Jul 22nd, 2011 at 10:41 am by susie
Here’s an update from Ezra Klein this morning:
What set off yesterday’s debt-deal panic among congressional Democrats wasn’t so much information about a new deal as a better understanding of the old deal. What Boehner and Obama appear to be discussing is the $4 trillion deal they were discussing a few weeks ago. In that deal, $1.5 trillion in immediate cuts would be followed by processes for making a further $1.5 trillion in deeper cuts — many of them to entitlement programs — and reforming the tax code to raise a trillion more dollars than it does now. The plan would also include some sort of enforcement mechanism that would make sure the future spending cuts and tax increases manifested.
Congressional Democrats spent much of yesterday complaining that this plan doesn’t really have revenues while the White House spent much of yesterday swearing that it did. On this, congressional Democrats are mostly right. The revenue in this plan is approximately equal to the revenue from letting the Bush tax cuts on the rich expire — which is something Democrats could do with zero Republican votes in 2012, when the Bush tax cuts are set to expire automatically. In other words, Democrats are demanding, as part of this deal, that Republicans agree to let them do…something they could do even if Republicans refused to agree to it.
The best way to understand the revenue in this plan, in fact, is that it’s a concession to Republicans, not Democrats. It effectively takes the 2012 expiration of the Bush tax cuts and all of the leverage that gives Democrats off the table, but doesn’t ask for more revenue in return. Rather, there’s about 25 percent as much revenue in this plan as there is in simply doing nothing and letting the Bush tax cuts expire, and half as much revenue in this plan as in the Simpson-Bowles/Gang of Six plans recommended, and this plan also gives up Democrats ability to go for more revenue in 2012 when the Bush tax cuts expire. See this graph/post for a clearer comparison.
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Jul 22nd, 2011 at 10:16 am by susie
That I’m leaving for vacation tomorrow, and that the usual motley cast of characters will be picking up the slack in my absence. I probably won’t have internet access, although you never know.
But I plan to spend an entire week trying to forget that a Democratic president is trying to dismantle the safety net, because it feels like my head is ready to explode.
For God’s sake, don’t break anything while I’m gone. And no keggers!
Jul 22nd, 2011 at 9:58 am by susie
Huge terrorist attack in Oslo on the building housing the PM and political offices. Hundreds feared dead. Details when I get them.
UPDATE: One dead, several injured.
Jul 22nd, 2011 at 9:12 am by susie
There are so many ways the corporations (by way of the Republican party) are attacking us lately that I literally can’t absorb all of it — like this, where the Republicans are trying to remove worker assistance aid from these trade agreements. (Whatever happened to jobs, jobs, jobs?)
No matter how complicated an issue is, you can pretty much assume that if the Republicans and the Chamber support something, there’s a time bomb for workers in there somewhere.
Jul 22nd, 2011 at 8:54 am by susie
Economist Dean Baker on the Gang of Six and their plans to cut Social Security:
The elderly cost of living index that shows they experience a higher rate of inflation is an experimental index, not a full price index like the other indexes calculated by BLS. However, it could be a full index if the Gang of Six and the rest of Congress wanted it to be. In other words, if the Gang of Six is really interested in a more accurate cost of living adjustment for Social Security, they can propose legislation that would direct BLS to construct a full elderly index. This would let them know whether it is necessary to raise, lower, or leave along the annual cost of living adjustment, to ensure that Social Security checks keep pace with the cost of living.
However the Gang of Six shows no interest in going this route. The only possible conclusion is that the Gang of Six is scared of what a full elderly index might show. In short, the gang of six is scared of the information. They obviously have made the decision to cut Social Security and they are not going to let evidence stand in the way.
Jul 22nd, 2011 at 8:34 am by Brendan
Neither party is blameless for the decisions that led to this debt, but both parties have a responsibility to come together and solve the problem. That’s what the American people expect of us. Every day, families are figuring out how to stretch their paychecks a little further, sacrifice what they can’t afford, and budget only for what’s truly important. It’s time for Washington to do the same.
Actually, one party IS fairly blameless here: there’s a reason they’re called the Bush tax cuts and the Bush wars. This false equivalence is a crock of shit, and the president knows it.
But what really annoys me is this whole “Washington needs to tighten its belt just like American families.” Bullshit: if you want to talk about the need to “budget for what’s truly important”, you need to jettison those tax cuts the President extended a few months ago, and invest in jobs. And THAT, my friend, means deficit spending, just sensible deficit spending.
American families, when they need something out of reach, ALWAYS spends beyond its means. That’s what a home equity loan is. That’s what credit cards are for. Sometimes this kind of deficit spending is stupid, like when a person uses a home equity loan to go on a big vacation. But often this kind of deficit spending is quite well-advised, like when I refinanced my house to make some repairs (improving the value of my home for resale) and to pay off some high-interest credit card debt (dramatically lowering the interest rate I was paying, and improving my cashflow).
But Obama wants to “go big” on a debt deal. But he had the chance to do that a few months ago, and instead knuckled under to the Republicans, extending the Bush tax cuts. You wanna go big? END THE WARS AND END THE TAX CUTS.
It’s a revenue problem, not a spending problem. And the president surely knows this.
Jul 22nd, 2011 at 7:49 am by susie
Jul 22nd, 2011 at 7:38 am by susie
Jul 22nd, 2011 at 7:33 am by susie
Jul 22nd, 2011 at 6:51 am by susie