Once more since arriving on Capitol Hill, the new Republican dominated House of Representatives and the newly reinforced Republican Senate minority has equivocated on the topic of spending cuts. By now we are all well aware that the Republicans have abandoned the goal of cutting $100 billion dollars this fiscal year and likewise, they have failed to produce a pro rata spending reduction plan to address that shortened year. We all remember that taxes, debt reduction and spending cuts were in the forefront of the Republican agenda for the 2010 elections as these headlines from conservative sources show: "Tax, Spending Cuts Top GOP Campaign-year 'Pledge" or "Tax, spending cuts lead Republican campaign manifesto" Needless to say, You get the idea.
Okay so what then happened to all of the bold talk about taking on entitlements and spending? When faced with having to answer that question on national television Mitch McConnell echoed the reluctance that Speaker of the House John Boehner had previously stated. As if by magic, Senate Minority Leader Mitch McConnell appearing on "Meet the Press" danced around the question that Republicans seemed obviously reluctant to come out with bold measures to tackle deficit spending as the following exchange between Senator McConnell and host David Gregory reveals:
"MR. GREGORY: Well, that's very interesting because I've also detected a great deal of caution on the part of Republicans who, who campaigned on the idea of spending cuts. And yet, when it comes to a program like Social Security--it was Speaker Boehner who told a group of us this week, "Well, look, we need to spend more time defining the problem before we get in the boat with the president here and say that we've got to make long-term changes." Is that your view?
SEN. McCONNELL: Well, look, we have, we have two problems here. It's our annual deficit, completely out of control. We're going to send the president a lot less--we're going to allow him to sign onto a lot less spending than he recommended the other night and that he's likely to send us in the budget. Then with, with regard to long-term unfunded liabilities, the entitlements, Speaker Boehner's correct, you cannot do that on a partisan basis. President Bush tried doing that in 2005 with regard to Social Security's problems. And by the way, the announcement this week that Social Security's gone into deficit, it will run a $45 billion deficit this year and for as far as the eye can see. Look, entitlement reform can only be done on a bipartisan basis. It's happened before. Reagan and Tip O'Neill fixed Social Security in '83. Reagan and the Democratic House did tax reform in '86.
MR. GREGORY: So, but if the president were to say, "OK, Leader McConnell, if, if you're prepared to deal with some revenue increases, we can also deal with some benefit cuts. Let's take a balanced approach to Social Security," you could support that?
SEN. McCONNELL: Look, you know, you've tried this before. I, I'm not going to negotiate the deal with David Gregory. I'd be happy to negotiate it...
MR. GREGORY: I keep hoping you'll change your mind.
SEN. McCONNELL: I'd be happy to try to negotiate the deal, and Speaker Boehner would too, with the president and the vice president and others.
MR. GREGORY: But does the president have to go first before you'll take on entitlement reform?
SEN. McCONNELL: We have to go together. We have to go together. The American people are asking us to tackle these problems. I think the president needs to be more bold. We're prepared to meet--I've got a lot of new members, and Speaker Boehner does as well, who came here to tackle this big problem. We were waiting...
MR. GREGORY: But you're saying, "Be bold on entitlements and Republicans will meet you halfway"?
SEN. McCONNELL: We're happy to sit down and talk about entitlement reform with the president. We know Social Security is in trouble. It was just announced by CBO this week. We know Medicare is on an unsustained path. They took a half a trillion dollars out of it to fund this healthcare program that they enacted. Look, we need to get serious about this."
As the above commentary reveals, what we have before us is a Republican leadership cadre that has already deviated from the rhetoric of the campaign trail by putting the ball in Barack Obama's court by stressing that it is the duty of the President to come up with "bold" proposals on deficit and spending reduction as per Senator McConnell's commentary above. But wasn't that what the Republicans ran on in the first place? For all of the rhetoric of 2010 can't they showcase their own bold ideas on "Meet the Press", America's premier Sunday morning political talk show? Likewise, Speaker Boehner's comment that Republicans "need to spend more time defining the problem" also seems to ring hollow, coming from a guy who on this very show said before the 2010 elections that the G.O.P. had spent the past last year listening to "the American people."
Correct me if I'm wrong but didn't the Republicans present themselves as the people who had this problem figured out and who knew what to do to get this country back on the right track, which oddly enough they got us off of in the first place when they squandered a trillion dollar plus surplus and launched two wars while cutting taxes, a historical first for the United States? They had the opportunity to put that surplus into the Social Security system or to use it to pay down the national debt as they were advised to do by Alan Greenspan, yet they chose to do otherwise. Now when elected to produce bold public policy to address our fiscal problems they plead for "more time" and look a president much maligned by them for "bold" proposals!
What's also semi-comical is Mr. McConnell's new found affinity for bipartisan cooperation. Isn't it a bit curious that they very guy who said it was his goal to see that Barack Obama be a one term president, now openly solicits the President's support and cooperation? Is this borne of a realization that the Republicans can't possibly meet their agenda alone? Is this a maneuver concocted to throw a curve ball at the Tea Party crowd as there has been little beyond rhetoric on the part of the G.O.P. when it comes to deficit reduction specifics? We've all heard about Congressman Paul Ryan's "Roadmap for America" yet it's a document that few in the Republican Party had signed onto in the run up to 2010.
In the final analysis it seems that the bold rhetoric of the campaign trail has now faded in the harsh winter of political reality. Hence the old adage, "talk is cheap." Now that they are in a position of power in Washington, the Republicans will have to finally translate their rhetoric into policy, thus far they have done little but dance around the tough issues and meet tough questions with clever rhetorical replies. How long will that last before their constituents hit the streets and demand some form of accountability from those who went to Washington to turn back the tide of Obama "the Socialist."
In Quick Hits, The Big Hurt calls attention to a question in a 60 Minutes/Vanity Fair poll.
First, from CBS comes a graph of the topline results:
Then, from vanityfair.com comes the breakdown by income:
To balance the federal budget, which of the
following would be the first step you would take?
TOTAL <$50K* $50K-$100K >$100K
Increase taxes on
the wealthy 61% 67% 58% 46%
Cut defense spending 20 20 22 20
Cut Medicare 4 2 5 10
Cut Social Security 3 1 5 6
* Mislabeled >50K in the original.
The results are hardly surprising, as polls have gotten similar results in the past. Indeed, the General Social Survey has long showed that very few people want to cut Medicare or Social Security, while a great number want to increase spending--but this is not the case for military spending. Even after 9/11, most people remained more supportive of Medicare and Social Security spending than they were of military spending. (See tables & charts & brief discussion on the flip.)
But look a little more closely at the internals. Overall, cutting military spending is five times more popular than cutting Medicare. Among those making less than 50K, it's ten times more popular. But among those making over 100K, it's only twice as popular. Once you get into the stratospheric income levels of K-Street lobbyists and others in the influence biz, it's a good bet that the difference vanishes entirely--and that's even before anyone gets paid to advocate for anything.
Some have suggested that Medicare should be means-tested in order to save money. But these polls show that there's already a sharp income-based difference in levels of support as things stand today. Add in means-testing, so that those making over 100K get nothing out of Medicare themselves--or even just substantially less--and the levels of support would certainly erode even further, thus making it even easier for Congress to act against the wishes of the broad majority of the American people.
On the flip: A set of tables & charts, showing just how upside-down the Versailles consensus is from what the American people want.
This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:
Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America's long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
Employment taxes, by contrast-the regressive bit of the fiscal structure-are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don't pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
There aren't any wealth taxes, but the closest thing we've got-estate and gift taxes-have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we're fiscally doomed.
We need not have been doomed had Barack Obama (a) understood this simple situation coming in, and (b) had the least bit of inclination to take on the ogilopolies in particular (especially high finance, the medical-industrial complex, the military-industrial complex and the fossil fuel industry), and selfish super-rich in general. The fact that such a candidate with such a message of unity to face and solve our problems could be elected should not be forgotten or ignored simply because he turned out to be such a spectacular disappointment. The American people still have the will for national greatness in them. It's the leadership that's wanting.
But tax structure isn't the only problem. There's also the problem of employment, of jobs, which brings us to this chart:
Weekly Audit: Your Vote, Your Economy-Why Today's Election Matters to Your Pocketbook
by Lindsay Beyerstein, Media Consortium blogger
Election Day is finally here, and control of the House and the Senate hangs in the balance. The differences between parties could not be more stark. Republicans have promised to repeal health care reform and slash government spending for social programs, all while preserving tax cuts for the wealthiest Americans. Some of the more radical ideas bandied about this election season-by conservative candidates with a decent shot at winning-include privatizing social security and eliminating the Department of Education.
This is the sixth part of a series of posts giving recommendations on California's propositions. This post recommends a "no" vote on Proposition 26, which requires a two-thirds majority in the legislature to pass some fees.
Proposition 27 will be the subject of the next post and last in this series.
Trying to Understand What Proposition 26 Does
Proposition 26 is a complex and tricky piece of proposed legislation, with a number of subtleties. On its surface it sounds like a standard conservative proposal against higher taxes, and in a way Proposition 26 indeed fits this definition. But to just label Proposition 26 as a classic tax-cutting proposition is to somewhat misunderstand it's purpose.
Proposition 26 has several parts, and each are quite complex. The first part deals with the difference between taxes and fees.
This is the fourth part of a series of posts giving recommendations on California's propositions. This post recommends a "no" vote on Proposition 24, which repeals three corporate tax breaks.
Proposition 25 will be the subject of the next post in this series.
Tax Breaks and Proposition 24
When California passed its annual budget, legislators included three tax breaks for businesses: a tax break involving single sales factor apportionment, a tax break involving financial losses, and a tax break involving tax credit transfers.
Quite frankly, there is not much of a choice here: if you don't vote, you will condemn us to changes in our country that will be hard to live with and harder to overcome in the future.
For instance, Republican Senate candidates Linda McMahon in Connecticut, Rand Paul in Kentucky, John Raese in West Virginia, and Dino Rossi in Washington have all pledged to roll back or eliminate the minimum wage.
Sharron Angle in Nevada, Ken Buck in Colorado, and Pat Toomey in Pennsylvania have all talked about privatizing Social Security - or eliminating it altogether.
This month, Congress is tasked with deciding how to address the Bush Tax Cuts (passed in 2001) that are due to expire in December. Public opinion seems to be in favor of keeping the tax cuts for the middle class, although there is less consensus around whether high-income households earning more than $250,000 a year should enjoy the same tax cuts. With the economy at top of mind, and deficit reduction hotly debated by pundits, the tax cut debate could shape up to be important for the midterm election.
With more and more Beltway types predicting that Dems may put off the vote over the Bush tax cuts until after the election, I thought it would be useful to pull together all the polling that shows this is an argument Dems have a rather good shot at, you know, winning if they decide to go for it.
Polls cited:
National Journal: 56% support ending all the Bush tax cuts or just those for the wealthy.
Gallup: 59% support ending all the Bush tax cuts or just those for the wealthy.
CNN: 51% supports ending tax cuts for the wealthy; another 18 percent favor ending them all.
CBS: 56% supports ending tax cuts for the wealthy.
Newsweek: 52% supports ending tax cuts for the wealthy.
After which he says:
Yet for all this polling, there are increasing signs that some Dems are not gung-ho for this fight. As best as I can tell, the worry is that if Republicans hammer marginal Dems for favoring a tax hike in the middle of a bad economy, Dems will not be able to cut through the noise and get across the point that the Obama proposal only ends the tax cuts for the rich, while extending them for everyone else....
But here's the point: Amid a sea of bad polling news, here is an issue where the public is clearly on Dems' side. And the above polling suggests that the public already has a pretty firm grasp on the "nuance" of this debate. This, of all things, is not an issue where Dems should conclude in advance -- as they often do -- that once Republicans go on the attack, it's game over and Dems can't possibly win the argument.
I think Gregg is missing the reason the Democrats are doing this. It's not that they think the people are against it. They see the numbers. They are afraid of even having a conversation in which the subject is raised. The logic is that if the word "taxes" even come up in the debate at all, Democrats will lose.
This is, by the way, the same logic that took the death penalty and gun control permanently off the agenda. It's what they would like to do with abortion rights as well and are making great strides in doing. Except on the margins, national security is run by bipartisan consensus.
I don't think Greg misunderstands. I think he's doing his level best to help counter the very fear that digby points to. "Don't worry," Greg is saying, "The word 'taxes' isn't toxic. You can say it, and yet still live."
This is the most fact of politics in our time: the basis of conservative politics is fear. The basis of liberal politics is reason. The conservative try to flood the zone with fear, so that people can't think straight. Hence, when all else failed and they failed to defeat Truman in 1948, they turned to blind unreasoning fear with McCarthyism in the 1950 midterms.
That didn't kill support for the New Deal, but it did create an opening, and the GOP briefly gained power in the Congress along with electing Eisenhower in 1952. Then, a decade later, when the Dems aligned nationally with Civil Rights, the GOP had a permanent fear-button to push, and they've never stopped using it ever since.
The issues digby cites are more recent examples, but they are all part of the same pattern. If the GOP can turn anything into a flashpoint of fear, then they can keep on repeating it, and all thought shuts down--perhaps not for everyone, but for enough. But for them to be really secure, they need the Democrats to buy into their logic as well. Once the Democrats are gripped with fear, and unwilling to talk about a given issue, then that issue belongs to the GOP. Their position on it doesn't have to make any sense. Making sense is beside the point. The point is scaring people. The point is, in a word, terrorism.
I'll have a lot more to say in another diary later on, but this much I can't wait on. John Ralston reports the latest from Sharon Angle, except that it's actually a couple of months old, and it's really crazy:
Angle: "What's happening (in America)..is a violation of the 1st Commandment," entitlements "make government our God."
By Jon Ralston · August 4, 2010 · 6:58 AM
That's what Sharron Angle, the GOP nominee for the U.S. Senate, said in an April 21 interview with TruNews Christian Radio's Rick Wiles. I have obtained audio of the interview, previously unnoticed, which contains some startling rhetoric from the candidate who has said running for office was a calling from God. But in this interview, she goes much further:
"And these programs that you mentioned -- that Obama has going with Reid and Pelosi pushing them forward -- are all entitlement programs built to make government our God. And that's really what's happening in this country is a violation of the First Commandment. We have become a country entrenched in idolatry, and that idolatry is the dependency upon our government. We're supposed to depend upon God for our protection and our provision and for our daily bread, not for our government."
There are so many levels and different kinds of crazy mixed in here, that it's enough to make your head spin. So just to get things started with light little foretaste, I want to skim off some of the lighter stuff, to wit:
Angle: .... You know, this is a war of ideology, a war of thoughts and of faith. And we need people to really stand for faith and trust, not hope and change.
Wiles: Then I saw the report the other day that 47 percent of the American public will pay no income tax in this country this year. This explains the divide.
Angle: Yes.
Wiles: Half of the country is working to produce and pay the taxes and pay the bills, the other half is living off the taxpayers -- they're living off the other 51 percent.
Angle: We're right to that point in the graph where it says, "government dependency." And we know that once we have a majority that are dependent upon the government, we will lose our freedom; it says we go into bondage.
Four points, expanded on the flip:
(1) When the income tax was first instituted, less than 1% of the population paid income tax. So if that's the measure of "dependency", we're much less dependent than we were in the good old days.
(2) The largest entitlement programs--Social Security and Medicare--aren't paid for out of income taxes, they're paid for out of payroll taxes--which are lower for rich people as a percentage of their income than they are for the rest of us.
(3) While federal taxes are somewhat progressive, because of the income tax, state taxes tend to be regressive--those who make the least money pay the highest rates--sometimes by enormous margins.
(4) On the state level, conservative Red states are net tax recipients from the federal government. Blue states are net donors.
In short, this is just one strand of Angle's whack-a-doo narrative, but it's utterly and totally unrelated to reality.
I have been arguing for a long time that progressives need to be aggressively engaged in the deficit cutting debate. I think it is a mistake for us, both policy wise and especially politically, to say that deficits don't matter, or to have an entirely defensive message about the cuts we don't want Congress to make. Voters believe deficits matter, and they want solutions - and while it is currently unpopular to cut Social Security and some other programs (thank goodness), if no alternative to that is presented, too many folks might be convinced to go along.
The progressive message on the deficit has to be very clear: first, don't do anything that will endanger our economic recovery, because the best way to solve the deficit is to improve our economic health (see: the 1990s). Secondly, when you ask for sacrifices, they shouldn't be all or mostly from the middle class and poor. This is a pretty key point, since many of the deficit hawks seem to be zeroing in on cuts in Social Security and a Value Added Tax, both of which overwhelmingly impact the poor and middle class far more than they do the wealthy.
What these proposals are is an attempt to make middle and lower income people pay for the sins of the wealthy who have benefited from the deficit. Middle class incomes have been stagnant over the last decade, while the costs of their groceries, gas, utilities, and college education for their kids has skyrocketed. Middle class housing prices have plummeted the last three years, with foreclosures and bankruptcies increasing exponentially. Middle class folks haven't gotten the big tax cuts the wealthy have over the last 10 years, and when taxes are raised at the local level, its almost always regressive taxes like the sales tax that impact poor and middle class people the most. Meanwhile, public school teachers, social services for the poor, parks, libraries, community colleges, programs to help handicapped kids - all of those programs that matter to working families are the things that get cut.
So now we have this gaping federal deficit. (More in extended entry)
Yesterday was the President's Deficit Commission and today is the Peterson summit. The very serious people (who didn't know there was a housing bubble) are telling us that our own government providing benefits to our people is baaaad and very unserious. (Military spending? What's that?)
So what about that deficit, and the Social Security crisis? Always, always keep in mind that the whole bruhaha over Social Security comes out of a strategic plan to get rid of it. As Paul pointed out in his post and as I have written about,
This strategy goes back to a larger Wall Street effort to get rid of Social Security. A 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of Heritage lays it out for us. The document is still available at Cato, and select quotes are available at Plotting Privatization? from Z Magazine. ...
[quotes from the Cato strategy document]
... Every time you hear that "Social Security is going broke" you are hearing a manufactured propaganda point. Every time you hear that "Social Security is a Ponzi scheme" you are hearing a manufactured propaganda point. Every time you hear that "Social Security won't be there for me anyway" " you are hearing a manufactured propaganda point.
Don't fall for it. If they can gut Social Security they stand to make a lot of money but you stand to lose your retirement.
AND never forget that the deficit was also manufactured on purpose, to defund government's ability to regulate business and protect citizens, and to force a shrinking of what the corporate right calls "big government." Government is We, the People making the decisions for ourselves, "big government" is We, the People making more decisions for ourselves. The only alternative is the wealthy and big corporations making the decisions for us instead. Don't fall for it. We didn't have deficits until we cut taxes on the rich.
Today, tea partiers will be protesting the lowest tax rates in decades. Here are federal income taxes as a share of total taxes for the median family of four over the past few decades:
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
Taxes have been cut--for almost everyone. They are at historic lows. This is probably a contributing factor to why only 20% of the country think the share of taxes they have to pay is "unfair."
But the protests will still dominate political news coverage today. Hopefully, this broader context will get some airtime, too.
Hoyer: we are going to do it as soon as we have "CBO numbers we have confidence in" "saturday and sunday are possibilities"
This would seem to confirm the rumors that the CBO score hasn't been released yet because it doesn't reduce the deficit enough.
Democrats will have to continue to change the bill until they can get an acceptable score, but time is running out. Since they need three days from the release of the CBO score to the vote, and since Sunday is the last day they can vote, that mean tomorrow night is the absolute latest the score can be released. So, they need to find ways to make the bill reduce the deficit more, and they need to do it in 24 hours.
It would seem that the White House is looking to increase the excise tax as a means of placating the CBO. Ben Smith reports that AFL-CIO chair Richard Trumka has been summoned to the White House to discuss:
AFL-CIO President Richard Trumka is headed into a meeting with President Obama this afternoon after the White House and Congressional leaders have begun to discuss a higher-than-expected excise tax on some health care plans, in order to maintain their claim that health care legislation will reduce the deficit, a source involved in health care talks said.
It was actually the demand to reduce the excise tax that forced the current plan for the House to pass the Senate bill, and then fix that bill through a reconciliation "sidecar." With the backing of labor, House Democrats of all stripes stood together very strongly on this, torpedoing attempts to just pass the Senate bill unchanged, or attempts to try a smaller bill (or series of smaller bills).
Demanding massive concessions on the excise tax was the actual "Progressive Block" in the negotiations, behind the scenes. With further concessions being demanded on that front, it will take the blessing of Trumka to make the deal work. And so, he has been summoned to the White House.
Of course, including a public option would solve the problems Democrats are currently facing with the CBO, but hey, that was never part of the plan. Or really, even without a public option, you could still finance it by increasing tax rates on high-income households. But I guess a pound of flesh must always be taken from any left-wing group in order for any victory to be allowed.
(Was going to write something different, but think that this piece with Matt's original post (check out the entire piece at MyDD) and Rep. Pingree's project sum up what I think about tax day today. - promoted by Adam Bink)
One of my favorite posts by Matt Stoller back at MyDD was one in 2007 on April 15th- tax day- titled Paying for America, regarding how taxes are an investment in the public infrastructure of America. He writes:
Our tax code is the DNA of our nation's moral compass. I am proud to pay taxes because I take pride in America, and paying some tiny burden to keep our society running is an extremely small price to pay for being able to call myself an American citizen. The old expression 'you get what you pay for' is apt for all sorts of situations.
The Teabagger types- and often, the general public- view taxes and spending as wasteful "pork" (of course, only until Rep. Slaughter back home obtained money to improve the local farmer's market, in which case everybody thought, "oh, well, that's different..."). One of many problems is that there isn't much understanding of why the money is being spent, along with a lack of coverage around the project in other parts of a state or region.
During the No On 1 campaign, I had the pleasure of working closely with Karin Roland, the campaign's online director. She's now back working for Rep. Chellie Pingree (D-ME), and helped put together a cool transparency project on funding requests to Pingree's office. Every organization submitting a request is required to submit information and film a short video, which is posted on YouTube, explaining why the funding is important for Maine's first district. All of the requests are posted on Pingree's website with the sponsor's information listed and the amount requested, and people can leave comments. While members of the general public may find funding requests they think are wasteful, that may not always be a bad thing, and I think overall it will broaden the public's perception of the how and why of public investment, and perhaps build greater support.
Below are two examples- one funding request to address the shortage of physicians in rural Maine through scholarship funding, and one from the University of Maine to explore the potential of tidal power for renewable energy/jobs purposes.
Hopefully these kinds of projects result in greater public support for what Matt's talking about- paying for America.
STATE BLOGS
