Tornado Alley (PROG)

[StephanieVanbryce]

Lines of Resistance on Fiscal Deal

By JONATHAN WEISMAN
Published: January 1, 2013


A crowd gathered outside the Capitol last week to hear Senator Tom Harkin, Democrat of Iowa, urge approval of a fiscal deal.

WASHINGTON — Just a few years ago, the tax deal pushed through Congress on Tuesday would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president’s credo that dividends and capital gains should be taxed equally and gently.

But times have changed, President George W. Bush is gone, and before the bill’s final passage late Tuesday, House Republican leaders struggled all day to quell a revolt among caucus members who threatened to blow up a hard-fought compromise that they could have easily framed as a victory. Many House Republicans seemed determined to put themselves in a position to be blamed for sending the nation’s economy into a potential tailspin under the weight of automatic tax increases and spending cuts.

The latest internal party struggle on Capitol Hill surprised even Senate Republicans, who had voted overwhelmingly for a deal largely hashed out by their leader, Mitch McConnell of Kentucky. The bill passed the Senate, 89 to 8, at 2 a.m. on Tuesday, with only 5 of the chamber’s 47 Republicans voting no.

Twenty-one hours later, the same measure was opposed by 151 of the 236 Republicans voting in the House. It was further proof that House Republicans are a new breed, less enamored of tax cuts per se than they are driven to shrink government through steep spending cuts. Protecting nearly 99 percent of the nation’s households from an income tax increase was not enough if taxes rose on some and government spending was untouched.

A party that once disputed that there was any real “cost” of tax cuts encountered sticker shock when the nonpartisan Congressional Budget Office estimated that enacting them in place of the “fiscal cliff” provisions would cost $4 trillion over 10 years.

“I personally hate it,” Representative John Campbell, a Republican from California, said of the bill. “The speaker the day after the election said we would give on taxes, and we have, but we wanted spending cuts. This bill has spending increases. Are you kidding me?”

By all accounts, the tax deal negotiated by Mr. McConnell and Vice President Joseph R. Biden Jr. is one of the most sweeping fiscal policy changes in a decade, a measure that would bring a certainty to the tax code long demanded by the financial community and taxpayers.

The bill’s heft was confirmed on Tuesday by the Congressional Budget Office, which said the income and business tax cut extensions; new capital gains, dividend and estate tax rates; and unemployment compensation would add an estimated $4 trillion to the federal deficit compared with where the government would be if Congress did nothing to halt the tax increases and spending cuts that were triggered at the start of the year.

The independent Committee for a Responsible Federal Budget said that measured against extending all 2012 policies, the deal would cut the deficit by $650 billion over 10 years. The group said the biggest cost, a “patch” to the alternative minimum tax to prevent it from suddenly affecting much of the middle class, should not be considered a cost at all because Congress has adjusted it each year anyway.

But the Congressional Budget Office’s estimate gave even some Democrats pause, especially since the bill would make permanent virtually all of the Bush tax cuts — a goal that Mr. Bush chased through the rest of his presidency. “For four years in my town hall meetings across the state, Coloradans have told me they want a plan that materially reduces the deficit,” said Senator Michael Bennet, one of three Democrats who voted against the bill. “This proposal does not meet that standard and does not put in place a real process to reduce the debt down the road.”

The bill would do much more than head off the automatic tax increases and spending cuts. It would fix in place a tax code that for more than a decade has caused struggles over regular sunset provisions, temporary solutions and fleeting incentives. The bill would finally make permanent five of the six income tax rates created in 2001 by the first Bush tax cut. It would codify Mr. Bush’s successful push, in 2003, to make tax rates on dividends and capital gains equal so that one form of investment income is not favored over the other.

But it would let lapse a two-percentage-point cut in the payroll tax, one of the recent tax policy changes most squarely aimed at the working class, meaning take-home pay may be less even if higher income taxes are headed off. The Tax Policy Center, a nonpartisan research group in Washington, estimated that 77 percent of Americans could pay more over all to the federal government this year.

“For me, this is very much an ‘on the one hand, on the other hand’ thing,” said Ari Fleischer, the White House press secretary in the years of Mr. Bush’s tax fights. “As a Bush loyalist, it’s fantastic that the Bush tax cuts, which now have to be seen inarguably as overwhelmingly for the middle class, are being made permanent. On the other hand, it’s inarguable that this adds $4 trillion to the federal debt.”

The 10-year price includes $762 billion to lock in the Bush tax rates of 10 percent, 25 percent, 28 percent and 33 percent, along with some of the Bush-era 35 percent bracket; $354 billion to continue Mr. Bush’s expanded child credit; and $339 billion to secure Mr. Bush’s 15 percent capital gains and dividend rates for families earning less than $450,000. Fixing the alternative minimum tax would cost the Treasury $1.8 trillion, according to the bipartisan Joint Committee on Taxation.

Democrats say they had little choice. The Bush White House and Republican Congresses structured the tax cuts so that letting them expire would be politically difficult. Add the across-the-board spending cuts if Congress did nothing, and President Obama felt he had to extend most of the tax cuts or watch the economy sink back into recession.

“New occasions make for new truths,” said Representative Danny K. Davis, a Democrat from Illinois and a veteran of the partisan wars over the Bush tax cuts. “New situations make ancient remedies uncouth.”

Most galling for Republicans are provisions projected to add $330 billion in spending over 10 years, including $30 billion in unemployment compensation and $21 billion in payments to Medicare health providers. None of those provisions are objectionable on their own, but collectively they almost proved impossible for Republicans to accept.

Even one of the chief architects of the Bush tax cuts, R. Glenn Hubbard, a Columbia University economist, was not crowing about their potential enshrinement. He said some Bush-era policies were no longer relevant to the task of tailoring a tax code to a properly sized government.

The 2001 and 2003 tax cuts “are not the best anchoring point” for that debate, he said. “We need a tax system that can promote economic growth and raise the revenue the American people want to devote to government.”

http://www.nytimes.com/2013/01/02/us/politics/a-new-breed-of-republicans-resists-the-fiscal-deal.html?hp&_r=1&;

I think you're on the road .. hope you are listening to something other than 'rush' .. ;) ...LOLOL....here today, it's a biting cold with the bluest clearest skies I've ever seen . .and I see a lot of them! this one is from Kid Oakland ... I'm posting it .. I just don't give a shit anymore .. WE'VE been SCREWED ... and I for one KNOW IT! ..of course, what's new?

Read it and weep

by kid Oakland
Wed Jan 02, 2013 at 08:09 AM PST

Those mistakenly celebrating the passage of this awful tax deal should read at Jonathan Weisman's latest in the NYT: [ http://www.nytimes.com/2013/01/02/us/politics/a-new-breed-of-republicans-resists-the-fiscal-deal.html?hp&_r=0 ]

Just a few years ago, the tax deal pushed through Congress on Tuesday would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president’s credo that dividends and capital gains should be taxed equally and gently.

Unfortunately, Democrats in Congress, including staunch progressives, voted for this deal. Here on the blogs we've even seen name-calling of those who have principled opposition to this tax deal.

Which is a shame. Because if the NYT can tell it like it really is, we should be able to have a meaningful discussion about what's at stake here in the netroots.

The writing is on the wall on the next steps here.

Instead of talking about the $600 billion that supporters of the tax deal claim is some fictional victory percentage (85%? 75%? 25%? 10%?) of what we "originally wanted," the public discussion, predictably, is shifting to the $4 trillion that making Bush's tax cuts permanent will add to the deficit:

The bill’s heft was confirmed on Tuesday by the Congressional Budget Office, which said the income and business tax cut extensions; new capital gains, dividend and estate tax rates; and unemployment compensation would add an estimated $4 trillion to the federal deficit compared with where the government would be if Congress did nothing to halt the tax increases and spending cuts that were triggered at the start of the year.

And now Democrats, like Senator Michael Bennett, Democrat of Colorado, are following the President's lead and framing the debate in terms of "reducing the deficit" and "reducing the debt."

No one is talking about investments in needed stimulus to create good jobs. That's gone. Now the conversation is about austerity.

(The NYT even features a glowing article about Latvia [ http://www.nytimes.com/2013/01/02/world/europe/used-to-hardship-latvia-accepts-austerity-and-its-pain-eases.html?hp ] as a model of how austerity works.)

And despite Congress passing what Obama called a middle class tax cut on the campaign trail, with the sunset of the of the payroll tax holiday, the NYT now points out that 77% of American's tax bills will go up.

Most people will see it immediately, on their next paycheck.

As Amy Davidson writes in the New Yorker: [ http://www.newyorker.com/online/blogs/comment/2013/01/obamas-next-fight.html#ixzz2Gpl37jIR ]

More outrageously, cuts to the already highly regressive payroll tax are being allowed to expire, meaning that they will rise from 4.2 per cent to 6.2 per cent. Obama didn’t even fight for them. In his statement Tuesday night, Obama described the bill as “preventing a middle-class tax hike” that could have hurt families and sent the country back into a recession; that is true, but it allowed another middle-class tax hike that could have the same effect. He also said that middle-class families “will not see their income taxes go up.” That is false, unless one goes along with the idea—and most of Washington does—that payroll taxes, which are on income and levied by the federal government, are not federal income taxes.

Instead of cheerleading the President and Congress, grassroots Democrats should fight for our vision of America. That means fighting for good jobs and to eradicate poverty. That means supporting labor unions and working people against the interests of the wealthy few. It means holding Washington D.C. accountable on the environment, and standing side by side with immigrants demanding fairness.

We have a vision for this nation, and it's been expressed clearly before. [ http://www.americanrhetoric.com/speeches/mariocuomo1984dnc.htm ]

If we are fighting for that common agenda, it's less easy fall prey to the latest press release folks in D.C. are selling.

Personally, I never thought I'd see the day that Democrats held a victory party because we locked in virtually all of the Bush-era tax cuts and working people saw their paychecks decrease at the same time.

http://www.dailykos.com/story/2013/01/02/1175646/-Read-it-and-weep

Mario Matthew Cuomo

1984 Democratic National Convention Keynote Address

delivered 16 July 1984 in San Francisco

snip ~~

We Democrats still have a dream. We still believe in this nation's future. And this is our answer to the question. This is our credo:

We believe in only the government we need, but we insist on all the government we need.

We believe in a government that is characterized by fairness and reasonableness, a reasonableness that goes beyond labels, that doesn't distort or promise to do things that we know we can't do.

We believe in a government strong enough to use words like "love" and "compassion" and smart enough to convert our noblest aspirations into practical realities.

We believe in encouraging the talented, but we believe that while survival of the fittest may be a good working description of the process of evolution, a government of humans should elevate itself to a higher order.

We -- Our -- Our government -- Our government should be able to rise to the level where it can fill the gaps that are left by chance or by a wisdom we don't fully understand. We would rather have laws written by the patron of this great city, the man called the "world's most sincere Democrat," St. Francis of Assisi, than laws written by Darwin.

We believe -- We believe as Democrats, that a society as blessed as ours, the most affluent democracy in the world's history, one that can spend trillions on instruments of destruction, ought to be able to help the middle class in its struggle, ought to be able to find work for all who can do it, room at the table, shelter for the homeless, care for the elderly and infirm, and hope for the destitute. And we proclaim as loudly as we can the utter insanity of nuclear proliferation and the need for a nuclear freeze, if only to affirm the simple truth that peace is better than war because life is better than death.

We believe in firm -- We believe in firm but fair law and order.

We believe proudly in the union movement.

We believe in a -- We believe -- We believe in privacy for people, openness by government.

We believe in civil rights, and we believe in human rights.

We believe in a single -- We believe in a single fundamental idea that describes better than most textbooks and any speech that I could write what a proper government should be: the idea of family, mutuality, the sharing of benefits and burdens for the good of all, feeling one another's pain, sharing one another's blessings -- reasonably, honestly, fairly, without respect to race, or sex, or geography, or political affiliation.

We believe we must be the family of America, recognizing that at the heart of the matter we are bound one to another, that the problems of a retired school teacher in Duluth are our problems; that the future of the child -- that the future of the child in Buffalo is our future; that the struggle of a disabled man in Boston to survive and live decently is our struggle; that the hunger of a woman in Little Rock is our hunger; that the failure anywhere to provide what reasonably we might, to avoid pain, is our failure.

the whole thing here .. and a youtube, but not one that is complete
http://www.americanrhetoric.com/speeches/mariocuomo1984dnc.htm

Fixing the economy, a new focus for Congress

By Katrina vanden Heuvel, Published: December 31

The Perils of Pauline melodrama over the “fiscal cliff” will drag on as Washington heads toward another “debt ceiling” faceoff that will climax over the next eight weeks or so.

This farce captivates the media, but no one should be fooled. This is largely a debate about how much damage will be done to the economic recovery and who will bear the pain. There is bipartisan consensus that the tax hikes and spending cuts that Congress and the White House piled up to build the so-called fiscal cliff are too painful and will drive the economy into a recession. So the folderol is about what mix of taxes and spending cuts they can agree on that won’t be as harsh.

Largely missing is any discussion of how to fix the economy, to make it work for working people once more. Just sustaining the faltering recovery won’t get it done. We’re still struggling with mass unemployment, declining wages and worsening inequality. Corporate profits now capture an all-time record percentage of the economy; workers’ wages have hit an all-time low. A little constriction, or a lot, won’t do anything to change that reality.

So how about a New Year’s resolution for Washington’s political class: Vow to focus on what can be done to fix the economy, rather than on how much to lacerate it. That would require dealing with causes, not effects. And those surely would include:

Inequality: Clearly — as even the International Monetary Fund has recognized — extreme inequality saps the effective demand needed for a robust economy.

We need to rebuild a middle class if we want to again have a vibrant, growing economy. That requires a lot more than repealing the Bush tax breaks for the top 2 percent. We should be lifting the minimum wage, empowering workers to bargain for a fair share of the productivity and profits they help to generate, and limiting CEO pay packages that give them multimillion-dollar incentives to ship jobs abroad or plunder their own companies. Congress and the White House might also imitate the Federal Reserve and keep pressing the stimulus pedal until we move much closer to full employment.

Catastrophic climate change: Gross domestic product registers growth when people go to work picking up the pieces after a climate disaster, but Americans suffer rather than benefit. It’s long past time for the United States to get serious about global warming, make the investments needed to capture a lead in the green industrial revolution that is sweeping the world, end the subsidies to Big Oil and King Coal, and help the movement to clean energy.

Fixing health care: The wrongheaded agonizing over whether to cut scholarships for poor students or lay off food inspectors ignores the gorilla in the accounting books. Our long-term budget deficits are a consequence of our broken health-care system. If we spent per capita what other industrial nations spend on health care (with, incidentally, better health results), we would be projecting surpluses. This isn’t about stripping 65-year-olds of Medicare; it’s about taking on the drug and insurance companies and hospital complexes that drive up our costs. Affordable health care is a right, not a privilege.

Rebuilding America. While Washington hyperventilates about cutting spending, the excesses of this conservative era have starved society of essential building blocks. A high-wage economy needs a modern, efficient, world-class infrastructure to be competitive. Families depend on effective governance for clean air and water, safe sewage, enforcement of occupational safety standards, world-class schools and more. Our debate has deteriorated to the point that a Democratic president brags that domestic discretionary spending — which covers basic public services from the Coast Guard to child nutrition — will be cut to a share of the economy not seen since Eisenhower. That is, in a word, goofy.

Why not at least begin an informed discussion of the services we need and the ways we can afford them?

The Congressional Progressive Caucus has started that discussion with its “Deal For All” — a smart mix of fair-share taxes and cuts designed to ensure that those who never benefited from “shared prosperity” don’t get whacked unjustly by the prevailing mantra of “shared sacrifice.”

Americans, sensibly enough, will grow more disgusted with Washington whatever resolution is reached on the fiscal cliff over these next weeks. Politicians will continue to fight about how much damage to do, not how to build what comes next. What the country needs is legislators who will focus on building rather than dismantling.

http://www.washingtonpost.com/opinions/katrina-vanden-heuvel-fixing-the-economy-a-new-focus-for-congress/2012/12/31/f4e206ae-5364-11e2-bf3e-76c0a789346f_story.html