Right now, according to the sequester $1.2 trillion in spending cuts are set to take place if nothing happens. Half of that would come from defense. Of course, this is the real problem because there’s no way the defense contractors are going to allow that. Whenever people in Washington complain about spending cuts they mean spending cuts that would affect defense contractors. They want to massively increase spending cuts everywhere else in the budget.
President Obama has proposed that the Grand Bargain include $4 trillion in savings. He has said over and over again that the ratio would be $3 in spending cuts to $1 in tax increases. This is before his legendarily disastrous negotiating begins. So, let’s do some quick math. According to the president’s own plan that would be $3 trillion in spending cuts, which is significantly higher than the current plan of $1.2 trillion in spending cuts.
Let me add one other fact, if all you do is let the Bush tax cuts expire for people making over $250,000, you would already have $1 trillion in tax increases. And we were told because of this election that was already non-negotiable. That’s what we fought to make sure would happen and the president has guaranteed it. So, what exactly do progressives gain out of this Grand Bargain?
The reality is that this is cost shifting. They are going to move the spending cuts away from defense and on to the middle class and poor by hacking away at Medicare and Medicaid. This is defined as courageous in Washington. What a load of crap. What would be courageous is taking on the rich and the powerful and the large political donors, which is the exact opposite of what’s going to happen.
President Obama has already promised corporate tax cuts (from 35 percent to 28 percent). Think about that. Why are we doing tax cuts if we are trying to reduce the deficit? The administration tells us not to worry because they will close some loopholes and make it revenue neutral. But wait a minute, I thought the whole point was not to make it revenue neutral. I thought we were trying to raise revenue.
There’s a good chance they’ll pull this same kind of crap on income taxes, after all, if they wanted to raise a trillion in revenue all they would have to do is do nothing. Once the Bush tax cuts expire, you re-instate the middle class tax cuts and voila, you’re done. That way, you don’t have to give up anything in return!
Yet, the White House is planning to give up at least $3 trillion in spending cuts anyway. If you were progressive, if you cared about the middle class, if you were honest, why in the world would you do that? The reality is that this robbery is indefensible and my math here is irrefutable, that’s why they will do this deal as quickly as possible. The more people think about it, the more they have a chance to get enraged. The Democrats and Republicans have to agree to this deal in the lame duck session before the public realizes their pocket has been picked.
No bargain
Uygur is right on all counts. And as long as we allow Capitalists to run this country the situation that we find ourselves in today will repeat itself over and over again. If you don’t think so just read some American history. Now a few words about Bill Press and Current TV. Current bills itself as a “liberal media outlet.” Really? Bill Press of “The Bill Press Show” is no liberal. He’s a right-leaning centerist like Jennifer Granholm, Eliot Spitzer and their boss Al Gore. Stephanie Miller is slightly left-of-center while Cenk Uygur is an establishment Leftist. To say that Current TV as a “liberal media outlet” is absurd.
Obama’s default, opening gambit is total, instant and abject capitulation to Wall Street and then he works backwards from there.
What IF? Suppose we started to call Congress and tell them “a deal’s a deal, we’ll take it as is.” The upper class gets a tax increase. So do we in the middle. We are back to 1999. There is an AMT problem at the upper end of the middle which caused all these cuts in the first place. There is a tax increase on lower incomes but the EITC offsets some of that and that was targetted for cuts. There is a projected revenue surge which can be used to lower the sequester. Demand that the reduction be across the board. The deal contained no cuts to entitlements (there was after all an election pending). What I am driving at is the stalemate condition is better than any alternative out there. If they come to an accomodation on softening cuts, a recession could be avoided. (If they can’t, it’s coming anyways.)