Rumor central

Boehner rumored to resign as speaker at 5pm, possible coup by Cantor. Stay tuned!

UPDATE: Boehner’s office releases a statement denying it.

Congratulations!

If you make a shitload of money — or you’re close to the poverty line:

Sure, the “fiscal cliff” deal hikes taxes on the wealthiest, but it also raises taxes on the middle-class and working poor, primarily because the payroll tax holiday goes away. As such, some very well-off Americans end up faring pretty well under the deal.


The Tax Policy Center has totalled up all the tax changes under the bill and finds that two groups of Americans will have the lowest tax increase: Taxpayers with income between $200,000 and $500,000 and those with income between $10,000 and $20,000, both of whom will see their tax rate increase by 1 percentage point—a smaller hike than any other income group. Even those earning less than $10,000 will see a bigger 1.3 percentage point rate hike.

Progressive senators split on deal

Sen. Harkin was one of the senators who voted against the fiscal cliff deal, and took to the floor to denounce it Monday night. Which is nice and all, but for once, I’d like to see one of these progressive senators pull the procedural emergency brake and, you know, actually stop these things. There are several of them who get all kinds of favorable press (mostly because we’re so starved for anything resembling a progressive hero), but they never actually stop the things we wish they would.

Sen. Tom Harkin (D-Iowa) railed against the last-minute fiscal cliff deal, defending middle-class families and slamming Congress for being “tied in knots.”


“I’m disappointed to say that in my opinion, this legislation that we’re about to vote on falls short,” Harkin said. “First, it doesn’t address the number-one priority: creating good middle-class jobs now. Unemployment remains way too high. This bill should include direct assistance on job creation measures.”


Harkin also criticized those who want to “redefine the middle class as those making $400,00 a year when, in fact, that represents the top one percent of income earners in America.””The idea that people earning $300,000 to $400,000 a year could not pay the taxes they paid in the 1990’s, when the economy was booming, is just plain absurd,” Harkin said. “But that’s what we’re being told, that people who make $300,000 or $400,000 a year simply cannot pay the same taxes that they would have been paying in the Clinton years.”Harkin was one of eight senators to vote against the deal. Others included Mike Lee (R-Utah), Rand Paul (R-Ky.) and Marco Rubio (R-Fla.).HuffPost’s Jennifer Bendery and Sabrina Siddiqui reported earlier on details of the deal:

Under the deal brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.), Congress would permanently extend the Bush income tax cuts at $400,000 and below, keep the estate tax threshold at $5 million and extend unemployment benefits for one year.It would also temporarily delay the sequester — i.e., billions of dollars in across-the-board spending cuts — for another two months. The cost of continuing current spending levels will be paid for through an even mix of tax revenue increases and later spending cuts. Half of those cuts will come from defense spending; half will come from nondefense spending.

This deal is being railroaded through, with a heaping helping of created crisis in a lame duck session (just as I predicted). If only the Tea Party had stopped the train!

I certainly understand the plight of the long-term unemployed, and why people wanted to vote for those extensions. But we’re going to get screwed in many other ways when this deal goes through that I’d rather we went over the cliff. It’s not an ideal situation (hell, it was designed that way!) and it played on difficult emotions. Sen. Jeff Merkley, who really is a good guy, voted for the deal, saying:

“My measuring stick for this fiscal cliff deal, like every bill I consider, is how it will impact working families throughout Oregon. And while I have deep misgivings about the next steps, I have concluded that this deal is worth supporting.


“Without this bill, every family in Oregon would have seen its tax bills go up and our economy would have gone back into a recession. Without this bill, 30,000 unemployed Oregonians would have been cut off at the knees, without money to pay for food or rent as they look for work. And importantly, this bill protects the Medicare, Medicaid, and Social Security benefits our seniors depend on.


“Although it does not do as much as I want, this bill does ensure that the wealthy will be contributing more as we work to bring our deficits under control. I far prefer that choice to further cuts to education, law enforcement, and investments in the infrastructure our economy depends on.

What’s the future of the safety net?

The House vote will have happened by the time you read this, but no matter what happens, the Plum Line’s Greg Sargent really gets to the heart of the fight: What’s the future of the safety net?

One way to understand the fiscal cliff compromise which passed the Senate this morning is through the prism of the larger question at the heart of this whole fight: What should the safety net of the 21st century look like, and who should pay for it?


Presuming the Senate deal passes the House, what happened yesterday is that Democrats scored a victory on part two of that question — albeit only a partial one — while successfully deferring the epic, looming battle over the first part of it. Meanwhile, Republicans retained their leverage heading into round two, and thanks to the way things unfolded, they will likely walk into it more confident of winning major future concessions.


The good news is that for now, the basic social contract underlying the progressive reforms of the last century remains intact. Neither the rise in the Medicare eligibility age nor the Chained CPI for Social Security happened; Democrats have temporarily held off the GOP drive to cut the safety net. Meanwhile, Democrats finally broke the GOP’s opposition to the rich paying more in taxes — the party’s organizing principle for years now — successfully making the tax code somewhat more progressive. The short term big picture is that Dems won on two major fronts — no entitlements cuts, and tax hikes for the rich — which helps explain conservative rage over the deal.


So why are liberals also angry? Partly because this was only a partial Dem victory, since Dems agreed to a higher income threshold ($400,000 for individuals and $450,000) and made concessions on the estate tax. That didn’t have to happen, since doing nothing — and allowing the Bush tax cuts to expire — would have meant even more in revenues from the rich.


As Paul Krugman’s calculations show, this may not really have cost Dems all that much in new revenues. The more serious problem for liberals is what the outcome says about what comes next. Obama had repeatedly insisted he would not budge off his demand that taxes go up on all income over $250,000. That obviously didn’t happen. The risk is that this will set a bad precedent for the next round in this fight, in which Republicans will hold the debt ceiling hostage to extract the deep cuts to entitlements they want. It’s reasonable to worry that today’s outcome, by signaling Obama’s over-emphasis on getting a deal for its own sake, will set the stage for a cave later.


It’s on Obama to prove those worries unfounded. Obama has pledged to win more in new revenues from the rich via tax reform, has vowed not to agree to any deficit reduction that relies only on spending cuts, and continues to insist on a “balanced” approach. Only Obama, however, can ultimately define what he means by “balanced.” Liberals must continue to insist that this means that the sacrifice necessary to reducing the deficit will not borne by the poor or seniors who can’t afford it.

Some of us have been telling you for a very long time that Obama wants to be the Democratic president who erodes the safety net. There’s nothing as strong as a mobilized netroots to fight back — but the part we didn’t anticipate is that so many of you would refuse to believe it.

Well, I hope you believe it now. Obama is actually inviting a situation where he can be “forced” to cut Social Security and Medicare, under the self-created debt ceiling crisis. Why do I say self-created? Because Obama has other options. He can cite the 14th Amendment and simply ignore the House (the argument being that if Congress already appropriated an expenditure, the ability to execute debt to achieve it is inherent.

The other alternative is to order the creation of platinum coins. He’s not likely to do either, because (as people like me and Digby have been trying to tell you), he really does want to cut Social Security and Medicare.

So here’s what I’m saying. If we’re right, it’s important that, as Greg says, we are the ones who define what balance is; the poor and vulnerable are not the people who should be paying for this deficit hawkery, and you need to call your representative and tell them so. (As Amato just pointed out, we shouldn’t be playing this deficit reduction game in the first place.)

And if we’re wrong, you don’t lose a darned thing by calling your congress critters and raising holy hell. Just in case.

‘Now that Obama’s given away his leverage’

Notice what Cole is saying: Now that Obama has given away his leverage, Republicans can go after “entitlements” — meaning Medicare and Social Security benefits — during the debt ceiling and sequester negotiations. So it’s very important for us to keep up the pressure on Democrats and make sure they don’t take the bait:

Today on MSNBC, leading House Republican Rep. Tom Cole (R-OK) said that Obama’s tax deal — that extends tax cuts even for people making $30,000 a month and enacts a weaker estate tax than otherwise would’ve gone into law — has resulted in the President giving away all his leverage:

TOM COLE: Again, I would prefer not to raise taxes on anybody. But we protected almost every American. We did it at a higher income level than the President campaigned on. And again, frankly, we’ve denied him I think his most important piece of leverage in any negotiation going forward. So I particularly like that part. I understand unemployment extension. I prefer, you know, a more focused effort in that regard. But we do have parts of the country where that’s necessary and it’s a fair compromise.


The entitlement issue, just too much to deal with I think in one piece of legislation. But again, still sequester is in front of us. The continuing resolution runs out the end of March and obviously the debt ceiling. All of those things honestly are Republican leverage not Democratic so I think there will be opportunities to deal with the spending issue next year. Honestly I expect that will be the dominant issue along with trying to overhaul the tax code going forward. So that’s usually pretty good ground for Republicans.

President Obama is playing Br’er Rabbit to the Republicans’ Br’er Fox. “Oh please, please, Br’er Fox, don’t throw me in that briar patch!” If he ends up in a squeeze where the only deal Republicans will accept includes cuts to Social Security and Medicare, it’s because he wants to be there.

Trigger

The life of Willie Nelson’s guitar.

The guitar—a Martin N-20 classical, serial number 242830—was a gorgeous instrument, with a warm, sweet tone and a pretty “mellow yellow” coloring. The top was made of Sitka spruce, which came from the Pacific Northwest; the back and sides were Brazilian rosewood. The fretboard and bridge were ebony from Africa, and the neck was mahogany from the Amazon basin. The brass tuning pegs came from Germany. All of these components had been gathered in the Martin guitar factory in Nazareth, Pennsylvania, and cut, bent, and glued together, then lacquered, buffed, and polished. If the guitar had been shipped to New York or Chicago, it might have been purchased by a budding flamenco guitarist or a Segovia wannabe. Instead it was sent to a guitarist in Nashville named Shot Jackson, who repaired and sold guitars out of a shop near the Grand Ole Opry. In 1969 it was bought by a struggling country singer, a guy who had a pig farm, a failing marriage, and a crappy record deal.


Willie Nelson had a new guitar.

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