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Budgets, debt limit, etc.

  • Total tax burden is a completely different ballgame and discussion. People do love playing the victim when it comes to federal income taxes, most don't even know how it is calculated, they just look at what bracket they are in and assume that's what percentage they pay on all of their income. You can always move to lessen the state and local tax burden if it is that hard on you, can't do that with the fed. I agree total tax burden can add up and obviously think we have a spending problem.

  • Do you differentiate between federal income tax and all other federal taxes?

    Do you think federal tax rates should be created in a vacuum, ignoring other existing taxation burdens on the populace?

  • Is there any actual effort to work together on solving the problem? Both sides seem so obsessed with not giving that we just waste time until 5 minutes before the deadline. It's mind boggling the dems still won't acknowledge the spending problem and at least concede that 2013 and 2014 cuts need to be involved, not just imaginary cuts in 2022 that never occur.

  • I think the Dems and Obama want the deal NOT to be done, as they will blame the Pubs, and be believed. besides how else might they get gobs of new money to spend while at the same time lop massive funding from DoD (or maybe it is more appropriate to call is the Department of Offense). It is a lefty dems wet dream, and Obama said that is where he wanted to go in the Des Moines Register interview nobody paid any attention to pre-election. If no deal occurs, they we have an across the Board tax increase and big cuts in spending. Then Obama and the Dems author a bill to only store the Bush tax cuts to those with incomes under $250,000/ year, and dare the Pubs to not support it! Meanwhile they will restore a small part of the Dept of Defense cuts.

    If I were in a Pub leadership position, I would let Obama have his way entirely on this sequestration, cliff business. Let him raise taxes on the highest 3% income earners. This stupid 'protect the rich income earners' cost Romney the election, imo. To keep up this nonsense will result in a one party national control. I also don't believe for a minute letting the Bush tax cuts for the $250,000 and up group will seriously harm the economy, and I am sure 65% of my fellow Americans don't either. What will harm the economy is the rule of one party married to regulations piled on top of regulations and the unknown.

    This post was edited by tagterp 17 months ago

  • i haven't noticed any actual work going on.

    The Dems want to tax the wealthy (return of the pre Bush era tax cuts) to those making more than 250k/year. They want to negotiate this initially, and in a vacuum from any other cuts.

    Obviously, the Pubs are less than excited about this.

    This singular issue, which is frankly meaningless to the overall problem, is exactly what our elected officials do best.

    Lots of posturing, little work so far.

    Both sides really should be meeting daily. Our Congress never ceases to underwhelm. Our Executive branch must think that there is still an election going on. Lots of campaigning, no meetings even scheduled with Congress.

  • The pubs need to do a better job of shifting the message from taxes on the wealthy to spending. Spending is the crux of the problem, and should make up 75% of the deal but all we hear about are the taxes.

    I took Boehner's concession that rates were on the table to mean he is serious about getting something done. I don't see anything serious out of Obama.

  • People don't believe that spending is the problem, as evidenced by November 6th, so that's a losing argument.

    And no, nothing meaningful will be done regarding debt reduction. In 4 years in office the president has yet to put forth a debt reduction plan.

    I disagree with Tag though, Obama doesn't want us to go over the cliff. Pubs would get most of the blame, but he wouldn't be blameless. It's a risk that he doesn't need to take. I think they'll get a relatively minor deal that barely touches entitlements and as such is more or less worthless.

    Go away, KA!

  • neal990

    This may have been posted already, but I saw an op-ed with a pretty good point. If you're the GOP, why not agree to pass the extension of the tax cuts for all but the highest income earners? Right now Obama and the media are saying that the Republicans are holding the tax cuts for the middle class hostage to protect the rich's tax cuts. So if you pass the middle class extension, then now it is the Democrats who are holding spending cuts "hostage" just to soak the rich.

  • I don't think the revenue side is a big hold up. That's just talk. Obama wants $1.6 trillion in new revenue, Boehner will tolerate $800 billion. They'll converge around $1.2 trillion on revenue. Republicans are then going to want big, big spending cuts though and that is where the problem in getting an agreement will be.

    Go away, KA!

  • Obama & Geithner re-hashing this as their deal today shows they aren't serious. Why isn't there any focus on spending cut talk? All on taxes? ...and Geithner wants a permanent debt ceiling hike?!? Take that check and balance out of Congress?? That is flat out scary. So sad social issues wound up driving the election and the Pubs had a weak candidate. We have fiscal noobs leading us to an abyss.

    I highly recommend everyone read this:

    http://www.amazon.com/Road-Serfdom-Documents-Definitive-Collected/dp/0226320553

    From the WSJ:

    President Barack Obama made an opening bid in budget talks with Republicans that calls for a $1.6 trillion tax increase, $50 billion in infrastructure spending in 2013 and new power to raise the federal debt limit, a provocative set of demands that Republicans said represented a step backward in efforts to avoid looming tax increases and spending cuts.

    John Boehner said after the budget talks on Thursday that the White House 'has to get serious.'

    The proposal marked an opening salvo in negotiations over the fiscal cliff and represented a particularly expansive version of the White House's wish list, with a heavy focus on tax increases and spending proposals—including keeping in place a payroll-tax cut and extended unemployment benefits.

    Congressional leaders remained at odds Thursday over the progress of negotiations to avoid the so-called fiscal cliff, with House Speaker John Boehner saying no "substantive progress" had been made, and Democrats saying they were confident an agreement could be reached by Christmas. Jerry Seib has details on The News Hub. Photo: Getty Images.

    Last August, President Obama and Congress put the U.S. economy on course to go over a "fiscal cliff." With the 2012 presidential election decided, WSJ's David Wessel tells you everything you need to know about the "cliff" but were afraid to ask.

    Republicans haven't put any comparable offer on the table. They have indicated willingness to accept $800 billion in revenues over 10 years, half the amount Mr. Obama proposed. And they have sought far more in spending cuts in exchange for their concessions on taxes.

    "No substantive progress has been made in the talks between the White House and the House over the last two weeks," House Speaker John Boehner (R., Ohio) said after meeting with Treasury Secretary Timothy Geithner Thursday and speaking to Mr. Obama by phone Wednesday night. "The White House has to get serious."

    The talks, which have weeks to go, will likely result in many twists and turns, with the White House offer a potential starting point for negotiations. It already has signaled it isn't wedded to raising the top income-tax rates all the way back to peak Clinton-era levels. Both sides have a good sense of what concessions they are willing to offer, but neither wants to go first for fear of losing leverage.

    GOP aides said the offer brought to Capitol Hill by Mr. Geithner calls for increasing tax rates on those with income over $250,000 in exchange for a one-year postponement of planned spending cuts in defense and domestic programs, and some $400 billion in savings over 10 years from Medicare and other entitlement programs.

    One of the most eye-opening elements of the White House plan was a proposal that Congress give up its power to raise the U.S.'s formal borrowing limit, which has become a running source of political conflict. A clash over raising the limit in 2011 led to a downgrade of the U.S.'s once-pristine credit rating.

    The White House wouldn't confirm the details described by congressional Republican officials. Earlier in the day, after GOP leaders met with Mr. Geithner, they made plain they didn't like what they heard. "The country doesn't need a victory lap, it needs leadership," said Mr. Boehner.

    Mr. Boehner's tone was a change from earlier this week when he said he was optimistic a compromise could be reached. He said that while conversations with the president and Mr. Geithner were direct and frank, he called on Democrats to offer specific spending cuts and changes to entitlement programs such as Medicare and Medicaid.

    The $400 billion in entitlement savings proposed by the White House, the same number contained in Mr. Obama's 2013 budget proposal, is seen by Republicans as being insufficient because it wouldn't tackle the program's structural problems.

    Mr. Obama is going to Pennsylvania Friday to visit a toy company and continue pressuring House Republicans to allow tax increases on upper-income Americans. Mr. Obama's plan would raise roughly $1 trillion over 10 years by ending Bush-era tax cuts for upper-income Americans. It would raise another $600 billion over 10 years through a number of changes to the tax code, including limits on tax breaks for those households.

    "Right now, the only thing preventing us from reaching a deal that averts the fiscal cliff and avoids a tax hike on 98% of Americans is the refusal of congressional Republicans to ask the very wealthiest individuals to pay higher tax rates," said White House spokeswoman Amy Brundage.

    Earlier in the day, Democrats said they were confident an agreement could be reached by Christmas. "We remain optimistic that this can get done, but the president's principles are clear," White House spokesman Jay Carney said.

    The next step in the negotiations isn't clear. That GOP aides chose to describe the offer in detail suggests relations between the two sides are somewhat rocky. Yet GOP aides said talks hadn't broken down. "There's the public choreography, then there is the real choreography," said Rep. Rob Andrews (D., N.J.). "To reach a deal, it has to look like there was a lot of fighting before the deal was reached."

    The White House proposal indicates the extent to which Mr. Obama believes he has the upper hand in negotiations following the November elections. It includes a two-stage process that would enact some deficit-reduction and spending measures by the end of the year and then set the stage for an overhaul of the tax code and entitlement programs in 2013.

    GOP aides said they were disappointed that neither stage included more in spending cuts. The bill would defer for one year the roughly $110 billion in spending cuts set to take effect Jan. 2 in both defense and domestic programs, offset by "unspecified savings" in mandatory programs such as the farm bill.

    In the second stage, the proposal calls for $400 billion in Medicare and other health savings but didn't include the kinds of major changes in the structure of the program they were seeking, such as an increase in the eligibility age.

    The White House proposal also would add to rather than reduce the deficit, by including the extension of several provisions due to expire at the end of 2012: a reduction in payroll taxes, extended unemployment benefits, Medicare payment levels for doctors, and a measure to limit the expansion of the Alternative Minimum Tax. The AMT originally was passed to ensure those with high incomes pay at least some tax, but now affects many middle-income taxpayers who itemize deductions.

    A likely confrontation looms over the White House's inclusion of its debt-ceiling provision. Mr. Boehner has insisted, as he did in 2011, that any debt increase be accompanied by a comparable amount in spending cuts. How a deal might be struck in return for Congress giving up its approval power isn't clear. In Mr. Obama's proposal, Congress would only have the power to block an administration move to raise the limit.

    The current debt ceiling is $16.394 trillion, and the government currently has $16.244 trillion in debt. The Congressional Budget Office estimated Thursday the ceiling would be reached in February or March.

    The White House request for the payroll tax cut extension—or something similar—and infrastructure spending reflects the administration's concern about the pace of the economic recovery. Also included is a request to extend a tax break that allows businesses to take an additional deduction when purchasing certain types of equipment.

    This post was edited by Sdog 17 months ago

  • PaulUMD

    The politics here are a problem for everyone. Boehner has NOT said tax rates are on the table because his caucus will not vote for them. Obama is getting a shit ton of pressure from his people to not move the Medicare/SS age up, etc. The Pub senators out there saying they're OK with revenue through capping deductions are getting good press for some reason even though that was Romney's position and basically a given in any deal.

    Their staffs are meeting every day but to me it seems like we're going over the cliff for a couple reasons. First, Pubs will not vote to raise taxes. They just won't. So as soon as the clock strikes midnight on New Year's, taxes go up automatically, and the new Congress can then vote to cut taxes on 98% of Americans and keep their stupid pledges and what not. Second, the cliff is more like a hill, and the cuts will take some time before they do real damage. But the new Congress will be a lot easier to work with on this stuff, and going into January will put enough pressure on them to do the hard things.

    Either way, Obama has all the leverage here, and I'm not sure what Boehner's strategy is. Today he said he wouldn't list what cuts he wants to entitlements and wants Obama to lay out his first. LOL, Obama isn't going to negotiate with himself. In reality, I don't think they have any Medicare cut suggestions short of the complete premium support-style overhaul they ran on.

    So they have a lot of soul searching to do, because I think they know Obama wants a deal for his legacy, but they need to figure out what kind of deal they can actually pass, and when they have the most leverage to try to do it. I think it's after the new year, for both sides.

  • Heaven forbid the President of the United States put forth a plan for reforming entitlements. That's way too much to ask.

    I pray you're right and we plunge right over this cliff. It'd be for the best long term.

    Go away, KA!

  • He may think he has leverage now, but if he doesn't get serious about cuts and actually adds more spending and tries a permanent debt ceiling raise, he will lose credibility fast. I am already seeing it on financial channels and all the guests they trot out. The tone to me has been shifting the last 10 days. I think many of the "adults" are getting frustrated by his lack of leadership and constant playing politics - whether through Reid or himself...and frankly, I think trotting out Reid is not helping his cause. That guy is a clown who has no credibility at this point. He may as well be Pelosi.

  • the tax issue is huge. It's not about w-2 wage earners missing 3-5% of their paychecks (btw the payroll tax holiday also ends) which I agree takes awhile to make any impact It's about people making newer decisions based on rates. Folks are selling assets in 2012 becuase of the cap gains, plans for future investment are put on hold, etc.

  • Among who? Financial people? He lost credibility with them years ago.

    Adding spending and resisting cuts is not going to hurt him with the average voter. That's exactly what he did for 4 years and he just got re-elected.

    Go away, KA!

  • Here's what I want to see happen. I think the political fallout from my ideas here would be minimal in the long term (which is why this is a great time to pull this off):

    -- Let sequestration take effect. IMO it's a brutal but necessary way of forcing cuts.
    -- Tax rates go back up for the new year, but Congress agrees to address the tax code in a more comprehensive way in the new year, when the new members take office.
    -- Fix the AMT disaster and create a new tax bracket for true millionaires. GOP gives the OK to tax that at the 39.6% or whatever. These two steps protect more of the middle class. Keep the Bush tax cuts where they exist.
    -- Cut the corporate tax rate 5-10%...you have to throw the private sector a bone here, because unemployment's still a disaster, historically speaking. Give them assurance so they can be confident enough to hire.
    -- Medicare and welfare cuts, and substantial ones, over the next decade. This shouldn't be political...it's math. Everyone knows they're a big problem, so let's take care of it.
    -- Perhaps pass a fucking budget going forward

    ...hopefully this allows us to keep the debt ceiling where it is, and all the politicians can take their licks now when it doesn't matter so much as far as elections. Let the chips fall where they may in 2014.

    I think that's a bold and bipartisan plan that is obviously going to be a lot for the public to digest, but what the hell else are we going to do?

  • Hey JMU6375

    What difference does it make when you have just over 100 million actual taxpayers (people who actually file a return and actually pay $$$ on that return) and over 200 million eligible voters? The gap between voters and taxpayers is astonishing.

  • I must take a poll to find out where my people are going so I can lead them there." -- Unknown

    “A democracy will always collaps because of the loose fiscal policy . Majority always votes for the candidate promising the most benefits."

  • PaulUMD

    Politically, I can't figure out why Boehner doesn't just punt on the top tax rate right now. I mean, it's never going to survive in this climate, especially since Obama campaigned so hard on it he has a pretty clear mandate at least on that issue. So give it to him. Vote on the Senate bill tomorrow, pass it, look magnanimous in doing so, take away a big piece of Obama's leverage before you even get to the hard stuff, and press the public hard for Obama to make gestures of bipartisanship like you just did.

    It would change the debate instantaneously and put the pressure on Obama to move to the center. Not doing so is basically falling on your sword for a bunch of rich people, whose taxes are going up, one way or another, anyway.

  • The PA Dept. of Public Welfare admits: "the single mom is better off earning gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

    This post has been edited 3 times, most recently by frode 17 months ago

  • Umm. Kind of agree here tho I don't buy all this leverage conventional wisdom (like I didn't buy the polls, maybe!). If Reps don't understand that they have huge leverage here, more than O, then they're dumber than I thought. The fight over tax rates is a sideshow. The main game is the debt/debt ceiling/deficit, which tax hikes will at best do nothing to address--and more likely make these things worse by marginally reducing growth.

    Paul's right. But they only need to hike the taxes for $500k and up. "Pay" for a chunk of the tax cut extension by ending the state and local tax deduction, which will hit blue states much more than red (and is perverse anyway). Let the sequester cuts happen. Much better than the phantom cuts the WH will peddle. Let the Prez know that debt ceiling will not be extended (or extended past maybe June 1) without him first laying out comprehensive tax reform. spending reform, entitlement reform that complies with the new Buffett rule: taxes at 18.5% of GDP, spending at 21% as a starting point. Then bargain the spending down to 19.5.

    And Frode--your view is fine, but you can't cut corporate rates while raising top rates unless you create some carve out for S corps and partnerships so they're not paying higher rates than big business.

  • dixonownsyou

    Spending at 19.5% of GDP with an aging population who likes their Medicare and Social Security and also doesn't seem to like it when you make big cuts concrete instead of abstract ideas?

    I'm not a mathemetician, but that seems challenging.

    "And I try to har-mo-nize with songs the lonesome sparrow sings... There are no kings inside the Gates of Eden."

  • Things like this make me sick.

  • I think something will have to give there, and it'll be forced by events more than by politicians acting bravely. I just bring up Buffett b/c he apparently has lots of credibility with the left on fiscal matters, and he clearly lays out a tax receipts to fed gvt size ratio goal that is far distant from the Admin's current path assuming all their tax and spending plans.

    I agree with Buffett that it's really risky to assume bond markets will tolerate ongoing deficits that run more than 3% or so of GDP without much higher rates (isn't the gap now like 7%?), and I don't think we'll approach 3% GDP growth rates with feds taking much more than 20% of GDP. And if we don't hit those growth rates, soon, there's no chance we meet the market returns that underlie the assumptions of federal, state and union pension and health obligations (which rely on like 8% returns). The reality of bankrupt mega-caps, states and high interest rates on fed debt will create a reality that trumps admitted resistance of Americans to cut their entitlements.