Saturday, September 24, 2011 7:30:57 AM
Obama turns fire on Republicans
Video [embedded]: Speaking from the White Hosue President Obama calls for $1.5 trillion in new revenue as part of a plan to find more than $3 trillion in budget savings over a decade.
Breaking down Obama’s debt plan
President Obama called for $1.5 trillion in new tax revenue as part of a plan to find more than $3 trillion in budget savings over a decade.
Sources: Office of Management and Budget, White House. Laura Stanton and Tobey/The Washington Post.
[ http://www.washingtonpost.com/business/economy/breaking-down-obamas-debt-plan/2011/09/19/gIQARsFyfK_graphic.html ]
By Dan Balz, Published: September 19, 2011
The deficit-reduction speech President Obama delivered from the Rose Garden [ http://www.washingtonpost.com/business/economy/obama-proposes-new-taxes-on-wealthy-for-half-of-debt-plan/2011/09/19/gIQATnkNfK_story.html ] on Monday underscores the sharp strategic pivot that he and his administration have made in the wake of the debt-ceiling negotiations.
Call it lessons learned the hard way, or a necessary readjustment by a politician, but the Obama who spoke on Monday was in a far different place politically and stylistically from the president who tried to pull off a grand bargain with House Speaker John A. Boehner (R-Ohio) in July and August.
Obama is a politician whose instinct often has been to find ways to entice or cajole both parties to produce cross-party consensus. Republicans would say he failed to do that on his stimulus and health-care measures, but Democrats regularly worry that he will give in too easily to get a deal.
On Monday, he continued a transition toward greater partisanship that began with his speech to a joint session of Congress [ http://www.washingtonpost.com/business/economy/obama-lays-out-447-billion-plan-to-boost-nations-economy/2011/09/08/gIQAk3ELDK_story.html ] two weeks ago. Rarely has this president been as blunt in his challenges to the other party as he was on Monday. Rarely has he been so willing to draw lines in the sand [ http://www.washingtonpost.com/blogs/the-fix/post/obama-throws-down-the-political-gauntlet-on-deficit-fight/2011/09/19/gIQA5YiQfK_blog.html ]. Rarely has he waved the threat of a veto [ http://www.washingtonpost.com/business/economy/obama-proposes-new-taxes-on-wealthy-for-half-of-debt-plan/2011/09/19/gIQATnkNfK_story.html?hpid=z1 ] with such emphasis.
Obama has gone from a president who talked openly about his willingness to rile his own party by making concessions on entitlements to get a debt deal with the Republicans to a politician determined to reconnect with his base as the two parties head into a new round of negotiations and an election campaign in which the stakes could not be higher.
Monday’s speech was another sign that many of the working assumptions Obama and his advisers took into the debt-ceiling talks have been replaced — some because of practical necessity but more fundamentally because of political necessities. Whatever hope the president had of coming out of the debt-ceiling debate with an enhanced image as the adult in the room, no matter what the final outcome, collided with the evidence that he and the Republicans both suffered political damage.
With his own political standing weakened [ http://www.washingtonpost.com/politics/obama-ratings-sink-to-new-lows-as-hope-fades/2011/09/05/gIQAIytZ5J_story.html ] and his base in near-revolt [ http://www.washingtonpost.com/politics/moveonorg-other-liberals-grapple-with-idea-of-supporting-obamas-reelection-campaign/2011/09/16/gIQAiePQaK_story.html ], the president may have had no choice other than to reappraise his economic and political strategies. Attempting to stay above the fray and appealing for at least a temporary cessation in the partisan wars in Washington was no longer an option.
Gone is any illusion that he and Boehner can really make a deal along the lines discussed during the summer — a deal that would take a serious bite out of entitlements, particularly Medicare, and include some new taxes. He no longer appears willing to antagonize his base. Instead, Obama is under pressure to produce a program that can create jobs and reassert his standing as the leader of the Democrats.
But with Boehner declaring taxes off the table [ http://www.washingtonpost.com/politics/boehner-says-no-new-taxes-for-debt-panel-in-economic-speech-on-thursday/2011/09/15/gIQAop9vUK_story.html ] in his speech last week, the president was left with little choice. He came back with his counterargument that the only fair way to reduce long-term deficits is with a combination of taxes and spending cuts — and not the kind of entitlement cuts he once was willing to consider.
Perhaps this is just a different opening bid, the terms of which could change if the negotiations inside the “supercommittee” in Congress look as if they are making genuine progress. But it seems less likely after the speech Monday.
With more force than at any time in his presidency, Obama pressed his argument of mutual sacrifice, with a significant share of it aimed at the wealthiest Americans. His call for an end to the Bush tax cuts for the wealthiest Americans and a millionaires’ tax (in the name of billionaire Warren Buffett) on top was greeted by charges of class warfare from his Republican critics. “This is not class warfare,” he said. “It’s math.”
If instant reactions are any indication, Obama’s speech helped reassure some in the Democratic family that he is one of them and that he will fight for the values they hold most dear. Daniel Mintz, the campaign director of MoveOn.org, an organization often at odds with the president, issued a statement of praise.
“For months, hundreds of thousands of members of the American Dream Movement have been urging Washington to focus on creating jobs and making our tax system work for all Americans, not just the super rich,” Mintz said. “Today, we’re glad to see this message reach the White House.”
This was a speech guaranteed to draw criticism from Republicans, and it came quickly. Senate Minority Leader Mitch McConnell (Ky.) offered this [ http://www.washingtonpost.com/blogs/2chambers/post/obamas-deficit-reduction-plan-reactions-from-capitol-hill/2011/09/19/gIQAv6XRfK_blog.html ]: “Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth — or even meaningful deficit reduction. The good news is that the Joint Committee is taking this issue far more seriously than the White House.”
It may be a measure of the president’s weakness that he has backed off significantly on changes in entitlements. He excluded Social Security from any changes in his new proposal, with administration officials arguing that it should be dealt with separately and apart from the current round of deficit-reduction talks.
More significant was his backing down on Medicare. During the negotiations with Boehner and Republicans, Obama was willing to agree to a rise in the Medicare eligibility age from 65 to 67. There was no mention of that Monday. Instead he returned to the kind of tough language he used in the spring when he took on House Budget Committee Chairman Paul Ryan’s budget and in particular Ryan’s proposed changes to Medicare.
Obama’s speech was obviously anything but a blueprint designed to produce bipartisan consensus. For now, those days are over. Instead, the president has decided he must win the battle for public opinion in the debate between his vision and that of the Republicans if he hopes to win a second term in office.
He believes the American people are with him on the broad outlines and values he espoused Monday. The campaign that began on Sept. 8 in the House chamber continued Monday in the Rose Garden, with a weakened president fighting to win that battle.
© 2011 The Washington Post
http://www.washingtonpost.com/politics/obama-turns-fire-on-republicans/2011/09/19/gIQAjJ3dfK_story.html [with comments]
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Obama Draws New Hard Line on Long-Term Debt Reduction
In remarks Monday in the Rose Garden, President Obama vowed, “We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”
Doug Mills/The New York Times
By JACKIE CALMES
Published: September 19, 2011
WASHINGTON — With a scrappy unveiling of his formula to rein in the nation’s mounting debt, President Obama confirmed Monday that he had entered a new, more combative phase of his presidency, one likely to last until next year’s election as he battles for a second term.
Faced with falling poll numbers for his leadership and an anxious party base, Mr. Obama did not just propose but insisted that any long-term debt-reduction plan must not shave future Medicare benefits without also raising taxes on the wealthiest taxpayers and corporations.
He uncharacteristically backed up that stand with a veto threat, setting up a politically charged choice for anti-tax Republicans — protect the most affluent or compromise to attack deficits. Confident in the answers most voters would make, Mr. Obama plans to hammer on that choice through 2012, reflecting the fact that the White House has all but given up hopes of a “grand bargain” with Republicans to restore fiscal balance for years to come.
“I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share,” Mr. Obama said. “We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”
Mr. Obama also seems to have given up on his strategy of nearly a year, beginning when Republicans won control of the House last November, of being the eager-to-compromise “reasonable adult” — in the White House’s phrasing — in his relations with them. He had sought to build a personal relationship with Speaker John A. Boehner of Ohio, a man the White House saw as a possible partner across the aisle, in the hopes of making bipartisan progress and simultaneously winning points with independent voters who disdain partisanship. Even if the efforts produced few agreements with Republicans, the White House figured, independents would give Mr. Obama credit for trying.
Instead, the president was unable to close his deal with Mr. Boehner and has only lost independents’ support and left Democrats disillusioned, raising doubts about his re-election prospects.
So after his initial two years of dealing with an economic and financial crisis while pursuing an activist social agenda with Democrats in control of the House and Senate, and then a frustrating third year sharing power with Republicans, Mr. Obama now begins writing a third chapter for his final 15 months that is not the one he had in mind.
“It is fair to say we’ve entered a new phase,” said Dan Pfeiffer, Mr. Obama’s communications director. But he disputed what he called the conventional wisdom behind the president’s shift.
“The popular narrative is that we sought compromise in a quixotic quest for independent votes. We sought out compromise because a failure to get funding of the government last spring and then an extension of the debt ceiling in August would have been very bad for the economy and for the country,” Mr. Pfeiffer added. “We were in a position of legislative compromise by necessity. That phase is behind us.”
In this new phase, Mr. Obama must solidify support among Democrats by standing pat for progressive party principles, while trusting that a show of strong leadership for the policies he believes in will appeal to independents. Polls consistently suggest that perhaps the only thing that unites independents as much as their desire for compromise is their inclination toward leaders who signal strength by fighting for their beliefs.
“The president laid down a marker today that is true to his beliefs,” said Jacob J. Lew, director of Mr. Obama’s Office of Management and Budget. In response, Mr. Boehner said in a statement that Mr. Obama by his deficit-reduction plan “has not made a serious contribution” to the work of a bipartisan joint Congressional committee, which has two months to reach agreement on cutting deficits by at least $1.5 trillion in 10 years.
“The administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously,” Mr. Boehner said. “And it is evident today that these barriers remain.”
Mr. Obama’s plan to reduce annual deficits up to $4 trillion over a decade does call for subtracting $320 billion from Medicare and Medicaid, building on savings required in his health care law.
But those proposals are far from the overhaul and reductions that Republicans are demanding in the two popular entitlement programs, whose growth because of the aging of the population and ever-rising medical costs is driving the long-term projections of unsustainable debt.
And Mr. Obama removed Social Security from the table, as well as a proposal to slowly raise the eligibility age for Medicare to 67 from 65. He put both forward in July, to the chagrin of many Democrats, in private negotiations with Mr. Boehner that fell apart when the speaker balked at agreeing to higher revenues. Administration officials say Mr. Obama is not ruling out either proposal if Republicans were to show significant give on taxes.
But the White House does not expect Republicans to do so. Indeed, Mr. Obama’s new tack in pressing the deficit-reduction framework and $447 billion jobs-creation plan that he wants — not trimmed to draw Republicans’ votes — reflects the conclusion he has drawn from the past 10 months: Republicans will oppose almost anything he proposes, even tax cuts. And Mr. Boehner is unable to deliver his uncompromisingly anti-tax Republicans for any compromise that includes tax revenues.
Mr. Obama believed he had built a good working relationship with Mr. Boehner based on a shared desire for a deal modeled on proposals of past bipartisan panels, which called for a mix of new revenues and changes in entitlement programs.
But their relationship was severely strained after Mr. Boehner abandoned their budget talks in July, came back and then walked out a second time. And after what the White House saw as a third strike this month — Mr. Boehner’s humiliating public rejection of Mr. Obama’s requested date for an address to a joint session of Congress — the Obama team called Mr. Boehner out.
Their breach was evident in Mr. Obama’s remarks. He singled out Mr. Boehner in his criticism of Republicans as unwilling to compromise, a break from the past when Mr. Obama typically criticized Republicans in general but mentioned Mr. Boehner only to praise him as a constructive partner. Not this time.
“Unfortunately, the speaker walked away from a balanced package,” Mr. Obama said, referring to their earlier talks. “What we agreed to instead wasn’t all that grand.”
Then he mocked Mr. Boehner for a speech last week in which the speaker said only spending cuts could be part of a budget deal.
“So the speaker says we can’t have it ‘my way or the highway’ and then basically says, ‘My way — or the highway,’ ” Mr. Obama said. “That’s not smart. It’s not right.”
The president kept up his offensive even on Monday night, at a fund-raiser in Manhattan with wealthy donors from Wall Street.
“And you’re already hearing the moans and groans from the other side about how we are engaging in class warfare and we’re being too populist,” Mr. Obama said. But, he added, “if we don’t succeed, then I think that this country is going to go down a very perilous path. And it’s not going to be good for those of us who have done incredibly well in this society, and it’s certainly not going to be good for the single mom who’s working two shifts right now trying to support her family.”
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Related
Editorial: A Call for Fairness (September 20, 2011)
http://www.nytimes.com/2011/09/20/opinion/a-call-for-fairness.html
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© 2011 The New York Times Company
http://www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html [ http://www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html?pagewanted=all ] [comments at http://community.nytimes.com/comments/www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html ]
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Why Obama got tough
By Ezra Klein
First published Sep 21 2011 01:01AM
Updated Sep 21, 2011 01:35PM
President Obama’s deficit-reduction plan is most interesting for what’s not in it. It does not cut Social Security by chaining the program’s cost-of-living increases. It does not raise the eligibility age for Medicare from 65 to 67. Nor does it include any other major concessions to Republicans. Rather, the major concession it makes is to political reality — a reality that the White House has been trying to deny for almost a year now.
Since the election, the Obama administration’s political theory has been that its first-best outcome is striking a deal with House Speaker John A. Boehner, R-Ohio, and its second-best outcome is showing it genuinely wanted to strike a deal with Boehner. Heads the administration is making Washington work, tails Republicans get blamed for stopping Washington from working.
That thinking led the White House to reward the GOP’s debt-ceiling brinkmanship by offering Boehner a “grand bargain” that cut Social Security, raised the Medicare age and included less new revenue than even the bipartisan Gang of Six had called for. You can see why it was seductive to this administration: It fit perfectly with Obama’s brand as a post-partisan uniter and his personal preferences for campaigning on achievements rather than against his opponents. But though it came close to happening, the “grand bargain” ultimately fell apart. Twice.
The collapse of that deal taught the White House two things: Boehner doesn’t have the support within his caucus to strike a grand bargain, and the American people don’t give points for effort.
The administration was initially pleased to see news reports detailing its willingness to compromise and polls showing that the American people thought the GOP was far more intransigent. It figured it was winning. It figured wrong.
Voters, Obama and his team learned, aren’t interested in compromises that don’t lead to results. Polls showed that Obama looked like the nice guy, and that kept him personally popular. But he also looked like an ineffectual leader, and that caused his job approval ratings to dip below 40 percent in some polls.
Perhaps the final and most conclusive evidence that the strategy had failed came last week, when Democrats lost special elections in Nevada and New York. Both seats were winnable. Both were lost to Republican candidates who focused most of their fire on the president. It was a far cry from New York’s special election in May, when Democrat Kathy Hochul picked up a Republican-leaning seat by hammering her opponent’s support for Rep. Paul Ryan’s Medicare-slashing budget.
The White House could have picked up Hochul’s message back in May and stuck to it throughout the debt-ceiling fight. It didn’t. The truth is, it didn’t want to. The president doesn’t think of himself as that kind of Democrat. He has been clear in his belief that there are sensible cuts that can be made to both Medicare and Social Security. He would like to win by governing effectively, by cutting deals with the other party, by making Washington work. He has never shown any interest in a generic Democratic campaign hammering Republicans for being willing to cut Medicare even as they cut taxes on the rich.
Over the past few months, he gave what Sarah Palin might call “the hopey-changey thing” a shot. It failed. The administration thought it had to choose between running a campaign based on changing Washington — even if some of its allies didn’t like it — and running a more traditionally Democratic race. Now White House officials realize that they have to decide between losing because they can’t change Washington and trying something else.
The new theory goes something like this: The first-best outcome is still striking a grand bargain with the Republicans, but it’s more likely to happen if the Republicans worry that Democrats have found a clear, popular message that might win them the election. The better Obama looks in the polls, the more interested Republicans will become in a compromise that takes some of the Democrats’ most potent attacks off the table.
The second-best outcome isn’t necessarily looking like the most reasonable guy in the room. It’s looking like the strongest leader in the room. That’s why Obama, somewhat unusually for him, attached a veto threat to his deficit plan: If the supercommittee sends him a package that cuts benefits for Medicare beneficiaries but leaves the rich untouched, he says he’ll kick it back to Congress. Rather than emphasizing his willingness to meet Boehner’s bottom lines, which was the communications strategy during the debt ceiling showdown, he’s emphasizing his unwillingness to bend on his bottom lines.
That isn’t how the White House would prefer to govern. It’s not how it would prefer to campaign. It is, let’s admit it, politics-as-usual. It’s the triumph of the old way of doing things, an admission that Washington proved too hard to change. But it’s also the only option that Obama has left.
Copyright 2011 The Salt Lake Tribune
http://www.sltrib.com/sltrib/opinion/52614330-82/obama-washington-medicare-republicans.html.csp [no comments yet]
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A Tax Others Embrace, U.S. Opposes
By DAVID KOCIENIEWSKI
Published: September 20, 2011
President Obama’s proposal for a new tax on millionaires echoes a call in many countries struggling with budget deficits and overwhelming debts to make the wealthy pay more.
Britain and France have imposed new taxes on their highest earners — and Italy, Spain, Greece and Japan are considering similar moves, despite some protests.
Whether the taxes on the rich in Europe raise enough money to close much of their budget shortfalls, they are being promoted as a step toward economic fairness at a time when governments are cutting spending on social programs like pensions, health care and education. Mr. Obama — whose millionaire’s tax would probably raise a modest amount of revenue over the next 10 years by collecting more from several hundred thousand Americans — has also framed his plan as a way to make the system more equitable.
Specifically, the proposal would counteract decades of tax reductions for most Americans that have given the wealthy the most benefit.
But the idea being embraced by much of the world faces strong opposition in the United States from Republicans and other conservatives who say it would harm the economy and cost jobs.
“Other countries explicitly use the tax system to redistribute resources in society,” said Reuven S. Avi-Yonah, a professor at the University of Michigan and expert in international tax law. “But going all the way back to no taxation without representation, Americans have had a mistrust of government. So we tolerate a greater inequality in terms of wealth. There is more opposition to tax increases, even when rates are low. And there is less confidence that government will use the money wisely.”
Still, there are some indications that Americans may be more open to tax increases on the affluent. One recent poll by The Associated Press and CNBC found that Americans feel they are less likely to become millionaires, making them more willing to embrace a tax on that group.
The initiative also echoes a populist chord sounded by Warren E. Buffett, the billionaire investor who has publicly complained that the American tax system allows him and some other wealthy individuals to pay a lower percentage of their income in federal taxes than their secretaries do.
Whether a higher tax rate would stifle business and economic growth continues to be debated. Britain raised its top tax rate to 50 percent after the 2008 financial crisis, and a number of economists and others have said that it inhibited investment and hiring. They are asking that the issue be reconsidered if the additional money generated proves less than projected.
Spain, Greece and Italy have less room to maneuver. They are under external pressure to raise tax rates and reduce spending to help meet targets for debts and deficits imposed on all members of the euro zone. To continue to raise money in the international financial markets, these countries have taken a number of steps painful for their citizens. Adding a 3 percent “solidarity tax” on the wealthy, as Italy is considering, reminds the voters that everyone is sharing the pain.
Until the recent financial crisis and worldwide economic downturn, individual tax rates had fallen substantially in most developed countries over several decades. In 1980, the top federal rate on Americans was 70 percent, and most European countries were above 60 percent. Today most European countries have rates below 50 percent. The United States has a top rate of 35 percent, but many wealthy Americans pay considerably less because their earnings are derived from dividends or capital gains, which are taxed at no more than 15 percent.
As a result, the effective federal tax rate, including payroll taxes, for the wealthiest 0.01 percent of earners fell to 31.5 percent in 2005, from 42.9 percent in 1979, according to data from the Congressional Budget Office. Over the same time, effective rates for taxpayers in the center of the range fell to 14.2 percent, a decrease of just 4 percentage points.
Mr. Buffett said he paid 17.4 percent of his income in federal income and payroll taxes last year. His secretary and the 19 other employees in his office paid an average of 36 percent, he said.
For all the opposition, what the president is proposing would affect a small group. About 450,000 of the 144 million returns filed last year had taxable income over $1 million, the administration said. The “Buffett Rule,” as the administration calls it, would affect only the subset with a lower effective tax rate than middle-class families. Mr. Obama has not said what rate he would consider appropriate or how much revenue it would raise.
Recent Treasury Department data gives a more detailed look at the group of taxpayers the administration is aiming at. In 2009, 238,000 households filed returns with adjusted gross incomes of at least $1 million. One-quarter of them paid an effective federal income tax rate of less than 15 percent, the data shows, and 1,470 paid no federal income tax at all.
“It’s a guiding principle,” said Jason Furman, principal deputy director of the National Economic Council. “The president believes that middle-class families shouldn’t pay higher taxes than households making over a million dollars annually."
Though the group is small, the dollars are large. For the top 400 taxpayers, the effective federal income tax rate has dropped from 29 percent in 1993 to 18 percent in 2008. The average adjusted gross income of those 400 households was $271 million. By comparison, households with $50,000 to $75,000 in income paid an effective rate of 15 percent, according to the Congressional Budget Office.
House Speaker John Boehner, Republican of Ohio, dismissed the proposal as a politically incendiary attempt to rally Mr. Obama’s core voters, and predicted it would hurt the limping economy and suppress hiring.
Recent history offers little evidence to support the contention that higher taxes undermine economic growth: employment and economic growth were far weaker after the Bush tax cuts of 2001 and 2004 than they were under the higher rates of the Clinton administration. But Curtis Dubay, a senior policy analyst at the conservative Heritage Foundation, said that job growth in the Clinton and Bush administrations followed reductions in capital gains taxes.
That is what worries Mr. Dubay. The proposal could mean higher taxes on capital gains for the wealthy. “And that’s where investment and hiring starts,” he said.
© 2011 The New York Times Company
http://www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html [ http://www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html?pagewanted=all ] [comments at http://community.nytimes.com/comments/www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html ]
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Moderates should be glad to see Obama's fighting spirit return
Mercury News Editorial
Posted: 09/20/2011 08:14:39 PM PDT
Updated: 09/20/2011 09:54:59 PM PDT
Is the Barack Obama of 2008 back?
It's starting to look that way. The president finally is ditching his "compromiser in chief" shtick and reviving the fighting spirit that won him the White House. His proposals to create jobs and reduce the deficit are strong and sensible, a contrast with his futile attempts to win Republican votes by ceding ground from the start.
This is a move toward the left, but it is not a move to the extreme. A substantial majority of Americans want these programs and will benefit from them.
According to GOP economist Bruce Bartlett, 26 of 27 polls since last fall show that a majority -- an average of 64.5 percent of respondents -- favor reducing the deficit through spending cuts and tax increases, as Obama proposes. An average of 30 percent prefer only cuts.
Polls show most Americans like Obama's $450 billion job plan, too. Gallup reports that half or more of Republicans say they support most ideas in the bill, including federal spending to hire police officers, teachers and firefighters.
Obama's proposal to ensure the wealthiest pay a fair share of taxes has Republicans screaming "class warfare." That's just batty. If there's class warfare in this country, the middle class is already losing. The top 1 percent of earners now take home about a quarter of the nation's income, compared with 12 percent of income in 1986, by one estimate. In the same period, middle-class incomes have stagnated or shrunk; men with only a high school diploma are earning more than 10 percent less.
This is no accident. It is the direct result of deliberate changes in the tax code and other policies to benefit the wealthiest. Obama can't reverse this trend overnight, but he is trying to slow it down.
A strong middle class always has been the backbone of this nation and economy. If trying to rebuild and strengthen it is class warfare, then bring it on.
Copyright © 2011 - San Jose Mercury News
http://www.mercurynews.com/opinion/ci_18940900 [with comments]
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Video [embedded]: Speaking from the White Hosue President Obama calls for $1.5 trillion in new revenue as part of a plan to find more than $3 trillion in budget savings over a decade.
Breaking down Obama’s debt plan
President Obama called for $1.5 trillion in new tax revenue as part of a plan to find more than $3 trillion in budget savings over a decade.
Sources: Office of Management and Budget, White House. Laura Stanton and Tobey/The Washington Post.
[ http://www.washingtonpost.com/business/economy/breaking-down-obamas-debt-plan/2011/09/19/gIQARsFyfK_graphic.html ]
By Dan Balz, Published: September 19, 2011
The deficit-reduction speech President Obama delivered from the Rose Garden [ http://www.washingtonpost.com/business/economy/obama-proposes-new-taxes-on-wealthy-for-half-of-debt-plan/2011/09/19/gIQATnkNfK_story.html ] on Monday underscores the sharp strategic pivot that he and his administration have made in the wake of the debt-ceiling negotiations.
Call it lessons learned the hard way, or a necessary readjustment by a politician, but the Obama who spoke on Monday was in a far different place politically and stylistically from the president who tried to pull off a grand bargain with House Speaker John A. Boehner (R-Ohio) in July and August.
Obama is a politician whose instinct often has been to find ways to entice or cajole both parties to produce cross-party consensus. Republicans would say he failed to do that on his stimulus and health-care measures, but Democrats regularly worry that he will give in too easily to get a deal.
On Monday, he continued a transition toward greater partisanship that began with his speech to a joint session of Congress [ http://www.washingtonpost.com/business/economy/obama-lays-out-447-billion-plan-to-boost-nations-economy/2011/09/08/gIQAk3ELDK_story.html ] two weeks ago. Rarely has this president been as blunt in his challenges to the other party as he was on Monday. Rarely has he been so willing to draw lines in the sand [ http://www.washingtonpost.com/blogs/the-fix/post/obama-throws-down-the-political-gauntlet-on-deficit-fight/2011/09/19/gIQA5YiQfK_blog.html ]. Rarely has he waved the threat of a veto [ http://www.washingtonpost.com/business/economy/obama-proposes-new-taxes-on-wealthy-for-half-of-debt-plan/2011/09/19/gIQATnkNfK_story.html?hpid=z1 ] with such emphasis.
Obama has gone from a president who talked openly about his willingness to rile his own party by making concessions on entitlements to get a debt deal with the Republicans to a politician determined to reconnect with his base as the two parties head into a new round of negotiations and an election campaign in which the stakes could not be higher.
Monday’s speech was another sign that many of the working assumptions Obama and his advisers took into the debt-ceiling talks have been replaced — some because of practical necessity but more fundamentally because of political necessities. Whatever hope the president had of coming out of the debt-ceiling debate with an enhanced image as the adult in the room, no matter what the final outcome, collided with the evidence that he and the Republicans both suffered political damage.
With his own political standing weakened [ http://www.washingtonpost.com/politics/obama-ratings-sink-to-new-lows-as-hope-fades/2011/09/05/gIQAIytZ5J_story.html ] and his base in near-revolt [ http://www.washingtonpost.com/politics/moveonorg-other-liberals-grapple-with-idea-of-supporting-obamas-reelection-campaign/2011/09/16/gIQAiePQaK_story.html ], the president may have had no choice other than to reappraise his economic and political strategies. Attempting to stay above the fray and appealing for at least a temporary cessation in the partisan wars in Washington was no longer an option.
Gone is any illusion that he and Boehner can really make a deal along the lines discussed during the summer — a deal that would take a serious bite out of entitlements, particularly Medicare, and include some new taxes. He no longer appears willing to antagonize his base. Instead, Obama is under pressure to produce a program that can create jobs and reassert his standing as the leader of the Democrats.
But with Boehner declaring taxes off the table [ http://www.washingtonpost.com/politics/boehner-says-no-new-taxes-for-debt-panel-in-economic-speech-on-thursday/2011/09/15/gIQAop9vUK_story.html ] in his speech last week, the president was left with little choice. He came back with his counterargument that the only fair way to reduce long-term deficits is with a combination of taxes and spending cuts — and not the kind of entitlement cuts he once was willing to consider.
Perhaps this is just a different opening bid, the terms of which could change if the negotiations inside the “supercommittee” in Congress look as if they are making genuine progress. But it seems less likely after the speech Monday.
With more force than at any time in his presidency, Obama pressed his argument of mutual sacrifice, with a significant share of it aimed at the wealthiest Americans. His call for an end to the Bush tax cuts for the wealthiest Americans and a millionaires’ tax (in the name of billionaire Warren Buffett) on top was greeted by charges of class warfare from his Republican critics. “This is not class warfare,” he said. “It’s math.”
If instant reactions are any indication, Obama’s speech helped reassure some in the Democratic family that he is one of them and that he will fight for the values they hold most dear. Daniel Mintz, the campaign director of MoveOn.org, an organization often at odds with the president, issued a statement of praise.
“For months, hundreds of thousands of members of the American Dream Movement have been urging Washington to focus on creating jobs and making our tax system work for all Americans, not just the super rich,” Mintz said. “Today, we’re glad to see this message reach the White House.”
This was a speech guaranteed to draw criticism from Republicans, and it came quickly. Senate Minority Leader Mitch McConnell (Ky.) offered this [ http://www.washingtonpost.com/blogs/2chambers/post/obamas-deficit-reduction-plan-reactions-from-capitol-hill/2011/09/19/gIQAv6XRfK_blog.html ]: “Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth — or even meaningful deficit reduction. The good news is that the Joint Committee is taking this issue far more seriously than the White House.”
It may be a measure of the president’s weakness that he has backed off significantly on changes in entitlements. He excluded Social Security from any changes in his new proposal, with administration officials arguing that it should be dealt with separately and apart from the current round of deficit-reduction talks.
More significant was his backing down on Medicare. During the negotiations with Boehner and Republicans, Obama was willing to agree to a rise in the Medicare eligibility age from 65 to 67. There was no mention of that Monday. Instead he returned to the kind of tough language he used in the spring when he took on House Budget Committee Chairman Paul Ryan’s budget and in particular Ryan’s proposed changes to Medicare.
Obama’s speech was obviously anything but a blueprint designed to produce bipartisan consensus. For now, those days are over. Instead, the president has decided he must win the battle for public opinion in the debate between his vision and that of the Republicans if he hopes to win a second term in office.
He believes the American people are with him on the broad outlines and values he espoused Monday. The campaign that began on Sept. 8 in the House chamber continued Monday in the Rose Garden, with a weakened president fighting to win that battle.
© 2011 The Washington Post
http://www.washingtonpost.com/politics/obama-turns-fire-on-republicans/2011/09/19/gIQAjJ3dfK_story.html [with comments]
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Obama Draws New Hard Line on Long-Term Debt Reduction
In remarks Monday in the Rose Garden, President Obama vowed, “We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”
Doug Mills/The New York Times
By JACKIE CALMES
Published: September 19, 2011
WASHINGTON — With a scrappy unveiling of his formula to rein in the nation’s mounting debt, President Obama confirmed Monday that he had entered a new, more combative phase of his presidency, one likely to last until next year’s election as he battles for a second term.
Faced with falling poll numbers for his leadership and an anxious party base, Mr. Obama did not just propose but insisted that any long-term debt-reduction plan must not shave future Medicare benefits without also raising taxes on the wealthiest taxpayers and corporations.
He uncharacteristically backed up that stand with a veto threat, setting up a politically charged choice for anti-tax Republicans — protect the most affluent or compromise to attack deficits. Confident in the answers most voters would make, Mr. Obama plans to hammer on that choice through 2012, reflecting the fact that the White House has all but given up hopes of a “grand bargain” with Republicans to restore fiscal balance for years to come.
“I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share,” Mr. Obama said. “We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”
Mr. Obama also seems to have given up on his strategy of nearly a year, beginning when Republicans won control of the House last November, of being the eager-to-compromise “reasonable adult” — in the White House’s phrasing — in his relations with them. He had sought to build a personal relationship with Speaker John A. Boehner of Ohio, a man the White House saw as a possible partner across the aisle, in the hopes of making bipartisan progress and simultaneously winning points with independent voters who disdain partisanship. Even if the efforts produced few agreements with Republicans, the White House figured, independents would give Mr. Obama credit for trying.
Instead, the president was unable to close his deal with Mr. Boehner and has only lost independents’ support and left Democrats disillusioned, raising doubts about his re-election prospects.
So after his initial two years of dealing with an economic and financial crisis while pursuing an activist social agenda with Democrats in control of the House and Senate, and then a frustrating third year sharing power with Republicans, Mr. Obama now begins writing a third chapter for his final 15 months that is not the one he had in mind.
“It is fair to say we’ve entered a new phase,” said Dan Pfeiffer, Mr. Obama’s communications director. But he disputed what he called the conventional wisdom behind the president’s shift.
“The popular narrative is that we sought compromise in a quixotic quest for independent votes. We sought out compromise because a failure to get funding of the government last spring and then an extension of the debt ceiling in August would have been very bad for the economy and for the country,” Mr. Pfeiffer added. “We were in a position of legislative compromise by necessity. That phase is behind us.”
In this new phase, Mr. Obama must solidify support among Democrats by standing pat for progressive party principles, while trusting that a show of strong leadership for the policies he believes in will appeal to independents. Polls consistently suggest that perhaps the only thing that unites independents as much as their desire for compromise is their inclination toward leaders who signal strength by fighting for their beliefs.
“The president laid down a marker today that is true to his beliefs,” said Jacob J. Lew, director of Mr. Obama’s Office of Management and Budget. In response, Mr. Boehner said in a statement that Mr. Obama by his deficit-reduction plan “has not made a serious contribution” to the work of a bipartisan joint Congressional committee, which has two months to reach agreement on cutting deficits by at least $1.5 trillion in 10 years.
“The administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously,” Mr. Boehner said. “And it is evident today that these barriers remain.”
Mr. Obama’s plan to reduce annual deficits up to $4 trillion over a decade does call for subtracting $320 billion from Medicare and Medicaid, building on savings required in his health care law.
But those proposals are far from the overhaul and reductions that Republicans are demanding in the two popular entitlement programs, whose growth because of the aging of the population and ever-rising medical costs is driving the long-term projections of unsustainable debt.
And Mr. Obama removed Social Security from the table, as well as a proposal to slowly raise the eligibility age for Medicare to 67 from 65. He put both forward in July, to the chagrin of many Democrats, in private negotiations with Mr. Boehner that fell apart when the speaker balked at agreeing to higher revenues. Administration officials say Mr. Obama is not ruling out either proposal if Republicans were to show significant give on taxes.
But the White House does not expect Republicans to do so. Indeed, Mr. Obama’s new tack in pressing the deficit-reduction framework and $447 billion jobs-creation plan that he wants — not trimmed to draw Republicans’ votes — reflects the conclusion he has drawn from the past 10 months: Republicans will oppose almost anything he proposes, even tax cuts. And Mr. Boehner is unable to deliver his uncompromisingly anti-tax Republicans for any compromise that includes tax revenues.
Mr. Obama believed he had built a good working relationship with Mr. Boehner based on a shared desire for a deal modeled on proposals of past bipartisan panels, which called for a mix of new revenues and changes in entitlement programs.
But their relationship was severely strained after Mr. Boehner abandoned their budget talks in July, came back and then walked out a second time. And after what the White House saw as a third strike this month — Mr. Boehner’s humiliating public rejection of Mr. Obama’s requested date for an address to a joint session of Congress — the Obama team called Mr. Boehner out.
Their breach was evident in Mr. Obama’s remarks. He singled out Mr. Boehner in his criticism of Republicans as unwilling to compromise, a break from the past when Mr. Obama typically criticized Republicans in general but mentioned Mr. Boehner only to praise him as a constructive partner. Not this time.
“Unfortunately, the speaker walked away from a balanced package,” Mr. Obama said, referring to their earlier talks. “What we agreed to instead wasn’t all that grand.”
Then he mocked Mr. Boehner for a speech last week in which the speaker said only spending cuts could be part of a budget deal.
“So the speaker says we can’t have it ‘my way or the highway’ and then basically says, ‘My way — or the highway,’ ” Mr. Obama said. “That’s not smart. It’s not right.”
The president kept up his offensive even on Monday night, at a fund-raiser in Manhattan with wealthy donors from Wall Street.
“And you’re already hearing the moans and groans from the other side about how we are engaging in class warfare and we’re being too populist,” Mr. Obama said. But, he added, “if we don’t succeed, then I think that this country is going to go down a very perilous path. And it’s not going to be good for those of us who have done incredibly well in this society, and it’s certainly not going to be good for the single mom who’s working two shifts right now trying to support her family.”
*
Related
Editorial: A Call for Fairness (September 20, 2011)
http://www.nytimes.com/2011/09/20/opinion/a-call-for-fairness.html
*
© 2011 The New York Times Company
http://www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html [ http://www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html?pagewanted=all ] [comments at http://community.nytimes.com/comments/www.nytimes.com/2011/09/20/us/politics/obama-vows-veto-if-deficit-plan-has-no-tax-increases.html ]
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Why Obama got tough
By Ezra Klein
First published Sep 21 2011 01:01AM
Updated Sep 21, 2011 01:35PM
President Obama’s deficit-reduction plan is most interesting for what’s not in it. It does not cut Social Security by chaining the program’s cost-of-living increases. It does not raise the eligibility age for Medicare from 65 to 67. Nor does it include any other major concessions to Republicans. Rather, the major concession it makes is to political reality — a reality that the White House has been trying to deny for almost a year now.
Since the election, the Obama administration’s political theory has been that its first-best outcome is striking a deal with House Speaker John A. Boehner, R-Ohio, and its second-best outcome is showing it genuinely wanted to strike a deal with Boehner. Heads the administration is making Washington work, tails Republicans get blamed for stopping Washington from working.
That thinking led the White House to reward the GOP’s debt-ceiling brinkmanship by offering Boehner a “grand bargain” that cut Social Security, raised the Medicare age and included less new revenue than even the bipartisan Gang of Six had called for. You can see why it was seductive to this administration: It fit perfectly with Obama’s brand as a post-partisan uniter and his personal preferences for campaigning on achievements rather than against his opponents. But though it came close to happening, the “grand bargain” ultimately fell apart. Twice.
The collapse of that deal taught the White House two things: Boehner doesn’t have the support within his caucus to strike a grand bargain, and the American people don’t give points for effort.
The administration was initially pleased to see news reports detailing its willingness to compromise and polls showing that the American people thought the GOP was far more intransigent. It figured it was winning. It figured wrong.
Voters, Obama and his team learned, aren’t interested in compromises that don’t lead to results. Polls showed that Obama looked like the nice guy, and that kept him personally popular. But he also looked like an ineffectual leader, and that caused his job approval ratings to dip below 40 percent in some polls.
Perhaps the final and most conclusive evidence that the strategy had failed came last week, when Democrats lost special elections in Nevada and New York. Both seats were winnable. Both were lost to Republican candidates who focused most of their fire on the president. It was a far cry from New York’s special election in May, when Democrat Kathy Hochul picked up a Republican-leaning seat by hammering her opponent’s support for Rep. Paul Ryan’s Medicare-slashing budget.
The White House could have picked up Hochul’s message back in May and stuck to it throughout the debt-ceiling fight. It didn’t. The truth is, it didn’t want to. The president doesn’t think of himself as that kind of Democrat. He has been clear in his belief that there are sensible cuts that can be made to both Medicare and Social Security. He would like to win by governing effectively, by cutting deals with the other party, by making Washington work. He has never shown any interest in a generic Democratic campaign hammering Republicans for being willing to cut Medicare even as they cut taxes on the rich.
Over the past few months, he gave what Sarah Palin might call “the hopey-changey thing” a shot. It failed. The administration thought it had to choose between running a campaign based on changing Washington — even if some of its allies didn’t like it — and running a more traditionally Democratic race. Now White House officials realize that they have to decide between losing because they can’t change Washington and trying something else.
The new theory goes something like this: The first-best outcome is still striking a grand bargain with the Republicans, but it’s more likely to happen if the Republicans worry that Democrats have found a clear, popular message that might win them the election. The better Obama looks in the polls, the more interested Republicans will become in a compromise that takes some of the Democrats’ most potent attacks off the table.
The second-best outcome isn’t necessarily looking like the most reasonable guy in the room. It’s looking like the strongest leader in the room. That’s why Obama, somewhat unusually for him, attached a veto threat to his deficit plan: If the supercommittee sends him a package that cuts benefits for Medicare beneficiaries but leaves the rich untouched, he says he’ll kick it back to Congress. Rather than emphasizing his willingness to meet Boehner’s bottom lines, which was the communications strategy during the debt ceiling showdown, he’s emphasizing his unwillingness to bend on his bottom lines.
That isn’t how the White House would prefer to govern. It’s not how it would prefer to campaign. It is, let’s admit it, politics-as-usual. It’s the triumph of the old way of doing things, an admission that Washington proved too hard to change. But it’s also the only option that Obama has left.
Copyright 2011 The Salt Lake Tribune
http://www.sltrib.com/sltrib/opinion/52614330-82/obama-washington-medicare-republicans.html.csp [no comments yet]
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A Tax Others Embrace, U.S. Opposes
By DAVID KOCIENIEWSKI
Published: September 20, 2011
President Obama’s proposal for a new tax on millionaires echoes a call in many countries struggling with budget deficits and overwhelming debts to make the wealthy pay more.
Britain and France have imposed new taxes on their highest earners — and Italy, Spain, Greece and Japan are considering similar moves, despite some protests.
Whether the taxes on the rich in Europe raise enough money to close much of their budget shortfalls, they are being promoted as a step toward economic fairness at a time when governments are cutting spending on social programs like pensions, health care and education. Mr. Obama — whose millionaire’s tax would probably raise a modest amount of revenue over the next 10 years by collecting more from several hundred thousand Americans — has also framed his plan as a way to make the system more equitable.
Specifically, the proposal would counteract decades of tax reductions for most Americans that have given the wealthy the most benefit.
But the idea being embraced by much of the world faces strong opposition in the United States from Republicans and other conservatives who say it would harm the economy and cost jobs.
“Other countries explicitly use the tax system to redistribute resources in society,” said Reuven S. Avi-Yonah, a professor at the University of Michigan and expert in international tax law. “But going all the way back to no taxation without representation, Americans have had a mistrust of government. So we tolerate a greater inequality in terms of wealth. There is more opposition to tax increases, even when rates are low. And there is less confidence that government will use the money wisely.”
Still, there are some indications that Americans may be more open to tax increases on the affluent. One recent poll by The Associated Press and CNBC found that Americans feel they are less likely to become millionaires, making them more willing to embrace a tax on that group.
The initiative also echoes a populist chord sounded by Warren E. Buffett, the billionaire investor who has publicly complained that the American tax system allows him and some other wealthy individuals to pay a lower percentage of their income in federal taxes than their secretaries do.
Whether a higher tax rate would stifle business and economic growth continues to be debated. Britain raised its top tax rate to 50 percent after the 2008 financial crisis, and a number of economists and others have said that it inhibited investment and hiring. They are asking that the issue be reconsidered if the additional money generated proves less than projected.
Spain, Greece and Italy have less room to maneuver. They are under external pressure to raise tax rates and reduce spending to help meet targets for debts and deficits imposed on all members of the euro zone. To continue to raise money in the international financial markets, these countries have taken a number of steps painful for their citizens. Adding a 3 percent “solidarity tax” on the wealthy, as Italy is considering, reminds the voters that everyone is sharing the pain.
Until the recent financial crisis and worldwide economic downturn, individual tax rates had fallen substantially in most developed countries over several decades. In 1980, the top federal rate on Americans was 70 percent, and most European countries were above 60 percent. Today most European countries have rates below 50 percent. The United States has a top rate of 35 percent, but many wealthy Americans pay considerably less because their earnings are derived from dividends or capital gains, which are taxed at no more than 15 percent.
As a result, the effective federal tax rate, including payroll taxes, for the wealthiest 0.01 percent of earners fell to 31.5 percent in 2005, from 42.9 percent in 1979, according to data from the Congressional Budget Office. Over the same time, effective rates for taxpayers in the center of the range fell to 14.2 percent, a decrease of just 4 percentage points.
Mr. Buffett said he paid 17.4 percent of his income in federal income and payroll taxes last year. His secretary and the 19 other employees in his office paid an average of 36 percent, he said.
For all the opposition, what the president is proposing would affect a small group. About 450,000 of the 144 million returns filed last year had taxable income over $1 million, the administration said. The “Buffett Rule,” as the administration calls it, would affect only the subset with a lower effective tax rate than middle-class families. Mr. Obama has not said what rate he would consider appropriate or how much revenue it would raise.
Recent Treasury Department data gives a more detailed look at the group of taxpayers the administration is aiming at. In 2009, 238,000 households filed returns with adjusted gross incomes of at least $1 million. One-quarter of them paid an effective federal income tax rate of less than 15 percent, the data shows, and 1,470 paid no federal income tax at all.
“It’s a guiding principle,” said Jason Furman, principal deputy director of the National Economic Council. “The president believes that middle-class families shouldn’t pay higher taxes than households making over a million dollars annually."
Though the group is small, the dollars are large. For the top 400 taxpayers, the effective federal income tax rate has dropped from 29 percent in 1993 to 18 percent in 2008. The average adjusted gross income of those 400 households was $271 million. By comparison, households with $50,000 to $75,000 in income paid an effective rate of 15 percent, according to the Congressional Budget Office.
House Speaker John Boehner, Republican of Ohio, dismissed the proposal as a politically incendiary attempt to rally Mr. Obama’s core voters, and predicted it would hurt the limping economy and suppress hiring.
Recent history offers little evidence to support the contention that higher taxes undermine economic growth: employment and economic growth were far weaker after the Bush tax cuts of 2001 and 2004 than they were under the higher rates of the Clinton administration. But Curtis Dubay, a senior policy analyst at the conservative Heritage Foundation, said that job growth in the Clinton and Bush administrations followed reductions in capital gains taxes.
That is what worries Mr. Dubay. The proposal could mean higher taxes on capital gains for the wealthy. “And that’s where investment and hiring starts,” he said.
© 2011 The New York Times Company
http://www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html [ http://www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html?pagewanted=all ] [comments at http://community.nytimes.com/comments/www.nytimes.com/2011/09/21/business/obamas-tax-on-millionaires-faces-obstacles.html ]
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Moderates should be glad to see Obama's fighting spirit return
Mercury News Editorial
Posted: 09/20/2011 08:14:39 PM PDT
Updated: 09/20/2011 09:54:59 PM PDT
Is the Barack Obama of 2008 back?
It's starting to look that way. The president finally is ditching his "compromiser in chief" shtick and reviving the fighting spirit that won him the White House. His proposals to create jobs and reduce the deficit are strong and sensible, a contrast with his futile attempts to win Republican votes by ceding ground from the start.
This is a move toward the left, but it is not a move to the extreme. A substantial majority of Americans want these programs and will benefit from them.
According to GOP economist Bruce Bartlett, 26 of 27 polls since last fall show that a majority -- an average of 64.5 percent of respondents -- favor reducing the deficit through spending cuts and tax increases, as Obama proposes. An average of 30 percent prefer only cuts.
Polls show most Americans like Obama's $450 billion job plan, too. Gallup reports that half or more of Republicans say they support most ideas in the bill, including federal spending to hire police officers, teachers and firefighters.
Obama's proposal to ensure the wealthiest pay a fair share of taxes has Republicans screaming "class warfare." That's just batty. If there's class warfare in this country, the middle class is already losing. The top 1 percent of earners now take home about a quarter of the nation's income, compared with 12 percent of income in 1986, by one estimate. In the same period, middle-class incomes have stagnated or shrunk; men with only a high school diploma are earning more than 10 percent less.
This is no accident. It is the direct result of deliberate changes in the tax code and other policies to benefit the wealthiest. Obama can't reverse this trend overnight, but he is trying to slow it down.
A strong middle class always has been the backbone of this nation and economy. If trying to rebuild and strengthen it is class warfare, then bring it on.
Copyright © 2011 - San Jose Mercury News
http://www.mercurynews.com/opinion/ci_18940900 [with comments]
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