Category Archives: Deficit

“A Colossal Political Failure”

26 Tuesday Jul 2011

Posted by in budget, Deficit, economy, Politics, Taxes

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Sam Pizzigati at CAF:

“This “debt crisis” in no way had to happen. No natural disaster, no tsunami, has suddenly pounded the United States out of fiscal balance. We have simply suffered a colossal political failure. Our powers that be, by feeding the rich and their corporations one massive tax break after another, have thrown a monstrous monkey wrench into our national finances.

Some numbers — from an Institute for Policy Studies report released this past spring — can help us better visualize just how monumental this political failure has been.

If corporations and households taking in $1 million or more in income each year were now paying taxes at the same annual rates as they did back in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year.

In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.

Similarly stunning numbers have come, earlier this month, from MIT economist Peter Diamond and the University of California’s Emmanuel Saez, the world’s top authority on the incomes of the ultra-rich. These two scholars have shared some fascinating “what ifs” that dramatize how spectacularly the incomes of our wealthiest have soared over recent decades.

In 2007, Diamond and Saez point out, taxpayers in the nation’s top 1 percent actually paid, on average, 22.4 percent of their incomes in federal taxes. If  that actual tax burden were to about double to 43.5 percent, the top 1 percenter share of our national after-tax income would still be twice as high as the top 1 percent’s after-tax income share in 1970.

So why aren’t we taxing the rich? Why are we now suffering such fearsome “debt crisis” angst? Why are our politicos so intent on shoving the “fiscal discipline” of layoffs and cutbacks — austerity — down the throats of average Americans?

No mystery here. Our political system is failing to tax the rich because the rich have fortunes large enough to buy off the political system.”

Schumer Backs Reid Plan

25 Monday Jul 2011

Posted by in budget, Deficit, economy, Politics

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AP is reporting:

“The third ranking Democrat in the Senate says a deficit-reduction proposal put forward by Majority Leader Harry Reid has the best chance of ending the political stalemate and avoiding a government default.

New York Sen. Chuck Schumer tells MSNBC he expects the Nevada Democrat to release details of his plan later Monday. Schumer says the deal would last through 2012, cut spending by the same amount as borrowing is increased and contain no new taxes.”

Which is exactly what Boehner wanted from jump street. The Daily Caller, May 11:

“Boehner took the ambitious stand in negotiations to raise America’s debt ceiling while speaking to the Economic Club of New York, saying, “Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase. And the cuts should be greater than the accompanying increase in debt authority the president is given.”

While the Treasury Department has yet to specify exactly the size of the increase Congress will need to approve for the $14.3 trillion debt limit, estimates are currently settling in around $2 trillion. That means, according to Speaker Boehner, that the White House and congressional Democrats would have to agree to spending cuts equal to at least $2 trillion as well. The only thing “off the table” is tax increases, said Boehner.

So after 6 weeks of kabuki, we’re right back where all this began. And unemployment is still our biggest problem. Nice.

Remember the Public Option

22 Friday Jul 2011

Posted by in budget, Deficit, health care, Obama, Politics

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Shortly after the New York Times broke the story yesterday that a so-called “grand bargain” (which if reports are accurate is neither grand nor much of a bargain) had been reached between President Obama and Speaker Boehner, White House spokesmen immediately sprang into action. Press Secretary Jay Carney said “there is no deal, we’re not close to a deal” and Dan Pfeiffer tweeted:

“Anyone reporting a $3 trillion deal without revenues is incorrect. POTUS believes we need a balanced approach that includes revenues.”

The Times account may or may not be true, we shall see in the next few days I suspect, but reading a post at AMERICAblog this morning reminded me of previous occasions when the White House kinda sorta fudged a bit on the truth, to be generous.

Like when the same Dan Pfeiffer said in October of 2009 that the rumors about President Obama abandoning the public option as part of health care reform were “absolutely false” and that:

“In his September 9th address to Congress, President Obama made clear that he supports the public option because it has the potential to play an essential role in holding insurance companies accountable through choice and competition.  That continues to be the President’s position.”  

It was later revealed that in July the president had made a secret deal with hospital lobbyists that a public option would not be included in the final legislation. In March of 2010 Paul Hogarth at Huffington Post wrote:

“In other words, while Obama was still saying in September that he supports the public option (which kept us hopeful) – the President knew all along that it would never make it in the final bill. He never said he’d fight to include the public option, and repeatedly said he was “open” to other ways to achieve the same goal. But little did we know, the fix was in.”

I also recall that there was a similar situation with the pharmaceutical industry. The president continued to voice support for drug importation after another secret deal had already been cut with lobbyists that it wouldn’t be in the final legislation either.

FWIW.

Obama Has Been Consistent on Social Security—He Wants to Cut It

08 Friday Jul 2011

Posted by in Deficit, Obama, Politics, Social Security

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After the news broke yesterday about President Obama putting Social Security cuts on the table in the debt ceiling talks, the White House immediately went into CYA mode:

“White House spokesman Jay Carney commented on the reports concerning Social Security cuts Thursday morning.

“There is no news here,” Carney said. “The President has always said that while social security is not a major driver of the deficit, we do need to strengthen the program and the President said in the State of the Union Address that he wanted to work with both parties to do so in a balanced way that preserves the promise of the program and doesn’t slash benefits.”

Carney is right about one thing, there is no news here. The president has been consistent in his plans to “strengthen” and “preserve” Social Security. Like appointing Alan Simpson and Erskine Bowles co-chairs of the so-called Debt Commission, which turned much of its focus to cutting strengthening Social Security by raising the retirement age (a benefit cut) and re-figuring the COLA (another cut). Never mind that SS has nothing to do with either the debt or the deficit. Simpson has made no secret of his contempt for Social Security and its recipients:

“I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ’em too…We’ve reached a point now where it’s like a milk cow with 310 million tits!”

And it was Erskine Bowles who, while serving as Bill Clinton’s Chief of Staff in 1997, was in the process of negotiating a deal with then-Speaker Newt Gingrich which included the partial privatization of Social Security before the Monica Lewinsky scandal broke and blew (so to speak) that out of the water.

Nothing new to see here. Move along.

The Deficit Reduction Dog and Pony Show, Cont’d

05 Tuesday Jul 2011

Posted by in Deficit, economy, Obama, Politics, Taxes

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Further proof that the deficit reduction talk in DC is just a dog and pony show:

“In a Wednesday news conference, the president especially pounded a depreciation provision for corporate jets, mentioning it six times.

“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys,” Obama said. “I don’t think that’s real radical. I think the majority of Americans agree with that.”

But as it turns out, ending the jet tax break would only save around $3 billion over a decade, while rolling back tax expenditures for oil-and-gas would bring in roughly $21 billion and a proposal aimed at hedge fund managers would collect some $15 billion over that same time span.

According to estimates from last year, ending the Bush tax cuts for income over $250,000 for couples would have brought an extra $700 billion into the Treasury.”

If they were serous about reducing the deficit they would, as Willie Sutton once said, go where the money is. But where the money is is also where the large campaign contributions is, so that ends that.