal.
Rep. James P. Moran (D-Va.), who sits on the key committee, said some Democrats had told the White House that “they should not be using federal employees as pawns in a larger issue.”
“I don’t blame them for trying to use every means available to them,” he said. “But I just don’t think that it’s right.”
The funding bill sets government spending for the year at $1.043 trillion, a level agreed to in the August deal that also raised the nation’s legal borrowing limit. The figure represents a 1.5 percent drop in spending from the fiscal year that ended Sept. 30.
That doesn’t count $115 billion for overseas military operations, a $43 billion dip since this past year as the war in Iraq winds down. It also doesn’t count $8.1 billion in emergency disaster-relief spending.
The measure outlines spending for three-fourths of the government — all but the departments of Agriculture, Commerce, Housing and Urban Development, Justice, State and Transportation, as well as NASA and some smaller agencies — which were settled in a November deal.
But it addresses funding for a wide swath of government programs, including Pell grants, border security and federal funding for the District of Columbia, and is designed to settle spending issues until nearly the next election, sparing the government the possibility of another shutdown. As Congress works to lower the federal deficit and reduce government spending, most domestic programs will see cuts.
The measure omits funding for the Internal Revenue Service to prepare for the 2014 implementation of the federal health-care law. But it increases funding for border agents and Immigration and Customs Enforcement.
It includes $8.4 billion for the Environmental Protection Agency — a $233 million drop from last year. And provides $550 million for Obama’s signature Race to the Top education program, which incentivizes school reform, a cut of more than 20 percent.
But the Indian Health Service would see funding rise to $237 million. And funding would increase for the Centers for Disease Control and Prevention and the National Institutes of Health.
BUCKNACKT'S SORDID TAWDRY BLOG We should not be a journey to the grave with the intention of arriving safely in an attractive & well preserved body, but rather to skid in sideways, chocolate, bier or wein in hand, body thoroughly used up, totally worn out and screaming "WHOO-HOO, WHAT A RIDE!!!!!!"
Showing posts with label capitulation. Show all posts
Showing posts with label capitulation. Show all posts
15 December 2011
17 December 2010
BOHICA!!!! Congress passes extension of Bush-era tax cuts 16DEZ10
BETRAYAL! CAPITULATION! HYPOCRISY! THANKS FOR NOTHING PRES. OBAMA AND DEMOCRATS!
Congress approved the most significant tax bill in nearly a decade late Thursday, overcoming liberal resistance to continue for two more years tax breaks enacted under President George W. Bush and to provide a fresh boost of federal support to the tepid economic recovery.
The package, brokered by President Obama and Republican leaders in the wake of the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy. But their last-minute campaign to scale back the bill's benefits for taxpayers at the highest income levels failed, and the House passed the measure.
"This bill, the president of the United States believes and I believe, will have a positive effect on the economy," said House Majority Leader Steny Hoyer (D-Md.). "I will vote for this bill because I don't want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up."
The $858 billion package now goes to the White House. With his signature, expected as soon as Friday, Obama will prevent taxes from rising on New Year's Day for virtually every American household. The measure also will guarantee unemployed workers in hard-hit states up to 99 weeks of jobless benefits through the end of next year. And it will create major new incentives for business and consumer spending in 2011, including a two-percentage-point reduction in the Social Security payroll tax that would let workers keep as much as $2,136.
The package breezed through the Senate earlier this week on a vote of 81 to 19, giving Obama his strongest bipartisan victory on a major initiative since he took office. Opposition in the House crumpled in the face of that overwhelming showing, though House liberals insisted on offering an alternative that would levy a higher tax on estates than the Obama-GOP compromise will impose. That effort failed shortly before midnight, 194 to 233.
Liberals opposed the deal in part because they believe the temporary extension of the Bush breaks would eventually become permanent, setting lower tax rates far into the future. That would increase pressure on lawmakers to cut spending as a way of reducing record federal budget deficits, placing a host of cherished social programs in jeopardy.
But for Obama, the two-year window represents an opportunity to tackle the ambitious task of overhauling the federal tax code. By sunsetting current policies immediately after the 2012 presidential election, lawmakers in both parties said the measure sets a natural timetable for developing a tax-reform plan - an essential step toward reining in the rising national debt.
Obama placed numerous calls to House Democrats this week to urge their support for the deal, and got an earful in return. Rep. Elijah Cummings (D-Md.) said he told the president that one of his concerns was that "these tax cuts would not end in 2012, because in an election year, I think it's very, very difficult" to raise taxes.
Obama replied that the fate of the Bush tax cuts "would be part of his platform when he ran," Cummings said. "So it should be very interesting."
Republicans, too, have been pressing for a temporary extension of the Bush tax cuts as a bridge to tax reform. Like the last major tax overhaul in 1986, a new rewrite is likely to take years to draft and push through Congress. But White House officials have been encouraged by the level of engagement from Republicans, who will hold 47 seats in the Senate and take control of the House in January.
Key lawmakers in both parties have embraced a deficit-reduction plan produced by Obama's fiscal commission, which includes a tax overhaul that would lower rates across the board but raise additional revenue by closing dozens of long-standing loopholes, such as the mortgage-interest deduction claimed by many homeowners. Meanwhile, the relative ease with which Obama and the GOP were able to strike a deal over the Bush cuts has raised hopes on both sides for productive talks in the future.
"This is consensus on a very intractable issue: What do we do about expiring tax policy?" said Rep. Dave Camp (R-Mich.), the incoming chairman of the tax-writing House Ways and Means Committee, who was party to the tax negotiations. Camp, who has made comprehensive tax reform a top priority, said the talks were significant not only because of the policy that emerged "but also because of the process of coming together and reaching an agreement."
"I am very encouraged by what the president has been saying publicly. They do want to begin," Camp said. "And that is a big thing."
The bipartisan tax talks had another benefit: Unlike the pork-laden, $1.2 trillion annual spending bill that was jettisoned in the Senate late Thursday, the tax bill is virtually free of unrelated add-ons. Negotiators, in fact, excluded more than 70 temporary programs from the bill, including federal subsidies for state and local borrowing known as Build America Bonds, a sales tax deduction for new cars and trucks, a property tax deduction for people who don't itemize on their tax returns and an exemption from taxes for the first $2,400 of unemployment benefits. All those provisions will be allowed to expire.
Although Democrats were unhappy with the deal, Obama negotiated with Republicans only after Democratic lawmakers refused for months to address the issue of the expiring Bush tax cuts, raising alarm at the White House. Economists said a partisan standoff could wreak havoc on the economy by increasing withholding in virtually every worker's paycheck, raising taxes by about $3,000 next year on a typical family, according to White House estimates.
The concern was so great that Obama ultimately decided to break his long-standing vow to eliminate the Bush tax cuts for the wealthiest 2 percent of taxpayers. But with unemployment stuck near 10 percent, he was able to negotiate a big new dose of support for the economy, which Republicans had vowed to oppose.
In addition to the payroll tax holiday, Obama won a $57 billion extension of emergency unemployment benefits that will keep the program, which expired last month, alive through the end of next year. Republicans also agreed to support the largest temporary investment incentive in U.S. history, which permits businesses to deduct 100 percent of equipment purchases in the 2011 tax year.
For Democratic lawmakers, the most objectionable provision was a deal to reinstate the estate tax at 35 percent and to exempt estates worth as much as $5 million. Republicans have long argued that what some call the "death tax" is a threat to family farms and small businesses, though the nonpartisan Tax Policy Center estimates that only 100 family farms and small businesses paid the tax in 2009, when a more restrictive $3.5 million exemption was in effect.
The votes Thursday night were likely the final major legislative actions by the House Democratic majority, a low note following the party's landslide losses last month. Rep. Louise M. Slaughter (D-N.Y.) called the estate tax provision "an atrocious giveaway in a nation riddled with debt and unemployment." And Rep. Gene Taylor (D-Miss.), one of the defeated Democrats, delivered an impassioned speech before the vote, ending with the question "How much debt is enough?"
Congress approved the most significant tax bill in nearly a decade late Thursday, overcoming liberal resistance to continue for two more years tax breaks enacted under President George W. Bush and to provide a fresh boost of federal support to the tepid economic recovery.
The package, brokered by President Obama and Republican leaders in the wake of the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy. But their last-minute campaign to scale back the bill's benefits for taxpayers at the highest income levels failed, and the House passed the measure.
"This bill, the president of the United States believes and I believe, will have a positive effect on the economy," said House Majority Leader Steny Hoyer (D-Md.). "I will vote for this bill because I don't want to see middle-income working people in America get a tax increase, because I think that will be a depressant on an economy that needs to be lifted up."
The $858 billion package now goes to the White House. With his signature, expected as soon as Friday, Obama will prevent taxes from rising on New Year's Day for virtually every American household. The measure also will guarantee unemployed workers in hard-hit states up to 99 weeks of jobless benefits through the end of next year. And it will create major new incentives for business and consumer spending in 2011, including a two-percentage-point reduction in the Social Security payroll tax that would let workers keep as much as $2,136.
The package breezed through the Senate earlier this week on a vote of 81 to 19, giving Obama his strongest bipartisan victory on a major initiative since he took office. Opposition in the House crumpled in the face of that overwhelming showing, though House liberals insisted on offering an alternative that would levy a higher tax on estates than the Obama-GOP compromise will impose. That effort failed shortly before midnight, 194 to 233.
Liberals opposed the deal in part because they believe the temporary extension of the Bush breaks would eventually become permanent, setting lower tax rates far into the future. That would increase pressure on lawmakers to cut spending as a way of reducing record federal budget deficits, placing a host of cherished social programs in jeopardy.
But for Obama, the two-year window represents an opportunity to tackle the ambitious task of overhauling the federal tax code. By sunsetting current policies immediately after the 2012 presidential election, lawmakers in both parties said the measure sets a natural timetable for developing a tax-reform plan - an essential step toward reining in the rising national debt.
Obama placed numerous calls to House Democrats this week to urge their support for the deal, and got an earful in return. Rep. Elijah Cummings (D-Md.) said he told the president that one of his concerns was that "these tax cuts would not end in 2012, because in an election year, I think it's very, very difficult" to raise taxes.
Obama replied that the fate of the Bush tax cuts "would be part of his platform when he ran," Cummings said. "So it should be very interesting."
Republicans, too, have been pressing for a temporary extension of the Bush tax cuts as a bridge to tax reform. Like the last major tax overhaul in 1986, a new rewrite is likely to take years to draft and push through Congress. But White House officials have been encouraged by the level of engagement from Republicans, who will hold 47 seats in the Senate and take control of the House in January.
Key lawmakers in both parties have embraced a deficit-reduction plan produced by Obama's fiscal commission, which includes a tax overhaul that would lower rates across the board but raise additional revenue by closing dozens of long-standing loopholes, such as the mortgage-interest deduction claimed by many homeowners. Meanwhile, the relative ease with which Obama and the GOP were able to strike a deal over the Bush cuts has raised hopes on both sides for productive talks in the future.
"This is consensus on a very intractable issue: What do we do about expiring tax policy?" said Rep. Dave Camp (R-Mich.), the incoming chairman of the tax-writing House Ways and Means Committee, who was party to the tax negotiations. Camp, who has made comprehensive tax reform a top priority, said the talks were significant not only because of the policy that emerged "but also because of the process of coming together and reaching an agreement."
"I am very encouraged by what the president has been saying publicly. They do want to begin," Camp said. "And that is a big thing."
The bipartisan tax talks had another benefit: Unlike the pork-laden, $1.2 trillion annual spending bill that was jettisoned in the Senate late Thursday, the tax bill is virtually free of unrelated add-ons. Negotiators, in fact, excluded more than 70 temporary programs from the bill, including federal subsidies for state and local borrowing known as Build America Bonds, a sales tax deduction for new cars and trucks, a property tax deduction for people who don't itemize on their tax returns and an exemption from taxes for the first $2,400 of unemployment benefits. All those provisions will be allowed to expire.
Although Democrats were unhappy with the deal, Obama negotiated with Republicans only after Democratic lawmakers refused for months to address the issue of the expiring Bush tax cuts, raising alarm at the White House. Economists said a partisan standoff could wreak havoc on the economy by increasing withholding in virtually every worker's paycheck, raising taxes by about $3,000 next year on a typical family, according to White House estimates.
The concern was so great that Obama ultimately decided to break his long-standing vow to eliminate the Bush tax cuts for the wealthiest 2 percent of taxpayers. But with unemployment stuck near 10 percent, he was able to negotiate a big new dose of support for the economy, which Republicans had vowed to oppose.
In addition to the payroll tax holiday, Obama won a $57 billion extension of emergency unemployment benefits that will keep the program, which expired last month, alive through the end of next year. Republicans also agreed to support the largest temporary investment incentive in U.S. history, which permits businesses to deduct 100 percent of equipment purchases in the 2011 tax year.
For Democratic lawmakers, the most objectionable provision was a deal to reinstate the estate tax at 35 percent and to exempt estates worth as much as $5 million. Republicans have long argued that what some call the "death tax" is a threat to family farms and small businesses, though the nonpartisan Tax Policy Center estimates that only 100 family farms and small businesses paid the tax in 2009, when a more restrictive $3.5 million exemption was in effect.
The votes Thursday night were likely the final major legislative actions by the House Democratic majority, a low note following the party's landslide losses last month. Rep. Louise M. Slaughter (D-N.Y.) called the estate tax provision "an atrocious giveaway in a nation riddled with debt and unemployment." And Rep. Gene Taylor (D-Miss.), one of the defeated Democrats, delivered an impassioned speech before the vote, ending with the question "How much debt is enough?"
Congress Sends Tax Legislation To White House
A massive bipartisan tax package preventing a big New Year's Day tax hike for millions of Americans is on its way to President Barack Obama for his signature.
The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138).
In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.
"There probably is nobody on this floor who likes this bill," said House Majority Leader Steny Hoyer (D-MD). "The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."
Rep. Dave Camp (R-MI) said that with unemployment hovering just under 10 percent and the deadline for avoiding a big tax hike fast approaching, lawmakers had little choice but to support the bill.
"This is just no time to be playing games with our economy," said Camp, who will become chairman of the tax-writing House Ways and Means Committee in January. "The failure to block these tax increases would be a direct hit to families and small businesses."
Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 — a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.
The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Workers' Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.
"This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force," said Treasury Secretary Timothy Geithner.
Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn't make all the tax cuts permanent.
Rep. Ginny Brown-Waite (R-FL) called it "a bipartisan moment of clarity."
The bill's cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
"I know that we are going to borrow every nickel in this bill," Hoyer lamented.
At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple's estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.
House Speaker Nancy Pelosi (D-CA) called the estate tax the "most egregious provision" in the bill and held a vote that would have imposed the higher estate tax. It failed, 194-233.
Rep. Elijah Cummings (D-MD) said he thought the White House could have gotten a better deal.
"When I talk to the Republicans they are giddy about this bill," he said.
The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138).
In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.
"There probably is nobody on this floor who likes this bill," said House Majority Leader Steny Hoyer (D-MD). "The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."
Rep. Dave Camp (R-MI) said that with unemployment hovering just under 10 percent and the deadline for avoiding a big tax hike fast approaching, lawmakers had little choice but to support the bill.
"This is just no time to be playing games with our economy," said Camp, who will become chairman of the tax-writing House Ways and Means Committee in January. "The failure to block these tax increases would be a direct hit to families and small businesses."
Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 — a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.
The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Workers' Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.
"This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force," said Treasury Secretary Timothy Geithner.
Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn't make all the tax cuts permanent.
Rep. Ginny Brown-Waite (R-FL) called it "a bipartisan moment of clarity."
The bill's cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
"I know that we are going to borrow every nickel in this bill," Hoyer lamented.
At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple's estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.
House Speaker Nancy Pelosi (D-CA) called the estate tax the "most egregious provision" in the bill and held a vote that would have imposed the higher estate tax. It failed, 194-233.
Rep. Elijah Cummings (D-MD) said he thought the White House could have gotten a better deal.
"When I talk to the Republicans they are giddy about this bill," he said.
16 December 2010
Social Security: The Coming Cave-in 12DEZ10
If you think the Democratic base is mad at Obama now for making a craven deal with Republicans that continues tax breaks for the richest Americans and adds new ones for their heirs through a big cut in the estate tax, just wait a few weeks until Obama caves on Social Security.
How will this occur? The deficit commission appointed by the President has called for an increase in the retirement age, as well as other cuts in benefits over time. And the deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the cross-hairs.
The deficit commission has tried to camouflage these cuts by emphasizing that Social Security benefits for the very poor would not be reduced, and might even be increased. But in the commission's proposal, the cuts would affect middle-class retirees. Larry Summers, who is stepping down as Obama's economic chief, has refused to rule out cuts.
Social Security has also been softened up by the element of the tax deal that temporarily cuts payroll taxes. Supposedly, the trust funds will be made whole by a transfer from general government funds. But this increases the deficit.
So Obama has created a kind of pincer attack on Social Security. One arm is the deficit commission, which has created the blueprint. The other is the tax-cut deal, which increases the deficit, adding to the artificial hysteria that Social Security is going broke. Meanwhile, the right is playing a very cute game, congratulating Obama for the deal. According to columnist Charles Krauthammer, writing in Friday's Washington Post, "Barack Obama won the great tax-cut showdown of 2010." Really? How did he do that? It sure looked like he got rolled. "The President negotiated the biggest stimulus in American history, larger than the 814 $billion 2009 stimulus package."
The New York Times' resident right-wing pundit, David Brooks, also writing Friday, was peddling the same line:
"The fact is, Obama and the Democrats have had an excellent week," Brooks wrote. "The White House negotiators did an outstanding job for their side."
When the right congratulates Obama for winning, you know he is losing. For starters, the proposed compromise isn't much of an economic stimulus. If the deal passes Congress, taxpayers will be paying the same income tax rates in 2011 and 2012 as in 2010. No stimulus there.
The only real stimulus is the temporary cut in Social Security taxes, the extension of unemployment insurance plus a few minor tax breaks for regular people, totaling about $200 billion. That's a little more than one percent of a $15 trillion economy. Pretty puny, certainly a lot smaller than the inadequate stimulus of February 2009 when the recession was only beginning to deepen.
Except for the extension of unemployment insurance, which should be done out of common decency, most of the "stimulus" is pure Republican ideology -- stimulate the economy by cutting taxes. If that had worked, the huge tax cuts of the Bush years would have kept the economy out of recession.
There is not a nickel of public investment or direct job creation in this proposed deal. And it is well recognized by economists that in a recession, temporary tax cuts, especially tax cuts tilted to the rich, provide far less bang for the buck than public investment.
If Obama had fought for a deal that restored Clinton-era tax rates on the richest two percent of the population, and used the revenue for direct investment and job creation, that would have been a stimulus worth celebrating. And doubtless, commentators like Krauthammer and Brooks would be condemning it.
Because the Congressional Budget Office assumed that all the Bush tax cuts would expire on December 31, 2010, the tax-cut deal creates a new budgetary reality. Suddenly, the ten-year deficit will be almost $900 billion larger than projected.
This, in turn, will give new ammunition to the deficit hawks. And here is where Obama has set up Social Security to take the hit, unless he drastically shifts ground.
The supposed crisis of Social Security is a phony. Social Security is financed by payroll taxes. Reduce unemployment, increase wages, and the crisis disappears. Even with only modestly better unemployment rates and wage growth, the modest projected shortfall could be eliminated by eliminating the cap on income subject to tax.
A Democratic president with strong progressive principles and political nerve would have taken his party into the mid-term election pledging never to cut Social Security and daring Republicans to take a similar pledge. Instead, Obama appointed a deficit commission with a majority of appointees wanting to cut the Democrats' signature program -- thus blurring party differences on the Democrats' biggest political winner.
Obama also signaled Democrats in Congress that he might well include Social Security cuts as part of a grand deficit-reduction deal. If that occurs, the civil war in the Democratic Party will only deepen.
Coda: The other day, I was part of a conversation in which the question came up: If Democrats in Congress do hold their noses and vote for the tax-cut deal in order to prevent unemployment benefits from being cut off on Christmas, what might they ask of Obama in return? There is not a great deal that he can deliver legislatively, unless he decides to get serious about wielding his veto pen.
The best idea to emerge was this: Democrats should demand, in return for their aye votes, that Obama appoint Elizabeth Warren to chair the National Economic Council, to succeed the departing Larry Summers. Warren is the one senior administration official who has not stopped fighting to protect regular Americans. She is not a Ph.D economist, but neither was the man for whom the Council was created, its first head, Robert Rubin. Nor was Rubin's successor, Gene Sperling.
According to press reports, the man about to get the job is Roger Altman, an investment banker and former deputy to Rubin. Altman has been to the White House at least three times in recent weeks, and his appointment seems all teed up. Altman would continue the Wall Street dynasty around Obama -- the very gang whose reckless deregulation and speculation brought us the economic collapse whose damage is now being used to justify wrecking Social Security.
Getting Warren instead of Altman would almost justify voting for this stinker of a tax deal. Maybe Warren could even get Obama to think twice about the political and economic wisdom of throwing Social Security on the pyre of deficit reduction.
How will this occur? The deficit commission appointed by the President has called for an increase in the retirement age, as well as other cuts in benefits over time. And the deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the cross-hairs.
The deficit commission has tried to camouflage these cuts by emphasizing that Social Security benefits for the very poor would not be reduced, and might even be increased. But in the commission's proposal, the cuts would affect middle-class retirees. Larry Summers, who is stepping down as Obama's economic chief, has refused to rule out cuts.
Social Security has also been softened up by the element of the tax deal that temporarily cuts payroll taxes. Supposedly, the trust funds will be made whole by a transfer from general government funds. But this increases the deficit.
So Obama has created a kind of pincer attack on Social Security. One arm is the deficit commission, which has created the blueprint. The other is the tax-cut deal, which increases the deficit, adding to the artificial hysteria that Social Security is going broke. Meanwhile, the right is playing a very cute game, congratulating Obama for the deal. According to columnist Charles Krauthammer, writing in Friday's Washington Post, "Barack Obama won the great tax-cut showdown of 2010." Really? How did he do that? It sure looked like he got rolled. "The President negotiated the biggest stimulus in American history, larger than the 814 $billion 2009 stimulus package."
The New York Times' resident right-wing pundit, David Brooks, also writing Friday, was peddling the same line:
"The fact is, Obama and the Democrats have had an excellent week," Brooks wrote. "The White House negotiators did an outstanding job for their side."
When the right congratulates Obama for winning, you know he is losing. For starters, the proposed compromise isn't much of an economic stimulus. If the deal passes Congress, taxpayers will be paying the same income tax rates in 2011 and 2012 as in 2010. No stimulus there.
The only real stimulus is the temporary cut in Social Security taxes, the extension of unemployment insurance plus a few minor tax breaks for regular people, totaling about $200 billion. That's a little more than one percent of a $15 trillion economy. Pretty puny, certainly a lot smaller than the inadequate stimulus of February 2009 when the recession was only beginning to deepen.
Except for the extension of unemployment insurance, which should be done out of common decency, most of the "stimulus" is pure Republican ideology -- stimulate the economy by cutting taxes. If that had worked, the huge tax cuts of the Bush years would have kept the economy out of recession.
There is not a nickel of public investment or direct job creation in this proposed deal. And it is well recognized by economists that in a recession, temporary tax cuts, especially tax cuts tilted to the rich, provide far less bang for the buck than public investment.
If Obama had fought for a deal that restored Clinton-era tax rates on the richest two percent of the population, and used the revenue for direct investment and job creation, that would have been a stimulus worth celebrating. And doubtless, commentators like Krauthammer and Brooks would be condemning it.
Because the Congressional Budget Office assumed that all the Bush tax cuts would expire on December 31, 2010, the tax-cut deal creates a new budgetary reality. Suddenly, the ten-year deficit will be almost $900 billion larger than projected.
This, in turn, will give new ammunition to the deficit hawks. And here is where Obama has set up Social Security to take the hit, unless he drastically shifts ground.
The supposed crisis of Social Security is a phony. Social Security is financed by payroll taxes. Reduce unemployment, increase wages, and the crisis disappears. Even with only modestly better unemployment rates and wage growth, the modest projected shortfall could be eliminated by eliminating the cap on income subject to tax.
A Democratic president with strong progressive principles and political nerve would have taken his party into the mid-term election pledging never to cut Social Security and daring Republicans to take a similar pledge. Instead, Obama appointed a deficit commission with a majority of appointees wanting to cut the Democrats' signature program -- thus blurring party differences on the Democrats' biggest political winner.
Obama also signaled Democrats in Congress that he might well include Social Security cuts as part of a grand deficit-reduction deal. If that occurs, the civil war in the Democratic Party will only deepen.
Coda: The other day, I was part of a conversation in which the question came up: If Democrats in Congress do hold their noses and vote for the tax-cut deal in order to prevent unemployment benefits from being cut off on Christmas, what might they ask of Obama in return? There is not a great deal that he can deliver legislatively, unless he decides to get serious about wielding his veto pen.
The best idea to emerge was this: Democrats should demand, in return for their aye votes, that Obama appoint Elizabeth Warren to chair the National Economic Council, to succeed the departing Larry Summers. Warren is the one senior administration official who has not stopped fighting to protect regular Americans. She is not a Ph.D economist, but neither was the man for whom the Council was created, its first head, Robert Rubin. Nor was Rubin's successor, Gene Sperling.
According to press reports, the man about to get the job is Roger Altman, an investment banker and former deputy to Rubin. Altman has been to the White House at least three times in recent weeks, and his appointment seems all teed up. Altman would continue the Wall Street dynasty around Obama -- the very gang whose reckless deregulation and speculation brought us the economic collapse whose damage is now being used to justify wrecking Social Security.
Getting Warren instead of Altman would almost justify voting for this stinker of a tax deal. Maybe Warren could even get Obama to think twice about the political and economic wisdom of throwing Social Security on the pyre of deficit reduction.
14 December 2010
The Hidden Cost of Capitulation 8DEZ10
IF this tax deal passes as presented Pres Obama is going to be hard pressed to prove Cenk Uygur wrong, that we were not played and betrayed. One expects that from most republicans, but not from the man who once gave us hope.
Now that the president has signaled yet another collapse in agreeing to tax cuts for the rich, there is a hidden cost to this capitulation. He is now stuck defending this deal for the rest of his term. I predicted this on the show yesterday and today it's playing out exactly the way I imagined, with the president sending out advisers to talk about what a great idea it is to give tax cuts to the rich.
Once you sign off on a political position, you own it. This could be a corollary to Colin Powell's doctrine on foreign policy. Powell said if you break it, you own it. In this case, if you make it, you own it.
The president claims he will fight hard against these same tax cuts two years from now. It's hard to stop laughing long enough to make a point against that, but I will try. If you are sending out your people to talk up polls about how right the Republicans were on the tax cuts for the rich now, how are you going to send out the same people to talk about how wrong they were - and how wrong you were - two years from now?
These are the things that make me wonder if President Obama has a firm grasp on basic political fundamentals. Yesterday he said that the political reality is that he just didn't have the votes in the Senate (by far his favorite excuse). He even said "I can't win" in the Senate. That's a damning reversal for a man who ran on "Yes we can."
But more importantly, he doesn't seem to understand Politics 101. You don't just count the votes based on how the other side says they're going to vote. From time to time, you call their bluff. Which means you go to the home states of swing senators like Scott Brown in Massachusetts and Olympia Snowe in Maine and you campaign on this winning issue there until you make them feel the political pain. Then you put them to a decision -- do you want to risk your career voting against me on this issue where I have huge popular support or do you want to vote with me? Then you take the vote and they will bend. If he doesn't understand that, boy did we elect the wrong guy.
Of course, the alternative is that he does understand that but doesn't ever have the stomach for a real fight. Or even worse yet, secretly likes this deal and will always find an excuse to get more tax cuts and sweet deals for the rich and powerful. In which case, boy did we elect the wrong guy.
Watch The Young Turks Here
Follow Cenk Uygur on Twitter: www.twitter.com/TheYoungTurks
Once you sign off on a political position, you own it. This could be a corollary to Colin Powell's doctrine on foreign policy. Powell said if you break it, you own it. In this case, if you make it, you own it.
The president claims he will fight hard against these same tax cuts two years from now. It's hard to stop laughing long enough to make a point against that, but I will try. If you are sending out your people to talk up polls about how right the Republicans were on the tax cuts for the rich now, how are you going to send out the same people to talk about how wrong they were - and how wrong you were - two years from now?
These are the things that make me wonder if President Obama has a firm grasp on basic political fundamentals. Yesterday he said that the political reality is that he just didn't have the votes in the Senate (by far his favorite excuse). He even said "I can't win" in the Senate. That's a damning reversal for a man who ran on "Yes we can."
But more importantly, he doesn't seem to understand Politics 101. You don't just count the votes based on how the other side says they're going to vote. From time to time, you call their bluff. Which means you go to the home states of swing senators like Scott Brown in Massachusetts and Olympia Snowe in Maine and you campaign on this winning issue there until you make them feel the political pain. Then you put them to a decision -- do you want to risk your career voting against me on this issue where I have huge popular support or do you want to vote with me? Then you take the vote and they will bend. If he doesn't understand that, boy did we elect the wrong guy.
Of course, the alternative is that he does understand that but doesn't ever have the stomach for a real fight. Or even worse yet, secretly likes this deal and will always find an excuse to get more tax cuts and sweet deals for the rich and powerful. In which case, boy did we elect the wrong guy.
Watch The Young Turks Here
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