Tag Archives | Democrats

Occupy Congress: House GOP Negotiates with Self

The outright rejection by House GOP members of a Democratic plan designed to get as close to a Republican proposal as possible, including a spending cut/revenue ratio of 6:1 means that the House GOP has no intention of negotiating with anyone but themselves.

By refusing to consider any tax/revenue increases in any budget reduction package, the GOP is setting the public up for mandatory and brutal across-the-board cuts in discretionary spending including $712 billion in defense spending and $566 billion in non-defense spending such as education, veterans health benefits, energy, the environment, and a number of social programs serving the poor and middle class.

Who are these people representing?

I know not me.  In the latest NYT/CBS poll, 7 of 10 people think the House GOP budget proposals benefit the rich. Two-thirds believe the rich should be taxed more; the same number believe corporations should not be given tax breaks.

Congress included more cuts in defense spending if automatic cuts are triggered purposefully, figuring cuts that size in the military would act as incentive for the 12 Congress members in the Super Committee to negotiate a plan to present to the full House and Senate.

But the real zinger is the quote I’m including in my next post….

 

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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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Voter Dissatisfaction Widespread – Favors Obama

A new poll by The New York Times/CBS News shows just how disgusted the American public is with government, including politicians from both parties:

Not only do 89 percent of Americans say they distrust government to do the right thing, but 74 percent say the country is on the wrong track and 84 percent disapprove of Congress — warnings for Democrats and Republicans alike.

The public equally split their approval (46%) and disapproval (46%) of President Obama’s job.

With nearly all Americans remaining fearful that the economy is stagnating or deteriorating further, two-thirds of the public said that wealth should be distributed more evenly in the country. Seven in 10 Americans think the policies of Congressional Republicans favor the rich. Two-thirds object to tax cuts for corporations and a similar number prefer increasing income taxes on millionaires.

Only about a quarter of the public said that lowering taxes on large corporations or repealing the entire national health care lawwas a good idea. But half of the public favors reducing or repealing regulations on businesses in the United States.The disapproval toward Congress has risen 22 percentage points since the beginning of the year when Republicans took control of the House.

Public’s Views on Issues Favor Democrats

With 2/3 of the public believing income should be more fairly distributed, and only a quarter said lower taxes on corporations or repealing the entire health care law was a good idea, combined with a 22% rise in disapproval of Congress since Republicans took control of the house.

Can They Turn it into Electoral Victory

Republicans are fond of saying nobody has won the WH with Mr. Obama’s current low approval ratings.  Beyond the fact that his ratings may increase before election day,  that 89% who distrust the government to do the right thing shows the public’s curse on both parties’ houses.

In this situation, more favorable policy numbers for Democrats can be invaluable.  They give the President room for a ‘showdown’ with House obstruction on his jobs bills and substantial issues for Democrats to push in re-election campaigns

 

 

 

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Republicans Have Obligation To Support Obama Plan

Nothing the Republicans advocate has worked.  Nearly half the 2009 stimulus package was tax relief.  Last December, the President agreed to extend the Bush tax cuts (all of them) for two years.  Most people are paying less tax than when President Obama took office.  Things have not changed.

Conventional wisdom says high government debt crowds out private borrowing because the government must offer investors higher rates to get them to buy treasuries.  Republicans therefore say high debt is the main cause of unemployment,  In fact, interest rates are at the lowest most of us have seen them in a lifetime. Even when S&P lowered the US bond rating last month, treasuries rallied and drove interest rates even lower!  This is not a conventional situation.

Everything has been in place for the Republican plan to succeed: lower taxes, spending cuts, almost ridiculously low interest rates and still the economy is sputtering like a rusted locomotive.

The Republicans have failed.  They need to accept that reality and realize they have an obligation to the American people to give the President’s plan a chance.

Please explain to voters how it is that eliminating tax exemptions for oil and gas companies, obligating investment fund managers to pay the normal tax rate others in their income bracket do and asking private jet owners to depreciate at the same rate as commercial airlines amount to raising taxes?  Explain why  Republicans don’t call them t ‘closing tax loopholes’ for some very special interests?

If you don’t support the President’s program, explain how his rather retrained jobs plan  would hurt the economy.  President Obama says the economy needs another jolt, that consumer demand is dead so the government has to take the lead.  Not forever but as an infusion of blood right now before its DOA for Christmas.

Why do you want to block a reasonably sensible plan after failing for the last two years in your own?  I’d like to know.  Probably a lot of economists would like to know.  Maybe Republican grandmothers would like to know.

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Fallows Nails Danger of Double-Dip

James Fallows puts economic news in order:

“…this morning’s jobs report makes me wonder whether, as a political system, we ever learn anything. Even this basic thing: That when tens of millions of people cannot find work because of an overall “failure of demand” — not enough paychecks going to not enough people who can not make enough payments to create jobs for enough other people — the main problem facing the nation is not “runaway government spending.” Any more than it was when Herbert Hoover tightened up on spending as markets crashed, in the wave of folly that Keynes and Ahamed in their different ways chronicled. A lot has changed since the 1930s, and the 1970s. But not this basic principle

Some of his readers’ responses:

From FVH, a businessman on the East Coast:
>>As an owner/manager of a small manufacturing business I suffer a combination of despair and anger each time a political animal, of whatever color, promises to “focus like a laser on job creation.” I neither need nor want Government to focus on “job creation” (as though it were in their power to do anything in that realm). I need it to focus on “customer creation”! IT’S DEMAND, STUPID!

If governments can induce demand, I will happily handle the part about “job creation.” Get me to the point where my 1.5 production workers have to be put on overtime to fill the orders and I will quickly make my part-time employee full-time. A few more customers and I’ll hire another worker. Look, guys, that’s what we do out here! Don’t worry about cutting my taxes, don’t concern yourself with over-regulating me, don’t fuss about the “death tax” depriving my progeny of the joy of running my business. That is all trivia! This is all about Demand Side Economics.

Oh, and don’t look now, but if we can get a little “demand creation” goin’ on, so I (and my ilk) can hire some folks, then maybe those folks can think about dumping their overpriced rentals and buying foreclosed homes, thus addressing the housing inventory glut and moving us toward housing recovery. And thus beginneth a Virtuous Circle.<<From JK, whereabouts unknown:
>>My greatest disappointment with Obama so far has been his inability to explain economics.

just saying ‘stimulus’ is not an explanation. And saying that the government, like a family, must balance its budget is crazy — as Krugman repeatedly points out.

Why has Obama NOT EVER tried to explain counter-cyclic government spending?
Why has he not explained the need for deficit spending?
Why has he NOT used the Great Depression as an example?
Why has he NOT taken on the inconsistent and self-serving arguments of the Republicans?

The level of discussion has been appallingly low. The points are not difficult to present. But, at some stage, a bit of economics must be presented and defended. It’s not an argument of the morality of economics — share the burden — its how a government fights a weak economy.<<

What more can you say?  In addition to his many other talents, Mr. Fallows was trained as an economist.

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Americans Largely Reject Republican Agenda

The latest NBC/Wall Street Journal poll finds job creation #1 priority and a public resistant to cuts in entitlements:

In the poll, eight in 10 respondents say they are concerned about the growing federal deficit and the national debt, but more than 60 percent — including key swing-voter groups — are concerned that major cuts from Congress could impact their lives and their families.

What’s more, while Americans find some budget cuts acceptable, they are adamantly opposed to cuts in Medicaid, Medicare, Social Security and K-12 education.

And although a combined 22 percent of poll-takers name the deficit/government spending as the top issue the federal government should address, 37 percent believe job creation/economic growth is the No. 1 issue.

Republican pollster Bill McInturff, who conducted the survey with Democratic pollster Peter D. Hart, says these results are a “cautionary sign” for a Republican Party pursuing deep budget cuts.

The poll finds both independent and swing voters rejecting a large part of the new Republican agenda.  In addressing the disconnect between voters and the Republican budget-cutting agenda, pollster McInturff pointed out:

“It may be hard to understand why a person might jump off a cliff, unless you understand they’re being chased by a tiger. That tiger is the Tea Party.”

According to the NBC analysis of results,  ‘two-thirds of independents, seniors, 18- to 34-year-olds and suburban women say they are concerned that major cuts to government spending could impact them and their families. Roughly half of Republicans, McCain voters and Tea Party supporters express the same concern.

It appears American voters are keen to pull back either party for overestimating its mandate.  Voters did not like President Obama’s focus on health care instead of jobs, and they are highly skeptical of GOP budget-cutting plans.  They want politicians to stay focused and grounded and are wary about anything BIG: big government, big budget cuts, etc.

 

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