How The Alternative Minimum Tax Could Slam You 13NOV12

HERE is a great article from NPR on the ATM, Alternative Minimum Tax, and how it may cost some a lot more in taxes because our Senators and Representatives, republicans and Democrats alike, can't get their act together and fix this permanently. It is important to keep track of the negotiations on resolving the problem of the fiscal cliff (sequestration) to make sure the poor, working class and middle class are not hit by higher taxes and cuts in services while the write-offs, loopholes and deductions of the rich, corporations and the bank-financial cabal are left intact. The people voted for a government for all the people, not just the plutocrats, and we will not tolerate kow-towing and pandering to them any more. Keep informed and stay involved.....

by Marilyn Geewax

Enlarge Mark Humphrey/AP Customers line up at an H&R Block office in Nashville, Tenn., on April 17, the deadline for filing 2011 federal income taxes.

Seriously, again?
Anyone who follows the adventures of the alternative minimum tax has to be getting sick of the many sequels. Again and again, this unpopular income tax threatens to hit middle-class families with large and unexpected tax increases.
And each time the threat reappears, Congress applies a "patch" to fix the problem temporarily. That makes the threat an annual event — along with the associated congressional hand-wringing and taxpayer confusion.
So here we are again, with the AMT looming over about 27 million more taxpayers this year. It's just one part of the so-called fiscal cliff — a big cluster of automatic spending cuts and tax hikes that will take effect at year's end unless Congress acts.

November 13, 2012

Hear Marilyn Geewax Discuss The Alternative Minimum Tax On 'Tell Me More'

[7 min 18 sec]

 

To understand the AMT, you need three chunks of information, involving its history, its impact and the politics. Let's get started.
AMT History
In 1969, Congress enacted an individual AMT to ensure that everyone paid a minimum amount of taxes, even while preserving tax breaks written into the code as economic and social incentives.
Here's an example: Congress wanted to keep the home mortgage interest deduction to provide more incentive to buy real estate, on the grounds that homeownership has economic and social value. But the tax code had so many different deductions that some wealthy people would take lots of them and end up paying very little in taxes.
So Congress, in effect, said, "OK, let's keep the cherished deductions, but still make sure the rich pay their fair share. Wealthy Americans can figure out their taxes the regular way, taking whatever deductions that may apply to them. And then they can recalculate everything under a formula that sets a minimum amount of tax. The wealthy taxpayers will pay whichever amount of taxes is greater."

Planet Money

The Fiscal Cliff, In Three And A Half Graphics

Economy

How The Fiscal Cliff Would Hit The Economy

Alternative Minimum Tax Could Affect Millions

But Congress did not build in an inflation escalator. And then it cut tax rates. The combined effect of higher inflation and lower rates played havoc with the intention of the AMT, allowing the parallel tax system to cover more and more middle-class families. A tax that was supposed to hit only the richest Americans must continually get updated or it will affect larger and larger numbers of average people.
AMT Impact
Originally, the AMT was supposed to affect only the top taxpayers. These days, Congress "patches" it so that it hits around 5 million upper-middle-class households. Usually, those are families with children in high-cost states like New York and California.
This year, unless Congress applies a new patch, the AMT will apply to nearly half of people with incomes of $75,000 to $100,000. Without action, an estimated 27 million more tax filers could find themselves paying an average of $3,700 more in taxes for 2012.
And yes, the financial hit applies to this tax year. Even if the new, incoming Congress applies an AMT patch after January, experts say it will be an accounting nightmare. It's difficult to undo the tax once the filing season has begun in January, and at the least, it would result in long processing delays of all returns.
"The biggest and thorniest problem for the IRS and next year's filing season is the AMT patch," IRS Commissioner Doug Shulman said in a September speech to the American Bar Association.
Raising taxes for tens of millions of middle-class Americans and delaying tax refunds for millions more would hurt consumer spending, economists say.
AMT Politics
The AMT makes for a fine Exhibit A for anyone trying to make the case that the U.S. tax code is a mess. And that means it may have some positive political value as Congress struggles with the fiscal cliff and its tangled collection of expiring tax breaks. The AMT is so unpopular that lawmakers may be able to use its elimination as a kind of "carrot" to get lawmakers to move along toward compromise.
On the other hand, often on Capitol Hill, dangling a juicy "carrot" in front of lawmakers can hurt negotiations as each side scrambles to grab it first and hold tight.
"If patching the AMT were the only thing out there, it would get done," says Eric Toder, co-director of the Tax Policy Center, a nonpartisan research group. But as part of a grand bargain on taxes and spending, "this could get tied up in the negotiations," he warns.
So why does Congress annually put itself through this weird exercise of having to patch the AMT? Why not just eliminate it?
Toder says the problem is that the AMT — if unpatched — generates loads of theoretical tax revenues in coming years. When Congress puts together the annual federal budget and projects deficits into the future, it knows that having an unpatched AMT will make the fiscal future look brighter. But each year, Congress does not allow those projected revenues to actually come into Treasury coffers because it patches the AMT.
In other words, the AMT exists today to make Congress look less inept at budgeting in the future, Toder says. "They can only afford to kill it a year at a time," he says. "It's a mess."

Your Money

How The Alternative Minimum Tax Could Slam You

It could add thousands to the tax bills of millions of Americans this year. Will Congress fix it?

Your Money

Alternative Minimum Tax And Your Bottom Line

Millions of households could see tax increases because of an obscure part of the tax code.

Shots - Health News

High-Deductible Health Plans Can Cost Patients A Discount

People hoping to save a few dollars by picking a plan with low upfront costs may be losing out.
http://www.npr.org/2012/11/12/164980052/how-the-alternative-minimum-tax-could-slam-you?ft=3&f=1001&sc=nl&cc=nh-20121113

Obama urges GOP to break ‘stalemate’ over debt talks 25JUL11

PRESIDENT OBAMA'S speech on the budget and federal budget cap and the stalemate in Congress. We can only hope the President really does stand up to the gop / tea-baggers and not allow them to destroy the nation. Compromise doesn't mean kow-towing to the gop / tea-bagger demands. The deal must include cuts to the corporate welfare system and to the bloated, wasteful and corrupt Pentagon budget. Social Security must not be touched because it has not contributed one penny to the national deficit. President Obama has to take the moral high ground, not a difficult move after rep john boehner's performance on TV tonight, and stand firm for the American people; the poor, the retired, the disabled, the working class, the middle class, all of us who have already paid more than our share since the george w bush presidency. If necessary President Obama MUST invoke the 14th Amendment of the U.S. Constitution. From the Washington Post...
By Zachary A. Goldfarb
President Obama on Monday used a nationally televised address to urge House Republicans to stop standing in the way of a deal to tame the nation’s debt and raise the federal limit on borrowing, making his most direct appeal to the American people in the confrontation over the debt.
Obama said failure to raise the debt ceiling within the next week “would risk sparking a deep economic crisis.” He said he would not be able to pay all of the government’s bills, including Social Security checks and veterans’ benefits.
The president endorsed a Senate Democratic plan unveiled Monday that would save $2.7 trillion in spending over 10 years in exchange for raising the federal debt ceiling through 2012. He rejected a competing House Republican plan that could save up to $3 trillion while raising the debt ceiling in two stages — the first lasting six months.
Obama reserved his harshest words for House Republicans as he called on them to join him in breaking a “stalemate” and forging a compromise that balances cuts in government spending with new tax revenues from the wealthy and corporations.
“The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach – an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all,” Obama said in the East Room of the White House.
In a response following the president’s statement, House Speaker John Boehner (R-Ohio) said Republicans had fought to rein in the national debt, but that Obama had refused to compromise.
“I want you to know I made a sincere effort to work with the president to identify a path forward,” Boehner said. “Unfortunately, the president would not take yes for an answer. Even when we thought we might be close on an agreement, the president’s demands changed.”
“The president has often said we need a ‘balanced’ approach -- which in Washington means: we spend more. . .you pay more,” the speaker said. “Having run a small business, I know those tax increases will destroy jobs.”
At the same time, Boehner acknowledged that the debt ceiling must be raised and said he would press on with the Republican plan that Obama rejected. “The United States cannot default on its debt obligations,” Boehner said.
“The solution to this crisis is not complicated: If you’re spending more money than you’re taking in, you need to spend less of it,” he said. “I’ve always believed, the bigger [the] government, the smaller the people.”
In his remarks, Obama acknowledged that most people outside Washington might not be familiar with the particulars of the debt debate, and he told Americans what might happen if the debt ceiling is not raised.
“For the first time in history, our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet,” Obama said. “Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis – one caused almost entirely by Washington.”
“I’m asking you all to make your voice heard,” Obama said. “If you want a balanced approach to reducing the deficit, let your Member of Congress know.”
Obama’s speech came with just about a week before the Treasury Department has said the government will need to borrow more money to pay for all its obligations. The administration has warned of catastrophic default on government obligations if the debt ceiling is not raised by Aug. 2.

Winners and Losers From the Great Recession from Mother Jones 30JUN11

HERE'S a great article from Mother Jones showing the real winners from this last recession and no big surprise it is corporations come out on top guaranteeing the political whores on Capital Hill will keep receiving their back money as long as they keep all revenue increases out of any federal budget cap agreement.

So who's benefited and who hasn't from the current recovery following the Great Recession? I think you know the answer already, but just to make it official, here's a report from researchers at Northeastern University's Center for Labor Market Studies:

Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. The extraordinarily high share of national income (88%) received by corporate profits was by far the highest in the past five recoveries from national recessions.

Here it is in table format, in case you want to see comparisons to previous recessions and recoveries:

Plainly, what's needed to address this crisis is tax cuts for corporations and reduced federal spending on workers. But who will speak up for our downtrodden corporate sector? It is a vexing problem.
Via Economix.

Will Politicians Listen to Pastors (calling for a moral budget)? 14JUL11

THE wealthy and corporate America, the financial and banking industries, and a vast majority of the gop / tea-baggers in Congress as well as those in state and local governments have declared war on the poor, the working class and the middle class in America. This is class warfare, an epic struggle of morality against immorality, a struggle to stop the greed and lust for power and control the gop / tea-baggers are fighting for, an all out battle for the soul of the nation. From Sojourners.....

The way you think and feel about the world is shaped by what you see when you get out of bed in the morning. I remember hearing this from civil rights activists. It simply means that perspective is hugely determined by place, context, and vantage point. This is profoundly true for me and most of the people I've ever met. You see the world from the place you live.
Part of the problem in the current budget impasse in Washington, D.C. is the perspectives of the politicians in the debate. Every morning they see and hear each other; the gladiator ring of national politics; the Washington media; their donors; their ideological base; and their latest poll ratings. Sure enough, the perspective that dominates politicians of both parties on the budget is who's up and who's down; whose power is growing or diminishing; whose constituents and donors are better organized and get their interests in front of the lawmakers; what the pollsters say; and how the end result of the debate will impact electoral gains. This perspective also dominates the news coverage.
So we at Sojourners thought there needed to be another perspective in this debate, and that the nation needed other voices. We need to hear from people who see and hear something different from politicians when they get up in the morning -- real people who are struggling, some of whom are poor, families, children, and the elderly, and maybe people whose job forces them to have to read the Bible.
I'm talking about local pastors. Every day, pastors relate with the people in their congregations and communities. Pastors can't avoid the real world, which is so easy to do in Washington, D.C.
We wondered, what do pastors think about the budget debate? We decided to go to them and ask them to speak out, and now they have. "An Open Letter to Congress and the President" was initiated by a group of pastors two weeks ago and sent out to their colleagues. Their letter talked about the real people who will be most impacted by this debate, and that any budget deal should be evaluated by how it affects the poorest and most vulnerable. God requires this of us, they asserted. We decided to try for 1,000 signatures from local pastors -- in July, when so many people are away, when things are shutting down for the summer, when it's hardest to get a response on anything. It was an act of faith. So far, in two weeks, 4,700 pastors have responded and made their voices clear. A full page ad titled, "Listen to Your Pastors" appeared in Politico yesterday. A copy of the ad with a full list of signers is here. You can also listen to a press call I moderated on Wednesday featuring Rev. Rich Nathan, Rev. Nadia Bolz-Weber, and Rev. Derrick Harkins.
"The recession has cost hundreds of our church members' jobs and homes," said Rev. Rich Nathan, senior pastor of the Vineyard Church of Columbus in Columbus, Ohio. "But I am concerned about something that has even more devastating consequences for our nation: the adoption of a philosophy that says, 'I got mine! You're on your own!' Jesus had an infinitely wiser philosophy for building a flourishing society: 'Love your neighbor as yourself.' This is as meaningful in today's budget debates as it was two thousand years ago in ancient Israel."
Growing numbers of Christians are condemning the immorality of extending tax breaks and benefits for the wealthy, while programs that help the poor and vulnerable meet their most basic needs are being cut. The clergy signers of the letter told political leaders, "We work, pray, and do whatever we can to remain faithful to the responsibility of every Christian to help the poor. Still, we can't meet the crushing needs by ourselves." They reminded Congress that government is a critical and necessary partner in serving the common good.
Rev. Nadia Bolz-Weber, founding pastor of House for All Sinners and Saints in Denver, Colorado, was also a recipient of a program that could be cut. "As a member of the clergy and a mother of two children with strong minds and bodies -- which benefited for three years from WIC [the Women, Infants, and Children program] -- I stand with all Christians in America who believe the cries of the poor and the cries of the children are not only the very voice of Christ, but are indeed the sound of our future waiting for response," Rev. Bolz-Weber said. "How shall we answer?"
In their letter, the clergy rejected the false choice between moral and fiscal responsibility, and reminded political leaders of the need to get our country's finances in order without making the poor bear the burden of deficit reduction. "This is not about some nameless, faceless 'other.' The choices politicians make about the budget will harm or help our neighbors," said Rev. Derrick Harkins, senior pastor of the Nineteenth Street Baptist Church in Washington, D.C. "We want to serve those who don't have lobbyists on K Street. Our budget is a moral document, and it is either going to reflect the best of who we are, or the worst.”
Christian opposition to budgets cuts that harm low-income people continues to grow. In May, more than 50 of America's most prominent Christian leaders formed a "Circle of Protection" coalition that laid out principles and values for a moral budget. Thousands of people of faith have since joined this campaign.
Our country is in the midst of a clash between two competing moral visions, between those who believe in the common good, and those who believe individual good is the only good. A war has been declared on the poor, and it is a moral imperative that people of faith and conscience fight on the side of the most vulnerable. Pastors have spoken up. Will the lawmakers listen to their pastors? This may be the only hope we have as we grimace in listening to reports of their budget debates. Hoping the politicians listen to their pastors is also an act of faith in July. But you never know.
Jim Wallis is the author of Rediscovering Values: A Guide for Economic and Moral Recovery, and CEO of Sojourners. He blogs at www.godspolitics.com. Follow Jim on Twitter @JimWallis. 

Freshman Republicans Lobby Federal Agencies For Millions Amid Spending Critiques 5JUL11

MORE glaring hypocrisy from the gop / tea-baggers that are holding up a deal on raising the federal budget cap by insisting on massive cuts in federal spending and no revenue increases. They want spending to be cut, but not in their districts. From HuffPost....

WASHINGTON -- For years, Tennessee lawmakers have advocated for the construction of a major port on the northwest corner of the state on the Mississippi River. Known as the Port of Cates Landing, the project would include a 9,000-foot slack-water harbor, an adjacent 350-acre industrial park, improvements to local roads to connect it to U.S. Highway 78, and a short-line railroad to a larger rail line 28 miles away. It would, by some estimates, create thousands of jobs -- a much-needed boon for the Lake County region, 37.8 percent of whose residents live below the poverty line.
It also would cost a fair amount of cash. By the spring of 2011, more than $33 million had been invested in the project; an additional $20 million -- $13 million from the federal government, $7 million from the state of Tennessee -- was on its way. But as Congress, in an effort to avert a shutdown, began looking for federal expenditures to shave off the budget, Cates Landing's future suddenly became unclear. It was, among other transportation projects, on the chopping block.
Rep. Stephen Fincher (R-Tenn.), a member of the freshmen Republican class of the House of Representatives whose district includes the port project, faced a predicament. Elected as a fiscal hawk, with pledges to get spending under control, he could either go to the mat for Cates Landing or make a philosophical, self-sacrificial statement.
He chose the former. On March 8, 2011, Gannett news service reported that the funding for Cates Landing was being targeted by lawmakers looking to slash the federal budget. The same day that report came out, Fincher spoke directly with Department of Transportation Secretary Ray LaHood about the funds. The next day, he wrote a follow-up letter seeking assistance in "obligating" the $13 million grant for the port.
"The contract is currently before your Department and ready to be signed," the letter read. "I am respectively requesting you to help push this project over the final hurdle. There is no law, regulation, or other legal obligation to prevent you from signing this contract and I urge you to do so without further delay."
The lobbying had its intended results. The grant was signed on March 18, according to a Department of Transportation spokesperson, with the goal of finishing construction by the fall.
"We just wanted to make sure that we could do everything possible to create jobs, and this was a part we could play and I did everything I could and we were successful," the congressman declared a few days later to reporters, onlookers and fellow lawmakers, at an event praising the incoming funds.
Two days after writing LaHood, Fincher voted for the a Republican House budget that cut billions of dollars, including from many other transportation priorities. His office put out a press release scolding "out of control" and "reckless" federal spending.
As lawmakers prepare to cut trillions of dollars from the budget as a condition to raising the nation's debt ceiling, the story of the Cates Landing project underscores the dilemma that faces many members of the Republican-run House and the freshmen class in particular. Federal spending is derided as nothing short of a threat to the country's future -- unless, of course, it happens to be directed at that congressman's home district.
Sara Sendek, a spokesman for Fincher, noted that the $13 million grant request was actually made by his predecessor, Rep. Jon Tanner (D-Tenn.). Even so, she added, "Congressman Fincher does support this project."
As for the why: "He believes government does play a role in creating an environment that attracts private investment and job growth. This project does exactly that," she said. "It is very important for Tennessee's economy and for the country's economy. So it was absolutely worthwhile."
Such an explanation sounds like something out of the mouth of a Keynesian economist, rather than the musings of a congressman who proudly touts his support from the Tea Party movement. But Fincher is hardly alone. A Freedom of Information Act request of the communications between freshmen House members and federal agencies reveals that, in private, GOP lawmakers have pressed for tens of millions of dollars in federal help for their districts, even while decrying federal spending in front of the national press corps.
Take, for instance, Rep. Bill Johnson (R-Ohio). On March 8, the freshman Republican co-signed a letter to the Federal Aviation Administration requesting that the Department of Transportation fund a project to improve a runway at the Youngstown-Warren Regional Airport. The cost of the improvement: $4.365 million.
Less than a month later, on the floor of the House, he declared that "our nation is broke. The federal government has maxed out its credit card."
Unlike Fincher, Johnson -- who wrote the letter with Rep. Tim Ryan (D-Ohio) -- was unsuccessful in his request. A spokesman for the FAA told HuffPost that no funds have been obligated yet for runway improvements. Yet on the broader question of whether it was inconsistent for a lawmaker who has repeatedly deplored government spending to privately request his own slice of the pie, Johnson's office attempted to draw distinctions.
“There’s a difference between smart federal spending and the reckless, irresponsible waste of tax dollars the American people are fed up with," said spokesperson Jessica Towhey. "Congressman Johnson joined with Rep. Tim Ryan in a bipartisan request to the FAA for safety improvements at a part of the Youngstown-Warren Regional Airport that the FAA has determined is not safe. This airport is a growing hub for travel and business in Northeast Ohio, and there is strong bipartisan support to ensure the safety of travelers and airport employees.”
The problem with this logic, as budget experts note, is that every member insists that the spending he or she requests is smart, not reckless, in nature. Not everyone, however, came to office on a promise to implement cuts across the board.
"I think members are conflicted," explained Stu Rothenberg, editor of the Rothenberg Political Report and one of the most seasoned observers of national politics. "In the old days, the rules were pretty clear -- you just tried to bring home the bacon. You sent out press releases, held press conferences, and got credit for getting jobs in your district … It's more complicated now because there are pressures at odds with each other. As a U.S Representative you have, on one hand, a higher calling. You have to address runaway spending. But that is offset by the role you play for the folks back home."
Complicating the landscape even further are the new budgeting rules that Congress has imposed on itself. Whereas in days past, lawmakers could earmark, meaning they tacked amendments onto bills that directed money toward provincial projects, today that practice is banned. As a result, lawmakers have forfeited a tremendous amount of power to the executive branch. Instead of being able to set aside funds for projects in their home states or districts, members are now reduced to lobbying federal agencies for unspent funds.
"It is what we have called 'lettermarking,'" said Steve Ellis, Vice President of Taxpayers for Common Sense, a national non-partisan budget watchdog. "It is something we have all recognized will become more prevalent with the lack of traditional earmarks. There are larger amounts of money going to agencies without it being designated for specific projects."
Begging a cabinet secretary for help is humbling enough for any member. For House GOP freshmen, it's created a nearly irreconcilable bind. And so many have chosen to simply remain quiet about their funding requests.
On March 1, Rep. Rick Crawford (R-Ark.) wrote Agriculture Secretary Tom Vilsack, urging him to support a grant application submitted to the U.S. Department of Agriculture Biomass Crop Assistance Program division by MFA Oil Biomass LLC. The company was spearheading a project to "provide farmers an alternative energy crop source, as well as new crop processing technology." An infusion of federal funding, Crawford added, would "create a significant number of new jobs for Arkansas." (A review of campaign finance records revealed no contributions from MFA Oil Biomass or its board to Crawford's campaign committee.)
Type in "MFA Oil" on the congressman's website and you get no result. When the project was approved in mid-June, however, a press release was posted on the websites of both of the state's senators.
Even altruistic funding requests have gone largely below the radar. Rep. Joe Walsh (R-Ill.), for instance, wrote the Department of Agriculture on February 14, asking for $7,498,015 in cash and commodities contributions for the American Nicaraguan Foundation and Fabretto Children's Foundation -- groups that run education, health and nutrition programs in Nicaragua. Neither the congressman's office nor the Fabretto Children's Foundation returned requests for comment as to whether the funding went through. At a time when foreign aid is considered low-hanging fruit in the search for spending reductions, Walsh may have wanted to avoid drawing attention to that expense.
On the rare occasion when the press has gotten wind of a freshman House Republican making a funding request, it has turned heads. Rep. Allen West (R-Fla.), was criticized for putting out a press release on March 17 that praised the issuance of a $21 million federal grant to the Fort Lauderdale–Hollywood International Airport for the construction of a second commercial runway. And Rep. Michael Grimm (R-N.Y.) was praised locally, but raised some eyebrows nationally, when he sought federal grants and other aid for Staten Island’s two hospital systems.
Perhaps the most notorious example, however, came when the House put together a defense authorization act for fiscal year 2012 and members added on expenditures as "en bloc" amendments. According to their technical definition, they weren't earmarks, and the defense department would still have the power to authorize the money. Fundamentally, however, the add-ons were the type of bacon that House freshmen had pledged to do away with.
Rep. Steven Palazzo (R-Miss.), one of those freshmen, secured $10 million to purchase land for training facilities as well as $19.9 million for ship preliminary design and feasibility studies. Rep. Bobby Schilling (R-Ill.), another freshman, secured $2.5 million for weapons and munitions advanced technology -- money that could end up in the Quad City Manufacturing Lab at the Rock Island Arsenal, located in his district.
As much as the spending requests raise questions about the ideological consistency of the freshmen Republican class, they also underscore the arguments Democrats have been making during the height of deficit-reduction debate: The government plays a vital role in activities that the private sector often avoids.
This, undoubtedly, was what compelled freshmen Reps. Kristi Noem (R-S.D.), Scott Tipton (R-Colo.), Cory Gardner (R-Colo.) and Kevin Yoder (R-Kan.) to co-sign an April 6 letter to the Department of Agriculture requesting that unused funds be spent helping the Rocky Mountain Region combat a bark beetle epidemic. It also seemed to be the thought process behind another letter Noem wrote to the Agriculture Department, demanding that South Dakota get its fair share of federal funds for wildfire damage control. Noem's office did not return a request for comment.
Whether these members can turn around and make that argument that, for all their anti-spending bluster, the money they have requested is both legitimate and necessary may prove a tricky -- though not impossible -- task. Securing a contract for a defense company in one's home district or getting a grant to build a new port are tried and true measures of securing voter support. And so long as the expenses are justified as legitimate and job-creating, even members of the Tea Party seem willing to limit their concerns to the practice of securing the money and not the money itself.
"Obviously there is going to be infrastructure spending, and one of the jobs of a Representative is to represent their district," said Mark Meckler, co-founder of Tea Party Patriots. "I would say that we should be paying close attention to this process of petitioning federal agencies [for money] … But I don't think anybody is saying that when the federal government is spending money, that no congressman should try to fund projects his district needs. I think what they are saying is we don't want egregious, crazy, pork barrel spending."

Pawlenty Draws Attention With Debt Ceiling Rhetoric, But Sends Mixed Signals On Action [UPDATED] 15JUL11

tim pawlenty believes the prc should be paid before members of the US Military and Social Security recipients if an agreement isn't reached on raising the federal budget cap. Since pawlenty is so concerned about the financial interest of the prc, who holds approximately 9% of our national debt, maybe he should run for office there. From HuffPost.....
WASHINGTON -- Tim Pawlenty on Friday joined the Jim DeMint wing of the Republican Party in the debt ceiling debate. Sort of.
Pawlenty argued in multiple TV interviews against Senate Minority Leader Mitch McConnell's plan to hand over primary responsibility of raising the debt ceiling to the president in exchange for no tax increases, saying there has to be structural change to change the federal government's spending patterns.
"It's a Band-Aid on a broken bone," Pawlenty said of McConnell's plan in an interview with Bloomberg TV. "It doesn't solve the problem ... I don't like it."
The former Minnesota governor's charged rhetoric appeared at first blush to align him with Sen. DeMint (R-S.C.) and other Tea Party lawmakers in the Senate and House, who have staunchly refused to consider voting for a debt ceiling increase unless there is a balanced budget amendment to the Constitution, among other things.
“It’s balance or bust,” DeMint wrote in an April fundraising email. “Agreeing on the right policy is not enough to save our country. Republicans also have to be willing to fight to enact that policy, even if it means sacrificing their political careers."
Pawlenty mentioned the balanced budget amendment as a "long term" goal that should be sought, but did not mention what kind of reforms should be sought in the short term. Many Republicans are still pushing for a cut, cap and balance plan that includes immediate spending cuts, spending caps for the future and the balanced budget amendment in the long term.
"This is uncomfortable. It's awkward. I know it's concerning to the markets for understandable reasons," Pawlenty said on CNBC Friday morning. "But if we don't get people in Washington D.C. to take this seriously and actually make the tough decisions -- they always say 'Oh, we're going to make the tough decisions. We'll do it. We'll do it,' and then they never do ... Now is the time. The hour is late, and these problems are big, and the only way you're going to get people to do something tough is to put their backs up against the wall."
Pawlenty aides highlighted that portion of the interview on Twitter. It came amid rising tensions about the consequences of a potential default by the U.S. government on its debts. It appears as though a substantial portion of the Republican base and some of the party's most vocal leaders in Washington are prepared to accept a default if they cannot convince President Obama and congressional Democrats to accept deep cuts to spending levels and sweeping changes to future commitments.
But in a portion of the same CNBC interview that was not promoted by the Pawlenty campaign, the candidate admitted that the debt ceiling will be raised.
"They're going to have to raise the debt ceiling," he said. "But they should get some structural reform."
In the Bloomberg TV interview released later in the day, Pawlenty said, "I don't think there should be a default. We shouldn't default. No, I don't think there will be."
That didn't stop the Democratic National Committee from sending out a press release with the subject header: "Pawlenty Calls For Default."
“Governor Pawlenty is hardly the only Republican who would prefer that the United States default on its debt, but as a presidential candidate, his words cannot be dismissed lightly," said DNC Chairman Debbie Wasserman Schultz.
The two sides define default differently. Republicans generally use it in a narrow sense, meaning a failure to pay creditors and bondholders, and believe this is the key issue to maintaining current interest rates and a stable stock market. Democrats often use it more broadly as referring to failure to pay any obligations, such as federal compensation, payments to vendors doing business with the government, or payments to those receiving government assistance, such as Social Security beneficiaries.
The DNC and others attacked Pawlenty for saying that creditors such as the Chinese should be paid before those in the military or Social Security recipients.
"Pawlenty has shown himself to have a truly sick and twisted set of values by advocating that it’s ok to keep paying foreign countries while cutting off senior citizens from their Social Security and Medicare that literally could make the difference between their life and death," said Eddie Vale, spokesman for Protect Your Care, a liberal organization founded to defend Obama's health care overhaul.
Republicans argue that prioritizing payments would maintain the AAA bond rating that keeps borrowing costs low, but financial analysts have said that there would be substantial negative financial consequences for such an action. Defaulting on Social Security obligations could also conceivably trigger a downgrade.
"Even in a scenario in which Treasury interest payments are 'prioritized,' halving other payments like Social Security or military salaries would drop the U.S. income level by 8-9 percent of GDP in a short period," wrote Steven Wieting, Managing Director in the Economic and Market Analysis team of Citigroup, in a July 11, 2011 report.
Wieting also wrote in his analysis: "The financial implications of an actual Treasury default, even briefly, could represent the largest financial shock in history, potentially creating a domino of defaults."
[UPDATE: 5:31 p.m.] - In another interview Friday afternoon on CNBC's "Kudlow Report," Pawlenty said that Republicans should pass the "Cut, Cap and Balance" plan through the House and Senate so that Obama has to veto it.
"If he vetoes it, then send him the installment plan, you know meter it out to him every couple of months so he has to come back and walk the plank every few months," Pawlenty said.
It appeared to be an admission by Pawlenty that the McConnell plan that he rejected earlier in the day would be the best option at the end of the day. Pawlenty's scenario was overly optimistic as well in projecting the passage of the "Cut, Cap and Balance" plan through the Senate, where Democrats hold a 51-to-47 advantage, with two Independents who caucus with the Democrats.
Kudlow pointed out that the Senate will not pass such a plan, but Pawlenty essentially ignored him, continuing to insist that Republicans force Obama to veto the idea.
"They should send him a bill and challenge him to veto it or sign it," Pawlenty said. "I'd send it to him relatively soon."
Pawlenty did have one suggestion to alter McConnell's plan, which would force Obama to request a debt ceiling increase three times between now and the 2012 election.
"I would make him come back every month, not just give him some six month window," he said.

Harry Reid And Mitch McConnell: 'Hybrid' Solution To Debt Standoff 14JUL11

AGAIN, a deal where the rich get off paying for nothing and the poor, the working and middle classes bearing the burden of a financial disaster created by the wealthy and the corporate welfare system. Where is the justice in this proposal? What is the moral foundation for giving into the greed and lust for more power, more economic control the rich and corporate America are demanding? Where is the leadership that is supposed to represent the 98% of us who actually have to work for a living and who have paid for the life styles of the rich, the corporate executives and the financial industry CEOs through their tax cuts and tax loopholes and tax subsidies? Everything has to be on the table, revenue increases through closing tax loopholes and ending tax cuts for the rich and corporations and cuts in the Pentagon's budget must be part of any agreement. 

WASHINGTON -- The Senate's top two officials are working on what one aide called a "hybrid," fail-safe solution to the debt ceiling debate that could garner enough political support to pass Congress.
The plan, which is being hatched by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), would ensure that over $1.5 trillion in cuts over ten years be passed into law. It would also grant President Obama the authority to extend the debt ceiling through the 2012 election season while requiring him to propose -- but allowing him to ultimately veto -- cuts beyond those initial $1.5 trillion.
Additionally, the deal would create a new "deficit commission" compromised solely of lawmakers who would be tasked with finding additional savings in the budget. The commission's recommendations would be given automatic, amendment-free votes in both chambers of Congress.
First reported by The Washington Post, the plan is far from complete. A Republican source on the Hill cautioned not to treat it as an official option, let alone a top one. "There are a lot of people with a lot of ideas," the source said. A Democratic source said that the language -- let alone composition -- of each part of the deal remains un-finalized.
But the contours do, on the surface, seem promising. The basic premise is to blend the debt ceiling deal crafted in talks led by Vice President Joe Biden with the plan that McConnell proposed this week, which would give the president authority to raise the debt ceiling while vetoing corresponding cuts.
As the dual plan is envisioned, House Republicans would be able to claim that they passed a deal without including revenue raisers or tax hikes. The president, meanwhile, will be able to move the debt ceiling debate into 2013, albeit while having to hold a largely pre-determined vote for a second extension (once the $1.5 trillion in cuts run out) before the election. Democrats would have to swallow a deal that didn't include revenues, but they will have protected entitlement programs like Social Security and Medicare from cuts.
"It is a hybrid approach," said the Democratic official familiar with the proposal. "It is a way to get us some cuts now while making sure we have an option that we do not default on our debt."
While the concept may seem politically palatable, it could easily fall apart over the specific details. For starters, negotiators are not yet locked in to the actual cuts that have been suggested during the Biden talks. The president, meanwhile, continues to push for a larger package of cuts and reforms. The failure to include revenue increases in the hybrid plan could pose serious problems for Democratic lawmakers. Further, the composition of the deficit commission -- let alone the number of members -- is subject to haggling.
"There is a lot of detail on the commission part not locked," acknowledged one source familiar with the McConnell-Reid talks.
UPDATE: Speaking to reporters on Thursday, Sen. Chuck Schumer (D-N.Y.) seemed to embrace the idea of combining the McConnell approach with the Biden talks.
"We would like to see, even if we can't get a grand deal, that some real cuts be added to Senator McConnell's proposal and perhaps Senator McConnell's proposal be modified," Schumer said. "That is another possibility, not as good as a larger deal, but certainly better than just avoiding default."

Obama Warns Cantor 'Don't Call My Bluff' As Debt Talks Stall & U.S. Put On Review For Possible Credit Rating Downgrade By Moody's 13JUL11

rep eric cantor's (r VA) extreme position in the deficit talks will be responsible for the economic damage to this nation if these talks fail. This is not to say Pres Obama should cave to the gop / tea-bagger demands, instead the President and Democrats need to remain firm in not giving in to the greed cantor is representing. rep john boehner r OH needs to remove cantor from these negotiations, he has become poison to the process,  and work with the President and others from both parties to reach a budget deal that includes closing tax loopholes and cuts to the corporate welfare system and to the budget for the Pentagon. From HuffPost....
WASHINGTON -- Lawmakers and the White House had what nearly every party is describing as a "tough" and "testy" meeting on the debt ceiling Wednesday afternoon, culminating in a stormy exchange between President Barack Obama and House Majority Leader Eric Cantor (R-Va.).
It was the fifth straight day of talks, but the first in which attendees, speaking on background, were willing to admit that steps were taken backwards. According to multiple sources, disagreements surfaced early, in the middle and at the end of the nearly two-hour talks. At issue was Cantor's repeated push to do a short-term resolution and Obama's insistence that he would not accept one.
"Eric, don't call my bluff. I'm going to the American people on this," the president said, according to both Cantor and another attendee. "This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political positioning, and protecting their base, than in resolving real problems."
Cantor, speaking to reporters after the meeting, said that the president "abruptly" walked off after offering his scolding.
"I know why he lost his temper. He's frustrated. We're all frustrated," the Virginia Republican said.
Democratic officials had a different interpretation. "The meeting ended with Cantor being dressed down while sitting in silence," one official said in an email. "[The president] said Cantor could not have it both ways of insisting on dollar-for-dollar and still not being open to revenues."
Lost in the rush to frame the dramatic conclusion of Wednesday meetings was word of the actual substance of the talks. According to several attendees, negotiations stalled from the onset over the same issues that have proved irresolvable. Working off of talks that had been spearheaded by Vice President Joseph Biden, the president said he would be comfortable signing off on northward of $1.5 trillion in discretionary spending and mandatory spending cuts. With additional negotiations, he added, he could move that figure up to $1.7 trillion, and with a willingness to consider revenue increases and tax loophole closures, lawmakers could get to over $2 trillion. His preference, he said, was to continue to push for the biggest package possible, so long as it was balanced.
Cantor, who has taken over the mantle of chief Republican negotiator from Speaker John Boehner (R-Ohio), responded by insisting that revenues were off the table and that without steeper cuts, the votes likely didn't exist to pass anything but a smaller, more temporary package. House Republicans needed the administration to go to a higher number, he added.
The president reportedly responded: "It is easy to get to a higher number when you are not asking anything difficult from yourself."
From there, the friction continued. When the White House pushed for an extension of unemployment insurance as part of the final package, Republicans objected. The White House was forced to explain that it would be offsetting that extension with cuts elsewhere. When the president pushed to lock in savings from cuts to the Department of Defense, Republicans objected again; this time, they were joined by Sen. Dick Durbin (D-Ill.), who urged (conversely) for the president to go further in pulling savings out of the Pentagon.
According to a Democratic official, the most contentious debate came when talks turned to discretionary spending, and, specifically, whether to count longterm savings based on current spending baselines or by tying them to inflation. Republicans wanted the former. It was, the official said, a debate over the "measurements of savings as opposed to the savings themselves."
From there, the conversation moved to how to enforce those savings in the long run. Those discussions, which took place between Sen. Jon Kyl (R-Ariz.) and top economic adviser Gene Sperling, were described as cordial compared to the earlier ones. But lawmakers quickly found themselves back on the same sticking point.
Unhappy that negotiators remained at approximately $1.7 trillion in cuts, Cantor pressed again for a shorter deal or for negotiators to find their way to $2.5 trillion. The president, growing more agitated, argued that attendees were simply looking for ways to say no.
"Talk about arbitrary," he said of Cantor's figure, according to a Democratic attendee. "I am totally willing to do the hard stuff to get well above what you need and you won't do it because you can't put one penny of revenue on the table."
"At least Mitch McConnell, to his credit, was willing to work for a solution," the president added, acknowledging the proposal by the Senate Minority Leader to, essentially, give him the authority to lift the debt ceiling without passing commensurate cuts.
"I have reached the point where I say enough," Obama concluded, according to Reuters. "Would Ronald Reagan be sitting here? I've reached my limit. This may bring my presidency down, but I will not yield on this."
Before Obama left the meeting, he gave lawmakers a directive. By Friday, the president said, the people in the room needed to have figured out what path they were going to pursue so that they could start hammering out the details.

U.S. Put On Review For Possible Credit Rating Downgrade By Moody's

Because of the "rising possibility" that Congress will not soon approve a deal to raise the debt limit, Moody's Investors Service has reportedly put the U.S. on review for a possible credit rating downgrade, according to Bloomberg.
From the Moody's statement:

Moody's Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody's had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit. In conjunction with this action, Moody's has placed on review for possible downgrade the Aaa ratings of financial institutions directly linked to the US government: Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks. We have also placed on review for possible downgrade securities either guaranteed by, backed by collateral securities issued by, or otherwise directly linked to the US government or the affected financial institutions.

From Reuters:

NEW YORK (Walter Brandimarte and Daniel Bases) - The United States may lose its top-notch credit rating in the next few weeks if lawmakers fail to increase the country's debt ceiling, forcing the government to miss debt payments, Moody's Investors Service warned on Wednesday. Moody's was the first among the big-three rating agencies to place the United States' Aaa rating on review for a possible downgrade, which means a negative rating action is impending.
In a statement, Moody's said it sees a "rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on U.S. Treasury debt obligations."

http://www.huffingtonpost.com/2011/07/13/us-downgrade-moodys-credit-rating_n_897661.html?utm_source=DailyBrief&utm_campaign=071411&utm_medium=email&utm_content=NewsEntry&utm_term=Daily%20Brief

Steny Hoyer On Debt Ceiling: Don't Expect A Single Vote Without Revenues 11JUL11

RIGHT ON!!!! Let this be an actual position by the Democrats and not posturing.....the repiglican,,s and tea-baggers demands to protect the wealthy and the corporate welfare system are immoral, rep eric cantor r VA would have been a good capo for the nazis, he would have gladly helped them fill their transports to the death camps, would have rounded up their possessions, their property, and all his fellow Jews and turned them over to the nazis just to save his own skin....just like he and sen joe lieberman I CT are doing now, They will find out their lust for wealth and power will be their downfall, and the rich and powerful they serve will toss them aside like filthy rags. From HuffPost...
WASHINGTON -- The Democratic House leader in charge of counting votes on legislation to raise the nation's debt ceiling warned on Monday that he couldn't guarantee a single vote from his party if revenues weren't part of the deal. His counterpart on the Republican side echoed that prediction if revenues were part of the deal.
House Minority Whip Steny Hoyer (D-MD) told attendees at a White House gathering that a Republican-pushed plan to slash more than $1.5 trillion in federal spending -- along with reforms to the entitlement program -- would likely have to pass with only GOP support.
"In the room, the Democrats made clear they couldn't get Democratic votes for such a cut-only package," said a Democratic official with knowledge of the exchange. "And that is relevant because everyone knows that Cantor and Boehner will bleed a significant number of their caucus before we even start the process. So anything that passes requires significant Democratic votes and the thing they laid out that didn't have revenues, that was all cuts, didn't meet the test... Democrats made clear there was no Democratic support for it."
A spokesman for Hoyer confirmed that the Maryland Democrat said he could guarantee "no Democratic votes on a package without revenues."
It was a rare show of firmness from a Democratic caucus that, at one point, insisted that a debt-ceiling bill should be clean of all legislative add-ons. But the show didn't go unmatched. Before Monday's meeting, House Majority Leader Eric Cantor tweeted that "there is no way the House will support a tax increase" as part of the debt reduction deal. At the meeting itself, he offered a deal that would cut $2 trillion over 10 years -- more than half of which would come from discretionary spending; $200 billion in mandatory spending and hundreds of billions from entitlement programs. Taxes remained untouched.
And so it went for a little over an hour-and-a-half, as lawmakers met for the second time in as many days without inching any closer to an agreement. A GOP aide familiar with negotiations said most of Monday's meeting centered on picking up the discussions left over from Vice President Joseph Biden's now-defunct bipartisan deficit group -- though Obama did press for lawmakers to consider a bigger deal. When the topic turned to specifics, the exchanges grew more testy, including what one GOP aide called a "notable exchange" between Obama and Speaker John Boehner (R-Ohio).
"Entitlement cuts aren't easy for us to vote for either," Boehner told Obama, according to the aide. "Our guys aren't cheerleading about cutting entitlements."
Obama responded, "Your guys already voted for them" -- referring to House Republicans passing a budget package that revamps Medicare.
"Excuse us for trying to lead," responded Boehner, at which point the president moved onto a different topic, the aide said.
A top Democratic official briefed on the exchange acknowledged that there was, indeed, "more real disagreement coming out" on Monday than during the day prior. In addition to the Boehner-Obama dustup, Cantor proposed $350 billion in Medicare and Medicaid cuts that would, among other things, include $53 billion from "Medigap" coverage, $50 billion in increased co-payments for nursing home and homecare, $38 billion from new means testing and $16 billion in higher co-pays for lab tests. Rep. Cantor's spokeswoman Laena Fallon told HuffPost the suggestion was nothing more than what lawmakers had discussed during earlier Biden meetings, but Democrats said he was filling in the blanks. The president, regardless, dismissed the ideas as "disproportionate."
"The president stressed... [that] he did not understand how he could go to the American people consistent with his values and say it was okay to have proposals that would ask moderate-income seniors to be bearing $500 or more of additional costs when you couldn't, at the same time, ask that even the most well off Americans bear an extra five dollars in contribution to getting the deficit down," said a Democratic official briefed on the exchange.
"'No revenues' is not a serious position," said another Democratic official. "There is not a person in town not named [anti-tax zealot] Grover Norquist who will tell you that is a serious position."
How lawmakers will get over this philosophical gap is not readily apparent. The president has called them all back for a meeting on Tuesday at 3:45 p.m. The directives, however, were almost identical to what the White House had issued the night before.
"There was not movement [today]," said one Democratic official close to the talks. "But then again, the president, what he was really asking of people in the room... was to make clear we are going to come back again tomorrow and people should talk to their caucuses and among themselves about what the path to a meaningful deficit reduction plan was that can pass both houses."

Partisan divide on debt talks growing deeper; Obama says he won’t accept stopgap plan 11JUL11

THE repiglicans and tea-baggers are determined to destroy this country. They are willing to sacrifice the national economy to protect the rich and corporate America's welfare system. Their arrogance and greed is disgusting. PRESIDENT OBAMA AND THE DEMOCRATS MUST STAND FIRM AND NOT GIVE IN TO THE REPIGLICANS AND TEA-BAGGERS. WE WILL NOT TOLERATE GIVING INTO THEIR IMMORAL DEMANDS! From the Washington Post...

By Lori Montgomery

Talks between President Obama and congressional Republicans grew increasingly contentious on Monday, as GOP leaders flatly rejected his call to raise taxes on the wealthy as part of a bipartisan agreement to restrain the nation’s mounting debt.
Dueling news conferences by Obama and House Speaker John A. Boehner (R-Ohio) served as a testy prelude to an afternoon bargaining session that only emphasized the partisan divide, according to people on both sides with knowledge of the closed-door discussions.
During the meeting, Obama challenged Boehner to buck the anti-tax hard-liners in his party who, the president suggested, are blocking the path to a landmark compromise to reduce borrowing by as much as $4 trillion over the next decade. Boehner and House Majority Leader Eric Cantor (R-Va.) responded by urging Democrats to settle for a more modest reductions-only deal that would save $2.4 trillion but would not touch tax breaks for the nation’s richest households.
In addition to major cuts to domestic agencies, the House GOP proposal calls for slicing about $250 billion from Medicare over the next decade by asking well-off seniors to pay more for health coverage, placing new restrictions on Medigap policies and putting in place new co-payments and cost-sharing provisions for home health care, among other changes. Those reductions would come on top of about $500 billion in Medicare savings previously enacted as part of Obama’s overhaul of the health-care system — cuts Republicans blasted during last fall’s midterm campaign. 
Obama rejected the GOP plan, said a Democratic official familiar with the discussions, arguing that he could not ask “moderate-income seniors to bear $500 or more of additional costs when you couldn’t ask the most well-off American to give an extra $5 to getting the deficit down.”
At a White House news conference hours earlier, a clearly exasperated Obama said he has “bent over backward” to meet Republican demands for sharp cuts in government spending, citing his offer to trim Social Security and Medicare benefits — an offer that has drawn howls from liberal Democrats. That offer included raising the Medicare eligibility age, said the official, who spoke on the condition of anonymity to discuss the talks.
Unless Republicans are willing to make the same ideological concession on taxes, he said, “I do not see a path to a deal.”
“We keep on talking about this stuff and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it,” Obama said. “I’m prepared to take significant heat from my party to get something done. And I expect the other side should be willing to do the same thing.”
Republicans fired back that they already are taking plenty of heat for considering an increase in the legal limit on the debt, which stands at a record $14.3 trillion. In a sign of deepening tensions, Boehner suggested that the only concession Obama should expect from Republicans is a vote to allow the Treasury to continue borrowing.
“Most Americans would say that a ‘balanced’ approach is a simple one: The administration gets its debt-limit increase and the American people get their spending cuts and their reforms,” Boehner told reporters at a news conference before heading to the White House. “Adding tax increases to the equation doesn’t balance anything.”
Obama and Boehner took pains to express their admiration for each other, but the prickly rhetoric suggested that hope has faded for a far-ranging $4 trillion agreement. After a friendly game of golf and three weeks of secret talks, the two had hoped to forge a historic deal to tackle the biggest drivers of the debt, including cuts to health-care and retirement programs, military spending and an inefficient tax code.
Boehner blew up those talks last weekend, citing irreconcilable differences with the White House over taxes and the magnitude of structural changes to entitlement programs. “I want to get there,” he said Monday. “But it takes two to tango, and they’re not there yet.”
That sent negotiators back to the drawing board with just three weeks until Aug. 2, when the government risks defaulting on its obligations without additional borrowing authority. Lawmakers in both parties have refused to raise the debt limit without a plan to restrain the debt in the future.
Obama, Vice President Biden and the top two leaders of each party in the House and the Senate are racing to draft such a package by July 22, to leave enough time for what is likely to be a difficult sales pitch to their respective rank and file. Negotiators agreed to meet again Tuesday afternoon, and Obama said they will meet daily — including through the weekend, if necessary — to seal a deal.
Monday’s meeting focused on the only apparent alternative to what many have taken to calling the “grand bargain”: A $2.4 trillion package that was under discussion in earlier talks led by Biden.
Cantor, a party to the Biden talks, said the group was tantalizingly close to its target, which would be big enough to permit House Republicans to agree to an increase in the debt limit sufficient to pay the government’s bills until well after the 2012 election.
But Democrats, and some Senate Republicans, said the consensus was closer to $1.5 trillion — and that assumed an agreement to raise taxes on wealthy households that the GOP was unwilling to make.
“When Republicans say, ‘Let’s just go back to the Biden talks,’ it’s important to remember, they walked out of the Biden talks,” said Rep. Chris Van Hollen (D-Md.).
Some Republicans have raised the prospect of a short-term deal. But Obama emphatically rejected that option Monday, saying he would not sign “a 30-day or a 60-day or a 90-day extension.”
A deal is only “going to get harder” as the election approaches, Obama said. “So we might as well do it now. Pull off the Band-Aid. Eat our peas.
“If not now, when?”

Obama Offered To Raise Medicare Eligibility Age As Part Of Grand Debt Deal 11JUL11

SO it begins, Obama's caving to the gop / tea-baggers greed, sacrificing the elderly to protect the rich and corporate welfare....stay tuned America, invest in vaseline and BOHICA!!!!!
WASHINGTON -- In his press conference on Monday morning, President Barack Obama repeatedly insisted that he was willing to tackle some sacred cows as part of a larger package to raise the debt ceiling. Just how sacred, however, may surprise political observers.
According to five separate sources with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.
The proposal, as discussed, would not go into effect immediately, but rather would be implemented down the road (likely in 2013). The age at which people would be eligible for Medicare benefits would be raised incrementally, not in one fell swoop.
Sources offered varied accounts regarding the seriousness with which the president had discussed raising the Medicare eligibility age. As the White House is fond of saying, nothing is agreed to until everything is agreed to. And with Republicans having turned down a "grand" deal on the debt ceiling -- which would have included $3 trillion in spending cuts, including entitlement reforms, in exchange for up to $1 trillion in revenues -- it is unclear whether the proposal remains alive.
"That is one of the things they put on the table as part of a big solution," said one senior Republican Hill aide.
"It was considered in the context of the big deal," added a top Democratic source briefed on the deliberations.
Multiple efforts to get comment from the White House were unsuccessful. That said, the president made his willingness to put entitlements on the table and incur the wrath of his base a focal point of his Monday press conference.
"We keep on talking about this stuff and we have these high-minded pronouncements about how we've got to get control of the deficit and how we owe it to our children and our grandchildren," said Obama. "Well, let's step up. Let's do it. I'm prepared to do it. I'm prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing -- if they mean what they say that this is important."
A proposal to raise the eligibility age for Medicare -- which was part of a budget plan put forth by Sens. Joseph Lieberman (I-Conn) and Tom Coburn (R-Okla.) -- would face steep opposition from within the Democratic Party. The amount of money it would save is also relatively small, as the vast majority of Medicare funding is spent on more elderly populations. The Congressional Budget Office has estimated that if the Medicare eligibility age was increased from 65 to 67, the federal government would save $124.8 billion between 2014 and 2021.
Obama's willingness to embrace the idea, however, was seen as a major bargaining chip that could help win concessions from Republicans on revenues.
The frameworks of the deal were as follows: In exchange for raising the Medicare retirement age (in addition to other entitlement reforms and cuts that together would add up to $3 trillion), GOP leadership would sign off on $800 billion to $1 trillion in revenue raisers. Those increases, however, would only come in 2013. Republicans would have their choice of poison too. Either they could craft and pass a sweeping package of tax reforms that would result in $800 billion to $1 trillion in revenue increases, or they would be forced to de-couple the Bush era tax cuts, allowing those for people making above $250,000 to expire.
The idea, as one Democratic source with knowledge of the discussions put it, was to give House Speaker John Boehner (R-Ohio) both an "out" and an "incentive." He would be able to go back to his caucus and say he had prevented an immediate tax increase and, potentially, the elimination of some of the Bush tax cuts. He would also be able to argue that he had created the proper conditions for tax reform. In order to ensure that he followed through, however, the prospect of the upper-end rates rising loomed in the near future.
"If the likes of [Senate Minority Leader Mitch] McConnell and others were blocking tax reform in a way that made up the $800 billion or so that needed to be actualized, Democrats would have that as a fallback if nothing happened at the end of 2012," explained the source.
The deal fell apart, in part, because Democrats demanded an upfront commitment from Republicans that they would allow the Bush-era tax cuts to be decoupled, rather than a commitment to revisit the issue at the end of 2013. According to a GOP official, that demand was interpreted as a way to simply drag out negotiations on comprehensive tax reform, as Democratic leadership would know full well that they had the fallback option of allowing taxes on upper income Americans to revert to pre-Bush rates.
Ryan Grim contributed reporting.

Obama Aide On Social Security Cut Story: It 'Overshoots The Runway' 7JUL11

SOCIAL SECURITY CAN NOT BE PART OF THE BUDGET CEILING NEGOTIATIONS, THE PROGRAM IS NOT PART OF THE FEDERAL DEBT PROBLEM! President Obama and the Democratic Party will find themselves in dire straits if they dare give in to the greed of the gop and tea-baggers and raise the retirement age or cut benefits to the poor, working class and middle class. Means testing for Social Security is acceptable only if applied to the wealthy who also receive Social Security. The only change in funding of the program that should be implemented is lifting the cap on Social Security taxes on the wealthy so all income is subject to the tax. From HuffPost.....
WASHINGTON -- The Obama administration is pushing back against a Wednesday night report that the president is prepared to offer cuts to Social Security as part of a deal to raise the debt ceiling.
"The story overshoots the runway," said a senior administration official. "The President said in the State of the Union that he wanted a bipartisan process to strengthen Social Security in a balanced way that preserves the promise of the program and doesn't slash benefits."
"While it is definitely not a driver of the deficit," the official added, "it does need to be strengthened."
The response, sent via email to The Huffington Post, provides a measure of assurance to Democrats who were taken aback by the abrupt news, broken by the Washington Post, that Social Security reform was now on the debt-ceiling table. Still, the devil is in the details, and the idea of "strengthening" the entitlement program remains the vague standard for reform.
Making Social Security means tested, for instance, could be pitched as a way to improve the program's solvency, even if doing so would drastically undermine its founding purpose, as some experts warn.
There are also several smaller alterations that have been proposed. Last week, advocates expressed concern over news that lawmakers were considering changes to the way the government calculates the rate of growth for benefits people receive.
Confusing the debate even more are the political implications of putting Social Security or any other entitlement reform at the heart of debt-ceiling negotiations. Democrats believe they can use Republicans' votes for a Medicare voucher program earlier this spring as a potent political weapon. But by signing off on cuts of their own -- the thinking goes -- Democrats would lose any political advantage they've gained by saying they are protecting Medicare while the GOP is trying to fundamentally change or do away with the program.

Social Security Poll: Cutting Benefits An Electoral Minefield 28JUN11

SOCIAL SECURITY must not be part of the budget talks to reduce the deficit or raise the federal debt ceiling. Social Security is not part of the debt problem, the greed of the wealthy and corporate America and the lack of moral courage of our "leadership" in D.C. is to blame. Democrats take note, the American people will not support you in 2012 if you cave in to the gop and tea-baggers who want to destroy the Social Security system. Politicians who turn their backs on the majority of the American people still struggling through this recession will be punished in the next election. 
According to a set of new surveys conducted in several key swing states by groups in favor of protecting Social Security, making changes to the program as part of a deal to reduce the federal budget deficit is widely opposed by independents and voters who say they're undecided on whom to support in the 2012 election, the key constituents that politicians court during election season. The vast majority of voters -- including independents and Republicans -- said they'd prefer raising taxes on the wealthy to shore up Social Security, a position that has few adherents in Congress.
The new polls, from Social Security Works, The Alliance for Retired Americans and the National Committee To Preserve Social Security and Medicare, show that 74 percent of likely 2012 voters in Florida, Minnesota, Missouri, Virginia and Colorado say they would oppose cutting Social Security benefits in order to reduce the federal budget deficit. That opposition is fairly consistent across the five states, ranging from 71 percent opposed in Colorado to 78 percent opposed in Missouri.
In the new polls, the results that could be of greatest political import show that 72 percent of independents in the combined surveys and 77 percent of those who say they are undecided in 2012's U.S. Senate race (or the race for U.S. Congress in Colorado, where there are no Senate seats up for election next cycle) also oppose cuts to Social Security benefits.
Although respondents' views on Social Security seem to match better with those of Democratic lawmakers, the polls do contain some bad news for Democrats: Republicans hold an edge in questions about who would better handle Social Security. Combined respondents from the five states surveyed favored congressional Republicans over congressional Democrats on the issue by a 29 percent to 27 percent margin, and congressional Republicans over President Barack Obama by a 32 percent to 28 percent margin.
Republicans' edge on the issue appears to come largely from political independents, who favored Republicans in Congress over Democrats in Congress by a 4 percentage point margin and Republicans in Congress over the president by a 5 percentage point margin. Similarly, undecided voters in their states' contests for U.S. Senate (or for the U.S. House, in the case of Colorado voters) gave Republicans a 3 percentage point advantage over Obama, though they favored Republicans over Democrats in Congress by only a 1 percentage point margin, well within the survey's margin of error.
How is it that voters don't want Social Security cuts but simultaneously think that the program will be better protected by Republicans, who publicly insist on such cuts? Part of the answer likely lies with Republican-leaning independents in the poll, who can be counted on to support Republicans in general, despite the specific question at hand.
According to the Pew Research Center's recently released Political Typology Report, which analyzed characteristics of like-minded groups across the political spectrum, one key group that largely identifies as independents but typically leans toward the Republican Party, dubbed the Disaffecteds, was especially opposed to making changes to Social Security and Medicare as a way to reduce the budget deficit. Only 15 percent of Disaffecteds said they would favor cutting entitlements rather than cutting defense spending or other domestic programs, the lowest of any group analyzed by Pew Research -- including groups comprised mainly of Democrats.

Democratic leaders in Congress have expressed an openness to Social Security cuts, although it is unclear whether that is influencing how much independents trust Democrats on the issue, or whether Americans are even aware of the particulars of politicians' positions on the issue. In addition, other polls have found greater trust for Democrats on managing the program, suggesting that some of those who said they were undecided on the new polls might lean towards supporting Democrats on Social Security if pressed.
Respondents to the new polls were largely opposed to several more specific changes to the Social Security program. Fifty-nine percent opposed raising the retirement age to 69 years old, 57 percent opposed changing the formula to reduce cost of living benefits for beneficiaries and 60 percent opposed means-testing to reduce benefits for those making more than $60,000 a year. Opposition to the proposal varies slightly by state, but does not drop below 55 percent for any of these proposals in any of the states polled.
On the other hand, the polls found broad agreement with a proposal to apply the Social Security tax to annual wages above the current cut off of $106,800 -- 70 percent of combined respondents supported that change. The majority of Republicans and Tea Party supporters also favored lifting the taxable amount.
This preference for raising taxes over cutting Social Security benefits is confirmed by other national polls. A May poll by the Pew Research Center found 59 percent of adult respondents disapproved of plans to raise the age when people can begin receiving retirement benefits, while 67 percent approved of making more of high-earners' income subject to the payroll tax. Fifty-four percent of respondents to that poll said they would oppose reducing Social Security benefits for seniors with higher incomes.
However, a March Washington Post/ABC News poll found adult respondents opposed to decreasing the rate at which Social Security benefits increase by a narrower margin (3 percentage points) than the new polls.
The new polls also found support for a proposal not to extend tax cuts for the wealthiest Americans that will expire in 2012 and instead re-purpose the revenue generated to pay for the Social Security program. That result is particularly unsurprising since most Americans supported ending those cuts the last time they were extended, even when the funds generated would not be used to pay for the popular Social Security program.
While these surveys were sponsored by an interest group opposed to reductions in Social Security benefits, the broad conclusions they reached are similar to other national polls. For example, an AP/GfK poll conducted in May found that 59 percent of U.S. adults said that the budget could be balanced without cutting Social Security, while 39 percent said that Social Security would need to be cut. A USA Today/Gallup poll in April found that 65 percent of adults were worried that Rep. Paul Ryan's (R-Wis.) budget plan would cut Social Security too much.
The new polls were conducted by the Democratic firm Lake Research Partners. Respondents were selected from a voter list. In total, the surveys interviewed 2,694 respondents. The combined results for the surveys have a margin of error of 1.9 percentage points.
The surveys in Colorado, Florida, and Missouri each had about 500 respondents and margins of error of 4.4 percentage points. The Minnesota survey had 584 respondents and a margin of error of 4.1 percentage points, and the Virginia survey had 603 respondents and a margin of error of 4 percent.

TELL PRES OBAMA NO COMPROMISE ON MEDICARE! from MOVEON.ORG

PRES OBAMA has to show some backbone and take a stand against the gop and tea-bagger plans for the destruction of Medicare. The budget deficit problem can be addressed by ending the wars in Iraq and Afghanistan and allowing the bush era tax cuts for the wealthy to expire. Medicare can not be part of any compromise. Click the link to sign the petition from MoveOn.org....

Click here to sign your name: "President Obama: If you stand up to the Republican hostage-takers and protect Medicare, we willhave your back." Sign the Petition!

President Obama has to decide whether he's going to save Medicare—or whether Republicans will once again get their way by holding the economy hostage.

Democrats in Congress have already taken a strong stand against making any Medicare cuts, but so far the White House has been silent on whether it's willing to compromise with the Republicans' extreme demands.¹

Let's send President Obama a message: if he stands up to the Republican hostage takers, we'll have his back.

We're aiming to get 150,000 signaturesbefore we deliver this petition to the White House. Can you add your name?

Republicans have had a lot of success taking the economy hostage and demanding a conservative ideological ransom. And they're at it again—this time over the debt ceiling, which ensures the government doesn't default on its debt.

Normally, this vote is routine, but this time, Republicans are digging in their heels—refusing to vote for the debt ceiling increase—unless their plan to eliminate Medicare is passed.²

But the sand is shifting under the Republicans' feet. They lost in the recent New York special election, which was all about Medicare.³ And their Medicare destruction plan is bombing at the polls.⁴

The one thing Democrats could do right now to let the Republicans back in the game would be to agree to Medicare cuts. Not only would it betray all the people who rely on Medicare (and all of us who will in the future), it would neutralize any political advantage the Democrats have gained this past month.

Nancy Pelosi is standing strong in the House against any cuts to Medicare.⁵ But the only way to protect Medicare from Republican attacks is for President Obama to take Medicare cuts off the table during negotiations over raising the debt ceiling.

Can you tell President Obama you'll have his back if he stands strong and doesn't let the Republicans hold the economy hostage to force cuts to Medicare? Click here to sign:

http://pol.moveon.org/pac/medicarehostagel/?r_by=27848-17549061-07eaz7x&rc=medicarehostage_letter.email_cp.g0

Thanks for all you do.

–Daniel, Joan, Wes, Michael, and the rest of the team

Source:

1. "James Clyburn: For Dems, Medicare benefits cuts must be a `non-starter," The Washington Post, June 6, 2011
http://www.moveon.org/r?r=208970&id=27848-17549061-07eaz7x&t=5

2. "Debt Ceiling Debate Hinges On Medicare: Can Democrats And Republicans Make A Deal?" The Huffington Post, June 5, 2011 
http://www.moveon.org/r?r=208966&id=27848-17549061-07eaz7x&t=6

3. "New York Special Election: Medicare Will Be Issue Of 2012," The Huffington Post, May 24, 2011 
http://www.moveon.org/r?r=208967&id=27848-17549061-07eaz7x&t=7

4. "Poll: Big Majority Opposes GOP Medicare Plan," NPR, June 1, 2011 
http://www.moveon.org/r?r=208968&id=27848-17549061-07eaz7x&t=8

5. "Debt Ceiling Debate Hinges On Medicare: Can Democrats And Republicans Make A Deal?" The Huffington Post, June 5, 2011 
http://www.moveon.org/r?r=208966&id=27848-17549061-07eaz7x&t=9

Want to support our work? We're entirely funded by our 5 million members—no corporate contributions, no big checks from CEOs. And our tiny staff ensures that small contributions go a long way. Chip in here.