Super Committee

GOP's False Claim Of Proposing Higher Taxes On The Rich Spreads (VIDEO)

Brian Beutler | November 22, 2011, 2:34PM

This is how bad information spreads. Channeling Washington Post columnist Robert Samuelson, Mort Zuckerman -- the billionaire real estate and media mogul -- claimed on MSNBC Tuesday that Republicans on the super committee had broken with their anti-tax orthodoxy and proposed to increase taxes, modestly, on upper income Americans.

Here's Zuckerman:

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Super Committee

CHART: The More Congress 'Fails' The More The Deficit Goes Down

Brian Beutler | November 21, 2011, 12:11PM

shutterstock/ gary718

The Super Committee is poised to fail after markets close on Monday -- which is to say the 12 members weren't able to agree on a package of new revenues and lower spending to reduce the deficit by at least $1.2 trillion over 10 years. That was their charge, and insofar as they didn't do what they set out to do, they "failed."

But if Republicans and Democrats keep failing to agree on this stuff for the next year and change, the result will be an extraordinary decrease in federal deficits -- many multiples of what the Super Committee was tasked with finding.

We've been over this before, but the point is actually stronger now than it was earlier this year, because of the outcome of the debt limit fight. Between the looming expiration of the Bush tax cuts and other temporary tax provisions ($4.8 trillion), a large, scheduled drop in Medicare physician reimbursement rates ($300 billion), the soon-to-be triggered penalties for Super Committee failure ($1.2 trillion), and the resulting savings on servicing the national debt ($900 billion), deficits are set to drop by over $7 trillion automatically, unless Congress affirmatively stops it. That's on top of the $1 trillion-plus dollars Congress banked in the debt ceiling fight.

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Jobs

Free Money! Why The U.S. Can, But Isn't Putting New Jobs On The Credit Card

Brian Beutler | November 9, 2011, 1:50PM

Dmitry Rukhlenko / Shutterstock

Here in the United States, Republican lawmakers are busy blocking plans to spend money on jobs and infrastructure improvement, while both parties work in earnest to find ways of cutting $1.2 trillion or more from the budget over the next 10 years.

They're doing this at a time when demand for America's debt is so high that investors will essentially pay the U.S. to borrow.

You read that right. Here are the numbers. They may appear hard to parse, but it's pretty straightforward: when you adjust for inflation, the interest creditors get for parking their money here is negative. That's not a deal you'd accept from your bank, but it's the deal we're getting now.

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Super Committee

CHART OF THE DAY: The GOP's Miniscule Super Committee Tax Offer

Brian Beutler | November 2, 2011, 9:51AM

With perhaps a week before the deficit Super Committee has to submit its proposals to Congressional scorekeepers in order to pass a plan by its late-November deadline, members remain far apart -- and the GOP's refusal to accept new tax revenues is at the heart of the matter.

Republicans would dispute this -- they claim they've been willing to entertain hundreds of billions in new receipts for the government and Democrats aren't serious about truly cutting entitlements programs. But pair the details of their two competing offers -- both of which were leaked to the press in recent days -- and the true source of gridlock becomes completely clear.

The Center on Budget and Policy Priorities -- no fan of the Democrats' own plan -- paired the numbers properly. CBPP noted that, contrary to standard budgeting, Republicans counted proposed fees, like increases in Medicare premiums, as "revenues," even though such cost shifting isn't a tax change, and is typically considered spending reduction. CBPP also completely hived off $200 billion Republicans claimed would result from the secondary economic effects of their plan, since there's little evidence to back up such "dynamic scoring."

The problem speaks for itself.

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Harry Reid

Republicans Find One Piece Of Obama's Jobs Bill They Like

Brian Beutler | October 20, 2011, 5:52PM

Senate jousting over President Obama's jobs bill will continue late Thursday or early Friday.

The leaders of both parties have each teed up test votes on separate provisions from the bill, for opposite political reasons. For Democrats, the relentless push for votes on pieces of the bill is meant to build a narrative voters understand: Dems support legislation that will create jobs; Republicans don't. Dems support paying for jobs bills with tiny tax increases on millionaires; Republicans support those millionaires.

But two can play at that game.

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Taxes

CHART OF THE DAY: These Are The 47 Percent

Brian Beutler | October 14, 2011, 5:45AM

1971yes / Shutterstock

If the left and the right are proxies in a class war, then they're currently fighting to win a battle of public perception. Each side wants the public to see them as on the side of the beleaguered many against the powerful few.

Democrats are vying for victory by supporting tax increases on millionaires and the "Buffett Rule," which posits that all millionaires should pay at least the same effective tax rates as the middle class. The Occupy Wall Street protesters have turned "We Are The 99 Percent" into a rallying cry.

How do you argue against that? By obscuring what the fight's really about, and perpetuating the sense that hundreds of millions of people are gaming the system. To do this, conservatives and Republican elected officials are citing recent data to create the impression that a small majority of people in the country pay all the taxes, and nearly half (a large minority) pay nothing at all. It's a false impression, and when you break down who comprises this now-famous "47 percent" -- the poor, the disabled, and the elderly -- it makes you wonder why anybody thought it was a good idea to pick a public fight with them.

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Barack Obama

Just The Facts: Republicans Falsely Claim Obama Seeks Biggest Tax Hike In History

Brian Beutler | September 29, 2011, 11:19AM

President Barack Obama

After President Obama unveiled his jobs and deficit reduction plans, he took to the road to draw a contrast between himself and the Republican politicians who want to end his political career. Obama's proposes to spend money now on hiring people and cutting taxes temporarily to spur further job growth, and pay for it in just over a year, in large part by raising taxes on wealthy Americans.

The Republican vision -- phasing out safety net programs like Medicare in order to maintain low tax rates on the same group of affluent people -- is far less popular. So in their own tried and true way, Republicans recast Obama's plan for "shared sacrifice" as "the largest tax increase in history."

What a difference! But also untrue.

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Jobs

How Obama's Jobs Plan Could Trigger Another Debt Limit Fight Before Election Day

Brian Beutler | September 19, 2011, 6:15AM

President Barack Obama and Treasury Secretary Timothy Geithner

If President Obama manages to get his entire jobs plan passed -- a big if, of course -- it will quicken the pace at which the federal government is burning through its new borrowing authority and could set up another debt limit battle with Republicans before Election Day 2012.

There are several variables at play, and another debt limit fight before the election wouldn't be a sure thing. But it's not out of the question, especially if economic growth between now and then is weaker than predicted.

A slower-than-expected economy -- or a double dip recession -- combined with the jobs bill's $447 billion price tag, means the federal government could run out of borrowing authority right about October 2012, according to one worst-case-scenario estimate. The deal to raise the debt limit last month was designed to give the government enough cushion to make it past the election before the parties would have to square off again. But that was before Obama introduced his new jobs plan, and before revised economic forecasts revealed the economy's in worse shape than economists believed earlier this year.

Here are the variables to watch that could come together to create an exquisitely timed political crisis:

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CBS

Economists: GOP Cites Deeply Flawed CBS Report To Blame Debt On Obama

Brian Beutler | August 24, 2011, 6:15AM

Top Republicans couldn't be happier with a Monday CBS News report logging the growth in the national debt under President Obama.

The debt was $10.626 trillion on the day Mr. Obama took office. The latest calculation from Treasury shows the debt has now hit $14.639 trillion.

It's the most rapid increase in the debt under any U.S. president.

The national debt increased $4.9 trillion during the eight-year presidency of George W. Bush. The debt now is rising at a pace to surpass that amount during Mr. Obama's four-year term.

But this is politically powerful only because it's equally analytically flawed.

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Tim Pawlenty

CHART OF THE DAY: Tim Pawlenty's Tax Cuts Are Bush's On Steroids -- Lots Of Steroids

Brian Beutler | June 15, 2011, 3:45PM

Tim Pawlenty

Tim Pawlenty has a plan for America, and it would force the government out of just about every sphere of American life where it exists now.

Pawlenty's tax plan, by design and effect, would dramatically erode the government's revenue base. As noted here, his plan would reduce the top individual income tax rate from 35 percent to 25 percent, cut the top corporate rate from 25 percent to 15 percent, and allow pass-through corporations to pay taxes at the corporate -- not the individual -- rate. He also wants to completely eliminate capital gains taxes, taxes on dividends and interest, and the estate tax.

An independent analysis found that it would cost the Treasury over $11 trillion over the course of a decade -- nearly three times the cost of the Bush tax cuts -- most of which would benefit the wealthiest Americans.

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CBPP

CHART: Bush Policies Dominant Cause Of National Debt

Brian Beutler | May 25, 2011, 12:33PM

Fmr. President George W. Bush

House Minority Whip Steny Hoyer made this argument in broad strokes on Monday. Hard numbers back it up.

The Center on Budget and Policy Priorities has updated and refined a widely cited chart, laying out the origins of the country's current fiscal trajectory. And as before, the lion's share of the problem comes from ongoing George W. Bush-era policies -- particularly deficit-financed tax cuts, which eliminated Clinton-era surpluses and left the Treasury poised for a huge hit when the financial crisis and economic downturn further eroded federal revenues.

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Medicare

Without Medicare Privatization, GOP Budget Won't Eliminate The Deficit

Brian Beutler | May 6, 2011, 2:53PM

Rep. Paul Ryan (R-WI)

House Republican leaders see the political writing on the wall and won't be making a hard push for their plan to privatize Medicare.

That's a bitter pill to swallow for rank and file members who already voted for the GOP budget. Now the official position of the House of Representatives, it has won praise from conservatives -- and even many mainstream media figures -- for making "hard choices" to tackle long-term debt and deficit. But crucially, a huge chunk of the savings in the plan came from ... the now-withered plan to privatize Medicare -- to shift a significant portion of Medicare costs on to consumers.

It turns out that if you strike the Medicare plan from the GOP budget -- authored by Rep. Paul Ryan (R-WI) -- it doesn't achieve fiscal balance anymore.

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Health Care

Memo Demonstrates Impact Of Hidden Middle-Class Health Care Tax

Brian Beutler | March 7, 2011, 11:23AM

House Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), and other members of the GOP leadership

Health care reform advocates are wise to the hidden middle-class taxes that passed the House last week, and are doing their best to kill them.

The groups Families USA and Center on Budget and Policy Priorities have argued publicly against the proposal, and House and Senate Democrats have circulated memos on the Hill to raise awareness of the impact the proposal will have.

As explained here, the penalties are designed to offset the cost of repealing a tax requirement on businesses. They work in several ways, but one would have particularly adverse consequences for middle-income consumers, and for the popularity of the health care law itself.

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Tax Cuts

New GOP House Rules Pave The Way For More Tax Cuts, Deficits

Brian Beutler | December 28, 2010, 10:36AM

House Minority Leader Rep. John Boehner (R-OH)

In 2007, just weeks after Republicans lost control of the House and Senate and six years after the first passel of Bush tax cuts were signed into law, Democrats made a key change to the budget rules to prevent that episode from repeating itself.

Republicans had used the budget reconciliation process -- immune from a filibuster -- to pass the cuts and explode the deficit: two things the reconciliation process was never meant to allow. To get away with it, Republicans were forced to include a 10-year sunset in package -- planting the seeds for the tax cut fight we just saw on Capitol Hill. After Dems wrested control of Congress, they banned the reconciliation loopholes used by the GOP altogether.

But as they return to power in the House of Representatives, Republicans are taking steps to unravel those changes.

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Chuck Schumer

Dem Plan To Raise Taxes On Millionaires Only An Expensive Proposition

Brian Beutler | November 29, 2010, 4:20PM

Sen. Harry Reid (D-NV) and Sen. Charles Schumer (D-NY)

Dem senators and congressmen are still kicking around a politically deft tax cut compromise: create a new tax bracket at the million-dollar mark, and tax any income in excess of that amount at Clinton-era rates. The idea's been out there for months, and has won the endorsement of politically savvy Sen. Chuck Schumer (D-NY), for an obvious reason: it turns the tax cut fight into a fight about who's on the side of millionaires.

But it comes at a high price. Democrats were hoping to allow the tax cuts to expire for all income above $250,000. That would still lead to large budget deficits over 10 years, but it would save about $700 billion over the GOP's proposal to extend all the cuts permanently. The question for proponents of the new plan is: How much of that $700 billion in savings do you lose if you raise that threshold from $250,000 to $1 million? The Center for Budget and Policy Priorities ran the numbers for Jonathan Cohn and the results are eye-popping.

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Bush Tax Cuts

GOP: Bechtel, PricewaterhouseCoopers And Other 'Small Businesses' Will See Tax Hike (CHARTS)

Brian Beutler | September 20, 2010, 11:28AM

Sen. Mitch McConnell (R-KY), Rep. John Boehner (R-OH) and Rep. Eric Cantor (R-VA)

As the fight over the expiring Bush tax cuts drags on, Democrats and Republicans are vying for public support by citing figures about business tax rates. According to President Obama and the Democrats, 97 percent of small businesses will see their tax rates remain the same. Republican counter that the remaining three percent of small businesses -- about 750,000 of them -- constitute half of all small-business income. There's only one way both of those statements can be true: Many of those 750,000 small businesses aren't small at all. Some, like Bechtel Corporation, are positively enormous.

The Democratic and Republican figures come from the non-partisan Joint Committee on Taxation. But numerous think tanks and government organizations have examined the data and come to similar conclusions: First, that letting the Bush tax cuts on the top two brackets of "small-business" income would impact a tiny percentage of those businesses; and second, that many of the "small businesses" that would be impacted are actually giant companies -- which explains why such a tiny fraction of them can account for half of small business income.

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Bush Administration

Unless Obama Lets All The Bush Tax Cuts Expire, Deficits Are Here To Stay (CHARTS)

Brian Beutler | August 27, 2010, 3:43PM

President Barack Obama

What's at stake in the upcoming battle over the Bush tax cuts? The simple answer is about $700 billion over 10 years. That's a ton of money -- but nowhere near enough to right the country's fiscal course. To really get the budget back in order and the deficit under control, all of Bush's tax cuts would have to go.

They crow about deficits, but Republicans want to make the whole batch permanent, for a total cost of $3.8 trillion over 10 years. Democratic leaders on the Hill and in the White House, however, want to preserve most of the cuts, too, and just let the tax cuts for the wealthiest Americans expire. That would still increase deficits by about $3.1 trillion over 10 years -- not as fiscally responsible as they'd have you believe. Even if Democrats get their way, in other words, there will still be revenue shortfalls as far as the eyes can see.

Take a look at this comparison from CBO.

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Health Care

Hidden Danger: How The GOP Could Kill Health Reform Without Repealing It

Brian Beutler | July 23, 2010, 1:00PM

Rep. Mike Pence (R-IN), Rep. Eric Cantor (R-VA), and Rep. John Boehner (R-OH)

For all the GOP chest puffing about reversing the new health care law, a full repeal, to put it generously, is a long-term project. Even if they retake the House in November, they almost certainly won't retake the Senate. Even if they retake both the House and the Senate, they'd still have to contend with the filibuster. And even if the filibuster weren't an issue, they'd still have to contend with a Presidential veto. All of that adds up to long odds, and they know it.

But if they do retake the House, even by a slim margin, they could still make a great deal of mischief, effectively sentencing Obama's history-making accomplishment to death by 1000 cuts.

"If Republicans are rewarded with control of the House of Representatives, we will use every means at our disposal to take that case to the American people, and repeal Obamacare lock stock and barrel," said House GOP Conference Chair Mike Pence. "We'll also use whatever means are available to delay implementation of Obamacare."

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CBO

Experts: Ryan Roadmap Balloons Deficits While Taxing Middle Class, Slashing Entitlements

Brian Beutler | March 11, 2010, 10:00AM

Rep. Paul Ryan (R-WI)

Ever since Rep. Paul Ryan (R-WI), the GOP's top budget guy, unveiled a proposal to slash and privatize entitlements in order to reduce long-term deficits, the media--and even some Democratic politicians--have praised the plan as a serious way to save money. The plan may be conservative, they say, but at least it takes a serious, honest stab at averting fiscal catastrophe. Ryan even had the Congressional Budget Office score the package, and they found that, by mid-century, it would eliminate federal deficits.

But it turns out that's not even close to true.

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Budget

Expert: The GOP Shadow Budget Might Not Even Eliminate Deficits

Brian Beutler | February 10, 2010, 2:11PM

Rep. Paul Ryan (R-WI)

House GOP's top budget guy Paul Ryan (R-WI) claims that his tax-cutting, Medicare and Social Security slashing fiscal roadmap would restore the federal budget to balance over a number of decades...and the non-partisan Congressional Budget Office has his back. But on close inspection, it turns out that CBO took much of its analytical lead from Ryan himself, dramatically skewing the numbers.

For their analysis Ryan provided CBO with a remarkable assumption: he asked CBO actuaries to assume that the major tax cuts he calls for won't create any change in federal revenue over the next two decades--at all.

Here's how they put it, in budget-ese: "As specified by your staff, for this analysis total federal tax revenues are assumed to equal those under [current fiscal policy]," the analysis reads.

There are just a couple major problems with that. According to Jim Horney, a tax expert at the Center on Budget and Policy Priorities, it doesn't account for the tremendous loss in revenues the government would experience if, as Ryan's plan calls for, the Bush tax cuts were extended and the Alternative Minimum Tax and estate tax were repealed.

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Budget Reconciliation

CBPP: Circumvent Filibuster To Pass Worthwhile Health Care Changes

Brian Beutler | January 27, 2010, 12:41PM

Rep. Nancy Pelosi (D-CA), President Obama, and Sen. Harry Reid (D-NV)

The groundswell of support for health care "Plan B" continues. The liberal-leaning Center on Budget and Policy Priorities makes the case that Democrats would be well within their rights--and within the bounds of tradition--to use the filibuster-proof reconciliation process to tweak the Senate health care bill...and that the tweaks being considered will strengthen the bill.

CBPP notes that, in the past, the reconciliation process has been used to make policy, including welfare reform, the 2001 and 2003 Bush tax cuts, and health care programs like CHIP, Medicare Advantage, and COBRA (which stands for Consolidated Omnibus Budget Reconciliation Act).

You can read their reports here and here.