There is a difference between responsible budgeting and campaign promises, but Obama cannot survive a broken promise on preserving Bush’s tax cuts for the middle class. What I hope we’re seeing is a rare example of the Democrats staking out a position on the left so that they can make a compromise in the middle. They usually say what they want and then settle for something less.
It appears that the budgeters think we can’t afford to extend the Bush tax cuts for the middle class because they will cost $130 billion annually. It should be noted for those who are concerned about possible cuts in Social Security benefits, that the money has to come from somewhere and without that $130 billion/year it is more likely that the money will come out of entitlement spending. We just allocated $59 billion for Iraq and Afghanistan last night, so cutting back on those ventures could be a start, but still wouldn’t fully make up for the Bush tax cuts.
The administration has begun talking about a comprehensive retooling of the whole tax code next year, which means they might just extend the middle class tax cuts for one-year and then do a compete overhaul. As for the politics, raising taxes is always perilous, but nothing is worse than breaking a promise not to raise taxes. Obama promised to let Bush’s tax cuts sunset for people making over $200,000/year. But he promised to preserve those tax cuts for everyone else. He can retool the tax code, but he’ll pay a mighty price if he breaks that second promise.
I wish politicians would learn that it is unwise to make tax promises. You never know what economic conditions you are going to face. Right now, it would make sense to cut taxes for the middle class to create some stimulus, but Congress is talking about doing the opposite because of long-term deficit concerns.
The Republicans’ no-new-taxes-ever-for-any-reason philosophy makes it very hard to govern effectively . In reality (something unfamiliar to Republicans), taxes should go up and down depending on circumstances. Tinkering with tax-rates is one of the few ways the federal government can actually manage the economy in a crisis, but sometimes that requires raising taxes. Both parties should be able to recognize this, but only one actually acts like it understands it.
What actually should be done is some serious cutting of the Pentagon’s budget.
“We’re going to have to take a hard look at defense if we are going to be serious about deficit reduction,” said Erskine B. Bowles, a chief of staff to President Bill Clinton who is a co-chairman of the deficit commission.
That sounds good, but it isn’t happening any time soon.
Senator Daniel K. Inouye, Democrat of Hawaii and chairman of the Senate Appropriations Committee, said that he would be looking first at tax increases and changes in Social Security and Medicare to lower the deficit, and that there was “no way” Congress would make major cuts in the military while more than 100,000 troops were still at war. But once most of them return, “I’m pretty certain cuts are coming — in defense and the whole budget,” he said.
Yes, he did just tell us that we’re paying more taxes and getting our Social Security cut before the Pentagon gets a haircut. But you knew that.
And when are these troops coming home?
What will probably happen is all the tax cuts will expire, democrats will try to pass something for the middle class, Republicans will block it with a filibuster, screaming the whole time that the rich are the ones that create jobs, cough, spit, it won’t pass and the democrats will use it against the Republicans in the fall. It’s pretty predictable if you ask me.
I have to do some research on this to see what the budget reconciliation rules are. As a general matter, you can’t filibuster the budget. But there are specific rules about what is considered part of the budget. For example, we put in last year’s budget a provision allowing us to do health care under budget reconciliation rules, but we failed in an effort to do the same for cap and trade.
I think tax policy falls automatically under budget rules, but I am not certain about that. It may be the case that the Republicans cannot prevent debate (and a vote) on the Bush tax cuts. Can anyone confirm this?
Okay, tax policy is the province of the tax-writing committees (Finance and Ways & Means) and their bills can be filibustered unless provisions are put into the budget providing that those bills be treated as part of the budget. Now I have to figure out whether that was done.
For starters, it all depends on how many Democratic Senators there are next year. Second, if an article in The Hill is any indication, we might be screwed regardless because the usual suspects will not support filibuster reform.
Here’s the link to that.
Can I get some of the grass that Akaka is smoking? Working? They do not have even have up or down votes on bills that the House has passed! What if House had 60 percent requirement on every passed Senate bill, would they think that its working?
Sen. Daniel Akaka (D-Hawaii) echoed Feinstein: “I think we should retain the same policies that we have instead of lowering it.
“I think it has been working,” he said.
You do know what’s going to happen, right?
The mid-terms will leave Democrats with 54 Senators. Given the abuse so far, the Dems will threaten to get rid of the filibuster all together at the start of the next Congress.
The GOP will scream bloddy murder, and a “compromise” will be reached which will simply reduce the filibuster down to say…55 votes instead of 60. This will be done for the farsical claim that “the GOP can’t claim it’s a power grab now!” by Dems, which of course won’t work.
Then we’ll get another 2 years of essentially the exact same situation we’re in now: the watering down of all legislation to chase after Snowe and Brown, with Nelson and Lieberman spitting on progressives at every turn.
I, for one, absolutely don’t know what will happen in this election. There are too many things going on right now that might or might not make a difference in November.
Having said that, this is a possible scenario. Congress lets the Bush tax cuts expire. The House passes a standalone bill providing progressive tax cuts with the top end of the cuts being $200,000 and those at that income having the entire amount they would have gotten from the Bush tax cuts restored to them. Simple straightforward, increases revenues, puts money in the hands of folks who have no choice but spend it.
Face it. An income of $200,000 is almost four times the median family income in the US.
So Pentagon procurement waste get conflated with troops in the field. Well, it just did. The Pentagon could have asked to reprogram money to support the troops in the field instead of asking for new money.
I wonder what fuels Hawaii’s economy besides tourism.
This is wrong:
“It should be noted for those who are concerned about possible cuts in Social Security benefits, that the money has to come from somewhere and without that $130 billion/year it is more likely that the money will come out of entitlement spending.”
Social Security is not paid out of general revenues. It is paid out of Fica taxes. Income taxes go into general revenues which secure the operating budget of the government. Social security funding is not a part of the operating budget of the government, but an entirely separate system.
Your statement repeats a rightwing meme.
True.
But we have a so-called Catfood Commission looking into how to balance the budget and Social Security is certainly part of the conversation. If we don’t repeal all the Bush tax cuts, it makes it more likely that SS will get whacked. That’s my point.