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Happy Holloween: Dem Budget to Right of Godzilla!

The new deficit-reduction plan from a majority of Democrats on the congressional Joint Select Committee on Deficit Reduction (the “supercommittee”) marks a dramatic departure from traditional Democratic positions — and actually stands well to the right of plans by the co-chairs of the bipartisan Bowles-Simpson commission and the Senate’s “Gang of Six,” and even further to the right of the plan by the bipartisan Rivlin-Domenici commission. The Democratic plan contains substantially smaller revenue increases than those bipartisan proposals while, for example, containing significantly deeper cuts in Medicare and Medicaid than the Bowles-Simpson plan. The Democratic plan features a substantially higher ratio of spending cuts to revenue increases than any of the bipartisan plans.  – Center on Budget and Policy Priorities<

With a spending cut/revenue ratio of 6:1, the deficit reduction plan by the Democrats goes several steps beyond any of the bi-partisan plans previously suggested.

Nevertheless, the Republicans shot it down out-of-hand.  The House GOP won’t budge on tax (revenue) increases.  This puts the entire budget-cutting process in jeopardy.  If the committee can’t decide on a budget by the end of November, automatic, across-the-board cuts be go into effect.

Table 1:
COMPARISON OF DEFICIT-REDUCTION PROPOSALS
Savings in Billions of Dollars, 2012-2021, Relative to Current-Policy Baseline
Bowles-Simpson Gang of Six Democratic Offer1
Revenue Increases 2,238 2,064 1,300
Medicare and Medicaid2 383 500 475
Other Mandatory Programs
(including chained-CPI proposal)
383 373 425
Discretionary3 1,295 1,165 1,300
Subtotal, Spending Cuts 2,061 2,038 2,200
Debt Service Savings 796 783 685
Deficit Reduction 5,095 4,885 4,185
1 Figures for the Democratic offer do not include economic stimulus proposals, the details of which are not available but apparently include both temporary tax-cut measures (like an extended payroll tax reduction) and temporary spending increases (like an extension of federal unemployment benefits).

2 The Gang of Six plan showed two alternative levels of health cuts, $500 billion and $383 billion.

3 The Democratic offer is adjusted to include $900 billion in discretionary savings enacted in the April continuing resolution and the Budget Control Act, for comparability with the other two plans. The Fiscal Commission and the Gang of Six plans measure discretionary savings relative to CBO’s March baseline. Sources: Estimates for Bowles-Simpson plan are from Moment of Truth Project, Updated Estimates of the Fiscal Commission Proposal, June 29, 2011. Estimates for the Gang of Six plan are from material provided by staff. Estimates for the Democratic offer are based on press accounts. Estimates have been adjusted by CBPP staff to put them on a comparable basis.

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Ornstein Asks Congress: Why Are you All There?

Norman Ornstein, long-time fellow at the American Enterprise Institute and columnist for Rollcall.  Mr. Ornstein poses the question at the end of a discussion about just how dire the Greece and European bank crises are for the UN.  What Congress could do but most likely won’t:

What is it? It starts with the template that every bipartisan group inside and outside Congress has come up with: $4 trillion overall in deficit reduction over 10 years including major tax reform which lowers rates and adds about  $1 trillion, a fourth of the overall package, in revenues.  Combine that with a version of the president’s jobs program for the near term,  and we have it.

Imagine if that kind of package got adopted by the super committee, especially by a vote of say, 10-2 or 9-3 — enough of a margin to enable it to survive its otherwise dicey prospects in the House, and likely to sail through the Senate. (Note to Sen. Jim DeMint (R-S.C.): no filibuster or other delay tactics allowed.)

The shock to conventional wisdom would be immense. Likely, U.S. markets would soar and there would be a comparable reaction abroad. It could actually provide enough of a positive shock to the system that it would change domestic and international consumer and business psychology, providing a major positive effect on the global economy.

Can all this be done by Nov. 23? Actually, the tax reform package can be put together pretty quickly, if the base-broadening is done by setting deduction limits rather than picking out winners and losers among the popular deductions.

Ornstein, a vocal critic of the hostage politics dominating Congress, asks:

So here is my question for all of you: Why are you there, if not to make history and improve the lives of Americans? You all have a rare, maybe unprecedented chance to do something remarkable. Don’t blow it.

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Insiders Talk about Dysfunctional Congress

The only thing that can keep the Senate functioning is collegiality and good faith. During periods of political consensus, for instance, the World War II and early post-war eras, the Senate was a “high functioning” institution: filibusters were rare and the body was legislatively productive. Now, one can no more picture the current Senate producing the original Medicare Act than the old Supreme Soviet having legislated the Bill of Rights.

Far from being a rarity, virtually every bill, every nominee for Senate confirmation and every routine procedural motion is now subject to a Republican filibuster. Under the circumstances, it is no wonder that Washington is gridlocked: legislating has now become war minus the shooting, something one could have observed 80 years ago in the Reichstag of the Weimar Republic.

This from a former GOP Senate aide of 30 years in a sizzling article in Truth-Out.

The article is ‘making the rounds’ on Capitol Hill and has inspired more staffers to write into James Fallows at The Atlantic to verify the above and add their own disgust, here and here


Updated for title

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Democrats Finally Laugh at Republicans

watch?v=5z7FiBsR8OQ&feature=player_embedded

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