GOP Now Staring at Ceiling, Not Cliff

Reports today are that the GOP is planning to shift  its “hold our breath until we turn blue” strategy from raising taxes on the rich to raising the debt ceiling.  And if they try that?

From “Why Obama won’t negotiate with GOP over debt ceiling,” Greg Sargent, WaPo:

“So here’s a prediction: If this happens, Obama will refuse to negotiate over the debt limit, just as he’s refusing to negotiate over tax rates on the rich. The message will be clear: We’re not talking, if the debt ceiling — and the nation’s economy — have a gun pointed at their head.

Now, it’s true that if the middle class tax cuts are extended, Democrats lose a key piece of their leverage, and the remaining things Dems will want — an extension of the payroll tax cut and unemployment insurance, and a rise in the debt limit — will give Republicans a basis for renewing the push for deep entitlement cuts. But there is reason to believe that this time, Obama and Democrats will tell Republicans that they won’t brook the debt ceiling having any part in the talks.

The argument is straightforward: This isn’t 2011 anymore. Last time, Republicans had won an election; this time, Obama and Democrats won. Polls show the public increasingly sees Republicans as the intransigent party and the primary obstacle to compromise in Washington. The economy is on the mend; by threatening another drawn out debt limit battle, Republicans are recklessly putting the recovery at risk. The GOP’s brand is in tatters, and the party will ultimately cave on this point rather than risk more public blame for threatening to tank the economy again. Powerful GOP-aligned interests in the business community, including the Chamber of Commerce, won’t tolerate another debt ceiling fight. Having perennial fights over whether the country will pay its bills is no way to govern, and it simply must stop. The only way to put an end to this madness is to refuse to negotiate if the GOP insists on trying it again. Therefore, no discussions over the debt ceiling. Period.”  Emphasis added.

A Quick Reminder

As we follow the twists and turns of the road to the fiscal cliff staircase, let’s not lose sight of the fact that this is a totally unnecessary Congress-created and Obama-sanctioned artificial drama.  They chose to extend the Bush tax cuts to 12/31/12.  They chose to have the huge and arbitrary spending cuts kick in if a deficit deal wasn’t reached by that exact same date.

They didn’t just make this bed, people, they added a dust ruffle and shams.  Let them spend the holidays lying in it.

To me, the most important, the most inexcusable part of this December dance of disfunction is how we got here.

Neither party can look at the cliff and say to the other, “You didn’t build that.”

Obama Should Just Spend December in Hawaii

From “The Logic of a January Fiscal Cliff Deal,” Jonathan Chait, New York Magazine:

The GOP’s options for dealing with the expiration of the top-end tax cuts are as follows:

1. Cut a deal now (or at least before January) with Obama to set tax rates at a mutually agreeable level.
2. Vote to lock in the Bush tax cuts on income under $250,000, then strike a deal with Obama next year.
3. Do nothing, wait for all the tax cuts to expire, then wind up voting to extend them on income under $250,000 after the party takes a hit from public opinion.

From the standpoint of getting the best deal, and from the standpoint of broader public opinion, option No. 1 is the best and No. 3 is the worst. But from the standpoint of satisfying the internal demands of conservatives who primarily want their leaders not to “sell them out,” the order is reversed. Option No. 1 means “voting to raise taxes.” Option No. 2 is sort of voting to raise taxes, though Republicans may use some trick like voting “present” to avoid actually casting a vote. And option No. 3 lets the higher taxes happen without any vote at all. Republicans can vote for a tax cut.

That’s why a deal in early January probably makes the most sense for all sides. The effects of the fiscal cliff are cumulative, and the economic damage from waiting shortly into the New Year will probably be minimal to nonexistent. But the political dynamic resets in a way that makes a deal much easier to strike. Obama would already have most of the revenue he’s asking for. He could get all the additional revenue he needs without raising rates — he could even let rates drop a point or two to make Republicans feel better about things. Then the deal gets very easy for both sides.

Two Words from the Election Results — Patience and Contradictions

I’ve been reading thousands and thousands of words about the election results, but I come away with two — patience and contradictions.

Obama won because voters were willing to be patient with him about the economy.  They realized that we had an economic meltdown, not a garden-variety recession, and so we weren’t going to have a garden-variety recovery.  More voters still blame Bush for the current economy than blame Obama.  And people vote trend more than current conditions.  The economy is getting better, albeit slowly.  This patience won’t last till 2016, but that’s Hillary’s problem.

Mitt lost because aside from that patience with Obama, he was stuck with his party’s contradictions.  They said they wanted to save Medicare by destroying it (that worked really well with those villages in Vietnam).  They said we had to drastically cut Medicaid and food stamps, but we could easily afford more tax cuts for the rich.  They said we needed more personal responsibility, but not when it came to expecting Americans to buy health insurance.  They said they wanted to get government off our backs, but they had to get government into our vaginas with their ultrasound wands.

The GOP talks about being “common sense conservatives.”  They make no sense at all, common or otherwise.

He’s Baaaack, But Was It Enough?

The President was certainly back last night, and I hope, but am not sure, that it was enough.

Mitt helped the Prez by not seeming presidential himself.  He seemed more like a very rich, entitled, spoiled, impatient, looking-down-on-us peons CEO.  Appearing like a guy used to being in charge and getting your way doesn’t necessarily translate into looking like a commander in chief.  Mitt reminded me more of Donald Trump than Thomas Jefferson.

The President was extremely well-prepared,  crisp and fluent without being professorial, engaging and engaged.  He consistently did well, as when he called out Mitt on his past rejection of coal plants; when he explained that oil companies were sitting on their leases on public lands waiting for prices to rise; when he twice called out Mitt for his own low tax rate and called his tax plan “sketchy,” inevitably making us think of Mitt himself as “sketchy” and untrustworthy; when he explained that gas prices were so low when he took office because the economy was crashing and demand for oil was low.  The President really had an answer for everything.

The President called Mitt a liar, as on the auto bailout, without hurting himself.  By contrast, Mitt came across as rude to the President.

The President was effective going after Mitt both personally and on policy because Mitt helped him.  Obama sought to portray Mitt as an out-of-touch rich guy, and Mitt helped him by playing that role well.  The shoe definitely fit. Obama sought to portray Mitt as not having any answers other than tax cuts for the rich, and Mitt helped him by being vague and not explaining how he would create jobs, just claiming that he knew how.

The coup de grace obviously was the President’s 47% attack at the very end, which was powerful and effective.  He contrasted “debate Mitt” with Mitt “behind closed doors,” who has contempt for people on Social Security and veterans and active-duty service men and women and students.  There is no explaining away the 47% video.  When Mitt said he cared about 100% of us last night, his voice lacked the passion and conviction it had when he was dissing almost half of us in Boca Raton.  He gives himself away.

To me, Mitt was at his lowest when he claimed that Obama’s description of Mitt’s tax plan was “foreign.”  It was a bizarre word to use when you mean inaccurate, and it was intended to convey that Obama himself is “foreign.”  We’re back to Kenyan Muslim Socialist, we’re in birther, World Net Daily territory, which is beyond the pale of a presidential debate and beneath the dignity of a presidential candidate.  But Mitt really has no dignity, just ambition.

This debate would mean more if the first one hadn’t gone so badly for Obama, if he had been building on a strong first showing.  Mitt wasn’t as bad in this debate as Obama was in the first, he wasn’t a disaster.  I’m not sure he stumbled as much as Obama needed him to.  He certainly came across as more unlikable this time because things weren’t going his way, and he was facing a very different opponent.  It was easy for Mitt to be pleasant in the first debate when the President was doing so poorly.

The President wasn’t on a level field with Mitt last night, he was in a hole.  But he definitely put down his shovel and hopped on his ladder.  He has three weeks to keep climbing.

 

 

Ryan — No Time to Explain Math, Plenty of Time to Lie

After Mitt campaigned in Ohio telling middle class people not to get too excited about his proposed across-the-board 20% tax cut because he’ll also be taking away deductions and exemptions, his running mate is now telling people to pay no attention to that stupid guy at the top of the ticket who doesn’t know what he’s talking about.

Ryan is saying that besides that 20% rate reduction, middle class families will get to keep deductions for their charitable giving, mortgages, and health care.  Have your cake and eat it too!

Look, the whole thing was already shaping up as not deficit neutral, as Mitt had promised it would be, and this just makes the numbers not add up even more dramatically.  At some point, you have to admit that you’re going to raise taxes on the rich (I don’t see Mitt doing that!), you’re going to raise taxes on the middle class (way more likely, but Mitt doesn’t want to say so), or you’re going to increase the deficit (I expect a lot of that too).

They can’t really reassure the middle class without admitting that the deficit will go up.  And if they admit that the deficit will go up, they can’t criticize Obama on his increase in the deficit.

For more, see “Paul Ryan retreats deeper in mathematical fantasy,” Greg Sargent, The Plum Line, WaPo:

“By seeming to take some middle class deduction off the table, Ryan made the math even more hallucinat0ry.  This might be good politics — Ryan is getting more specific in promising not to raise middle class taxes — but it further confirms that Romney and Ryan have completely jettisoned deficit neutrality as a goal of their plan, and that they are selling people a fiscal bill of goods that doesn’t pass the laugh test.”

I hope Obama really sticks it to Mitt on this tomorrow night.  And then Biden can go after Ryan next week.  These two BS artists need to be called out for what they are.

Paul Ryan — You Lie!

From “Top 5 Fibs in Paul Ryan’s Convention Speech,” Brian Beutler, Talking Points Memo:

Medicare

Ryan forged his reputation in large part by drafting and advancing an unpopular plan to dramatically cut and privatize Medicare. Though he didn’t mention that plan once on Wednesday, he included it in his last two budgets, both of which preserved the Affordable Care Acts cuts to Medicare — taken mostly from overpayments to private insurers and hospitals.

Instead, Ryan once again dubiously accused President Obama of being the true threat to Medicare.

“You see, even with all the hidden taxes to pay for the health care takeover, even with new taxes on nearly a million small businesses, the planners in Washington still didn’t have enough money. They needed more. They needed hundreds of billions more. So, they just took it all away from Medicare. Seven hundred and sixteen billion dollars, funneled out of Medicare by President Obama. An obligation we have to our parents and grandparents is being sacrificed, all to pay for a new entitlement we didn’t even ask for. The greatest threat to Medicare is Obamacare, and we’re going to stop it.”

Obama did use those Medicare savings — in the form of targeted cuts in payments to providers, not in benefits to seniors — to pay for the health care law. Ryan’s budget calls for using them to finance tax cuts for wealthy Americans, and deficit reduction. But by now calling to restore that spending commitment to Medicare, Ryan and Romney are pledging to hasten Medicare’s insolvency by many years.

U. S. Credit Rating

Standard & Poors downgraded the country’s sovereign debt rating in 2011 because congressional Republicans… threatened not to increase the country’s borrowing authority — risking a default on the debt — unless Democrats agreed to slash trillions of dollars from domestic social programs and investment.

Janesville GM Plant

Ryan criticized Obama for — yes — not using government funds to prop up an auto plant in his district.

Ignoring the inconsistency of a Republican chastising Obama for not bailing out more auto manufacturers, the plant in question closed before Obama’s inauguration in 2009.

Bowles-Simpson Debt Commission

Ryan chastised Obama: “He created a bipartisan debt commission. They came back with an urgent report. He thanked them, sent them on their way, and then did exactly nothing.”

Ryan sat on that commission. He voted against it. Following his lead, so did the panel’s other House Republicans.

Protecting the Poor

Near the end of his speech, Ryan claimed the campaign’s top priority is protecting the poor. “We have responsibilities, one to another — we do not each face the world alone,” he said. “And the greatest of all responsibilities, is that of the strong to protect the weak.”

Just under two thirds of the dramatic spending cuts in Ryan’s budget target programs that benefit low-income people. That plan also calls for large tax cuts for high-income earners.

Emphasis added.

The Caricature Plutocrat

The GOP has a terrible message and an awful messenger.  Other than that, it’s all good.

From “Pro-Tip, as They Say,” Josh Marshall, Talking Points Memo:

“Having vast wealth and aggressively working the law and tax code to avoid taxes is a very different thing if your policy agenda is geared almost entirely to benefit the super wealthy.  If you’re a gazillionaire and your main pitch is to cut taxes on gazillionaires that’s just gonna put a bit more emphasis on your wealth.

“To put the point in even sharper relief, one admittedly partisan but likely accurate analysis of Romney’s tax proposal shows it would not only cut rates for the wealthiest Americans, it would actually raise taxes for most of the middle class.

“Mitt’s entire platform is cutting programs and and enabling the super-wealthy to accumulate capital to create more jobs.  Whether it actually works that way is another story — an economic argument that virtually no one on the center-left buys.  But that really is the Mitt message.  And Mitt is just not a good messenger.

“He’s stuck to it I think for a mix of personal predilections and his need to cement support from the hard right of the GOP which doesn’t believe he’s really one of them.

“There are a lot of turbulent cross-currents in the United States today.  But one of the key ones has it that the super wealthy are leaving the rest of the country behind and that they’re playing under a fundamentally different set of rules, ones they’ve written for themselves by owning the political process….  When people hear that Romney pays a 15% flat tax rate and has a lot of his money parked in tropical islands they know that he’s living in a very different world.  As a lot of Republicans are recognizing right now, Romney can easily come off like a caricature plutocrat, something that spans from his tax returns to his affect on the campaign trail.

“If a presidential candidate is worth hundreds of millions of dollars and pays less than a 15% tax rate, it’s even harder to swallow if he’s out there saying his taxes should be even lower.”  Italics in original; emphasis added.

Hey, GOP — On Obama’s Spending, “You Lie”

Mitt has accused President Obama of a “prairie fire” of spending.  Then what would he call the 8.7% in federal spending growth in Reagan’s first term or the 7.3% growth in Bush 43’s first term or the 8.1% growth in Bush 43’s second term?

You know how much federal spending has increased in Obama’s first term (projected through to 2013) — a whopping 1.4%.*  That’s the lowest increase in almost 60 years!

Then why has the national debt increased so much, from$10.6 to $15.6 trillion?  Partly because tax revenues have plummeted since the economic meltdown, partly because of the Bush tax cuts, and partly because of automatic increases in safety-net spending that were already law before Obama took office.

*From MarketWatch

 

Deficit, Shmeficit

One of my favorite wonks, Ezra Klein, says, “Don’t Worry About Deficit That Will Heal Itself”:

“I’m not particularly worried about the budget deficit.  In fact, of all the major problems the U. S. faces, I’m least worried about the deficit.

“If Congress is unable to agree on a remedy, the problem goes away on its own.

“[At the end of 2012] the Bush tax cuts are set to expire.  The $1.2 trillion spending sequester, enforcing cuts in the defense and domestic budgets, is set to go off.  Various stimulus measures — including the payroll tax cut — are scheduled to end.  ‘Taken together…these policies would reduce ten-year deficits by over $6.8 trillion….’

“In face, if Congress gridlocks — and what does Congress do these days but gridlock? — we face the prospect of too much deficit reduction too fast.

“But those charts are really about health-care spending….  What they’re really telling us is this:  If you look at how medical costs have risen in recent decades and you draw that line out for 70 more years, we’re really in trouble.  And that’s true:  We are.

“But there’s something ridiculous about extrapolating current trends all the way out to 2080.

“Look what happens when you turn the clock back 70 years from today.  That puts you in 1942, the year John Bumstead and Orvan Hess first saved a patient’s life using penicillin.  There were no pacemakers, oral contraceptives or chemotherapy.  Water wasn’t fluoridated and health insurance was a niche product.  Imagine trying to predict the trajectory of today’s health-care system from that vantage point.  How incredibly, hilariously wrong would we have been?

“In part for that reason, we don’t balance the budget for 70 years at a time.  Indeed, we usually don’t even balance it for 10 years at a time.  Instead, we muddle through, striking deals that are smaller than wonks like, but sufficient to keep us out of the woods.

“Of course, you can muddle wisely or muddle stupidly.  I worry we’ll choose the latter.  Evidence is already mounting:  The sequester is a stupid way to cut spending.  Letting the Bush tax cuts expire all at once is a stupid way to raise taxes.  And repeatedly forcing the country to the brink of default is a stupid way to manage our budget.

“Worse, too much deficit reduction too fast will hurt economic growth.

“Nevertheless, I’m confident that we will, one way or another, muddle through.  Because when it comes to the deficit, Congress really has two choices:  Do something to solve it, or do nothing and let that solve it.  The same can’t be said for issues such as infrastructure and loose nukes and climate change and preparing for pandemic flu.  On those questions, congressional inaction isn’t enough to make the problem disappear.  So those are the issues I worry about.”

I’m with Ezra.  I worry about pretty much everything, but not the deficit.

Read the whole thing at Bloomberg.com.