TPMDC Deficit
Ben Bernanke
Congress Ignores Obvious Policy Solution To Major Economic Threat
If Congress passed legislation to fund the federal government for a year, then scattered to the four winds, the United States would find itself in recession sometime in 2013.
That's what the non-partisan Congressional Budget Office concluded in a Tuesday report, meant to alert elected officials to the dangers of allowing the country to fall off the "fiscal cliff." That's shorthand for allowing all of the Bush tax cuts and the payroll tax holiday, extended unemployment benefits, and Medicare physician reimbursement rates to expire; and to allow spending on domestic and defense programs to be cut indiscriminately. All of these things will happen automatically at the beginning of the year if Congress does nothing.
Budget deficits would fall dramatically, but at the expense of hundreds of thousands or millions of jobs at a time when the country's current economic maladies are just beginning to heal. By contrast, protecting the recovery likely means large budget deficits will persist for quite some time.
If there were an obvious way around this conundrum you'd think Congress would've taken it. In reality, according to policy experts and economists of a wide range of ideological leanings there is an obvious way around this conundrum -- and yet Congress isn't taking it.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Ben Bernanke, Bill Clinton, Budget, CBO, Congressional Budget Office, Deficit, Doug Elmendorf, Economy, Fiscal Resonsibility, Recession
Barack Obama
An Obama Spending Spree? Hardly (CHART)
A dominant theme of the national political discourse has been the crushing spending spree the U.S. has ostensibly embarked on during the Obama presidency. That argument, ignited by Republicans and picked up by many elite opinion makers, has infused the national dialogue and shaped the public debate in nearly every major budget battle of the last thee years.
But the numbers tell a different story.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Debt, Deficit, Mitt Romney, Spending
House Speaker John Boehner's demand Tuesday that the next increase in the debt limit be accompanied by dollar-for-dollar "cuts and reforms" apparently comes with a caveat: It doesn't apply to the GOP budget drafted by Rep. Paul Ryan (R-WI).
Ryan's House-passed blueprint would increase the nation's debt by $5 trillion over a decade, according to the nonpartisan Congressional Budget Office. The plan has the strong support of congressional Republicans and conservatives.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Deficit, John Boehner, Paul Ryan
Deficit
Debtpocalypse 2.0 Cometh: GOP Unites Behind Boehner's Debt Ceiling Demand
Senate Republicans quickly united behind House Speaker John Boehner (R-OH) on Tuesday after he telegraphed his intention to use the debt limit as leverage to avoid a scheduled tax increase. Democrats balked at his demand that raising the debt ceiling -- which is set to max out this December -- be paired dollar-for-dollar with spending "cuts and reforms." The widening rift foreshadows another self-inflicted battle, the likes of which nearly collapsed the U.S. economy last fall.
"A request of the President to ask us to raise the debt ceiling ought to generate a significant response to deal with the problem of deficit and debt," Senate Minority Leader Mitch McConnell (R-KY) told a handful of reporters Tuesday afternoon in the Capitol.
In a Tuesday speech, Boehner said, "I will again insist on my simple principle of cuts and reforms greater than the debt limit increase" -- something his conference did last summer. Further hinting at chaos, he scoffed at the idea of raising taxes, even as Democrats insist they won't agree to another major debt-reduction deal that excludes new revenues.
McConnell wasn't the only Republican senator who backed up Boehner's stance.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Deficit, Harry Reid, House Republicans, John Boehner, Kelly Ayotte, Mitch McConnell, Olympia Snowe, Senate Republicans, Tim Geithner
Debt Ceiling
Dems: Boehner Renewed Debt Limit Fight Because He's In Thrall To Far Right
Democrats are horrified, but not exactly shocked, that House Speaker John Boehner plans to tee up a new debt limit fight.
In his weekly press briefing with reporters, House Minority Whip Steny Hoyer attributed the development to Boehner's weak grip on his party.
"Let me say that the dollar-for-dollar [requirement] led to the sequester which none of us like," Hoyer said. "So while it sounds good, the execution of that principle does not seem to be very disciplined. We need to have a big, bold, balanced deal. The Speaker, in my view, believes that as well. The Speaker's party does not believe in balance....We don't adopt their priorities."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Debt, Debt Ceiling, Deficit, John Boehner, Steny Hoyer
Debt Ceiling
Boehner: We'll Do Debt Limit Brinksmanship All Over Again
Speaker of the House John Boehner (R-OH)
Treasury Secretary Timothy Geithner wants Congress to raise the debt limit again later this year "without drama, pain and damage."
House Speaker John Boehner has other ideas.
In remarks at the 2012 Peter G. Peterson Foundation, Boehner will erect the same requirements for raising the debt limit this coming winter that nearly led the country to default on its debt last August.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Debt, Debt Ceiling, Deficit, John Boehner, Peter G. Peterson, Timothy Geithner
Deficit
Who Really Caused The Deficit? (CHART)
President Barack Obama and Mitt Romney
This week Republicans will attempt to move the national political conversation back to a familiar theme with a series of attacks on President Obama over the national debt. The GOP released a web video Monday bashing his "broken promises" on the deficit and previewed a major speech Tuesday by likely presidential nominee Mitt Romney on the issue.
Divorced from context, the numbers are uncomfortable for the President and are ready-made for pointed partisan attacks. Under Obama's watch the national debt has risen from roughly $10 trillion to $15 trillion, a record high. But to what extent are his decisions while in office to blame? The answer: very little. The vast bulk of the debt is the result of policies enacted during the Bush administration coupled with automatic increases in federal spending and decreases in tax revenue triggered by the economic downturn.
Those are economic facts of life known to experts but that often gets lost in the political debate (and which Obama's opponents are willing to obscure). So with the GOP's push to return the deficit to the center of the political conversation, here's quick reminder of the basic facts that you may have forgotten.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Budget, Bush Tax Cuts, Debt, Deficit, Mitt Romney, Paul Ryan, Tax Cuts, Taxes
Budget
Dems Sharpen Opposition As GOP Advances Cuts To Poverty Programs
Rep. Paul Ryan (R-WI)
House Republicans advanced a measure Monday that shifts automatic defense spending cuts the parties agreed to last August as part of a bipartisan debt-limit deal to domestic programs aimed at mitigating poverty and working-class struggles.
In clearing the legislation, the Budget Committee put it on a glide path to passing the full House -- but that's when it falls into limbo. Senate Democratic leadership had a concise message for their GOP colleagues: Dream on.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Budget, Budget Committee, Budget Reconciliation, Debt Ceiling, Defense Spending, Deficit, Food Stamps, House Republicans, Lloyd Doggett, Patty Murray, Paul Ryan, Super Committee
Debt
Top Congress Scholar Says Country Could Easily Fall Off Fiscal Cliff In January
Protestors demand "Cut Spending Now" near the Capitol building in Washington DC
A renowned congressional analyst thinks there's a good chance that the country could fall off a fiscal cliff on Jan. 1, no matter who wins this November.
At an American Enterprise Institute event on the future of Medicare Tuesday, AEI scholar Norm Ornstein outlined a scenario in which Congress falls on its face this winter, and fails to address the expiring Bush tax cuts and payroll tax holiday, automatic sequestration spending cuts, lapse of federal borrowing authority and other spending and tax provisions set to contract the budget automatically at the end of the year.
"Most of the cognoscenti in Washington say, Of course they'll reach an agreement because they can't not reach an agreement,'" Ornstein said. "Get inside the belly of the beast and you realize these days they can not reach an agreement."
Topics: Budget, Bush Tax Cuts, Debt, Debt Ceiling, Deficit, Medicare, Norm Ornstein, Paul Ryan, Payroll Tax Cut, Spending, Tax Cuts, Taxes, White House
John Boehner
Boehner, Pelosi Spar Over History Of 'Grand Bargain' Fiasco
Nine months after the famed deficit negotiations between President Obama and House Speaker John Boehner collapsed, the House's top Republican and top Democrat spent a full week sparring over what really happened at that critical July 2011 juncture. With a debt-limit driven economic crisis looming, Obama and Boehner neared a "grand bargain" on taxes and spending only to watch it splinter, then break apart completely at the 11th hour.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Debt, Debt Ceiling, Deficit, Eric Cantor, John Boehner, Medicare, Nancy Pelosi, Social Security
Deficit
How Republicans Threw In The Towel On Deficit Reduction
For anyone who paid even passing attention to U.S. politics in 2011, the themes were loud and persistent: Republicans had stormed back into Washington to put an end to excessive government spending and runaway deficits, and would take no prisoners if Democrats stood in their way. The GOP's bravado manifested in a series of partisan clashes over must-pass legislation, and climaxed in near economic calamity when Republicans refused to raise the federal debt limit.
Fast-forward to 2012 -- the GOP's leverage is gone, and the legislative landscape on Capitol Hill has fallowed. Republicans are still running on deficit reduction, but as the election nears, their governing agenda reveals something that close observers recognized all along: Deficit reduction was never the point. Whether acceding to political reality, or proactively moving messaging bills through the House, the GOP has quietly let on that they're fine with deficits -- as long as they come in the right flavors.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Buffett Rule, Default, Defense Spending, Deficit, Eric Cantor, House Republicans, John Boehner
Economy
Romney Budget Attack Based Flawed View Of The Economy
In a new effort to turn the country's debt and deficits into political problems for President Obama, Mitt Romney's campaign is promoting a new infographic that draws a comparison between federal and household budgets.
It may be a political winner, but it's a deeply flawed way to look at budgeting, as even many conservative budget experts admit. And it rests on the false implication that President Obama has no intention or desire to rein in deficits in the coming years.
But it breaks down further when you examine the analogy more closely -- and, as Dean Baker, co-founder of the liberal-leaning Center for Economic and Policy Research says, it suggest either that Romney's misleading voters about his policy views, or that he has a "loony" view of the economy.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Budget, Dean Baker, Debt, Deficit, Economy, Mitt Romney, Recession
Budget
Simpson-Bowles Could Get House Floor Vote
House Speaker John Boehner with House Majority Leader Eric Cantor in the foreground.
Members of Congress from both parties like to lament the opportunity missed when President Obama didn't embrace the budget plan his deficit-reduction committee co-chairs Alan Simpson and Erskine Bowles unveiled last year.
They may have an opportunity to turn preening into action.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Alan Simpson, Barack Obama, Budget, Deficit, Erskine Bowles, Fiscal Commission, Paul Ryan, Taxes
White House
White House Disputes Report That Boehner-Obama Debt Deal Still On Table
A senior White House official is disputing a key, but vague, detail in a weekend Washington Post article, which provided a number of new details about the final days of President Obama's unsuccessful attempt last summer to strike a grand bargain to stabilize the national debt with House Speaker John Boehner.
The two principals were nearing a framework that would have included higher tax revenues, unpopular cuts to Medicare and other spending reductions when the talks failed. That resulted in the debt limit deal and the ongoing fight between the parties over the federal safety net and taxes on the wealthy.
One of the Post's new details alarmed progressives.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Debt, Debt ceiling, Deficit, John Boehner, Medicare, Taxes, White House
Defense Spending
GOP Sparks New Battle Over Agreed-Upon Defense Cuts
House Republicans aren't just reigniting battles over domestic spending and Medicare in their new budget resolution. They're also instigating a war over military funding by seeking to replace automatic defense cuts both parties agreed to in the bipartisan debt limit deal to with major cuts to programs that benefit low- and middle-income Americans, such as food stamps and health care.
Democrats on the Hill and at the White House consider this a violation of the agreement they struck with Republicans last summer. The debt-limit legislation included a mechanism to force both parties to strike a balanced deal to reduce federal budget deficits: deep, automatic, across-the-board cuts to both domestic and national security programs. When the Super Committee failed in November, thanks largely to the GOP's refusal to back significant new tax revenues, it armed that bomb -- those cuts are now scheduled to take effect on Jan. 1, 2013.
Instead of reconsidering their anti-tax absolutism, Republicans want to go back on their end of the deal.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Defense Spending, Deficit, GOP Budget, House Republicans, Paul Ryan
Steny Hoyer
Dem, GOP Leaders Renew Push For Major Deficit Legislation
Under fire from progressives for working with Republicans on legislation that would likely cut entitlements and raise taxes, House Minority Whip Steny Hoyer told reporters Thursday he thinks there's an imperative to address long-run budget deficits rationally, before the end of the election, in a way that doesn't end the explicit guarantees of key government programs.
In a roundtable with reporters in his Capitol office, Hoyer said the group's still a long way from achieving broad consensus, but sought to reassure critics, constituents and other observers that he opposes the GOP's radical entitlement proposals.
"I want to emphasize, because I get beat up on, I'm for the Medicare guarantee, I'm not for a Paul Ryan alternative that eliminates the guarantee," he said. "[Some claim] I've said we ought to raise the age. I haven't said that. What I've said is I think everything ought to be on the table."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Budget, Deficit, John Boehner, Medicaid, Medicare, Nancy Pelosi, Social Security, Steny Hoyer, Super Committee, Taxes
Steny Hoyer
Progressives Petition Hoyer Against Safety Net Cuts
Progressives are escalating their campaign to warn House Minority Whip Steny Hoyer off cuts to Medicare, Medicaid, and Social Security, as he quietly pursues significant deficit reducing legislation with members of both parties. On Thursday, they will deliver 148,000 petitions to his Capitol offices.
"Representative Hoyer is hearing from thousands of Americans letting him know that we will not stand for any back room deal that puts cuts to Medicare, Medicaid or Social Security benefits on the table," said Becky Bond, Political Director of CREDO Action, an online advocacy group. "[W]orking with Republicans on a deal which will preemptively cave on cuts to our social safety net is not acceptable from the second most powerful Democratic Leader in the House of Representatives."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: CREDO, Deficit, Medicaid, Medicare, Social Security, Steny Hoyer, Taxes
House Republicans
Top Dem Warns House GOP Not To Renege On Budget Deal
Amid rumblings that House Republicans may break their end of a major budget agreement they struck with Democrats last fall, and possibly touch off another government shutdown battle later this year, a top Senate Democrat issued a stern warning to the GOP: Don't go there.
"We had a deal last August on the budget numbers, and we expect them to live with that deal," said Sen. Patty Murray (WA) -- a member of the Democratic leadership, high-ranking member of the Budget Committee and erstwhile co-chair of the Super Committee -- in an interview with TPM. "I have been astonished how many times they play with fire. Last August they almost shut the government down, a year ago they almost shut the government down, by trying to go to a place where most Americans don't believe we should be going."
Topics: Budget, Budget Committee, Deficit, House Republicans, Patty Murray, Paul Ryan, Republicans, Spending, Super Committee, Taxes
Medicare
White House Doubts Congress Can Pass Deficit Bill Before The Election
A senior administration official says the White House could support balanced deficit reduction legislation if Congress passes it before the end of the year -- but sees no evidence that Republicans have moved off their now higher tax revenue position, and thus doubt policymakers will be able to reach an agreement that President Obama can sign.
Here's the background.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Budget, Deficit, Fiscal Resonsibility, House Republicans, Medicare, Medicare Privatization, Republicans, Taxes, White House
Mitt Romney
New Romney Plan Lowers Taxes Further On Rich, Raises On Poor (CHART)
Mitt Romney
When Mitt Romney unveiled his revised tax and debt plan last week, his camp sold it as a bid to preserve fairness to the middle class.
He proposed an across the board 20 percent cut to everybody's current rates, and to make up the lost revenue by limiting deductions, credits and other tax benefits for wealthy Americans. But he declined to specify exactly how he'd broaden the tax base. And a new analysis by the Tax Policy Center shows that without those details, his proposed cuts would actually be more regressive than his first plan.
Topics: Budget, Debt, Deficit, Middle Class, Mitt Romney, Tax Cuts, Taxes
Steny Hoyer
Progressive Advocacy Group Targets Hoyer Over Potential Entitlement Cuts
House Minority Whip Steny Hoyer (D-MD) And Rep. John Conyers (D-MI)
The online, progressive advocacy group CREDO Action is targeting a top House Democrat and a leading advocate of far-reaching deficit reduction legislation, including both higher taxes and cuts to popular support programs like Medicare, Medicaid, and Social Security.
In a Monday speech, House Minority Whip Steny Hoyer revealed that he's working with a bipartisan coalition of House and Senate members to fashion a "grand bargain" on deficits, in the hope of addressing the issue -- and possibly even passing legislation -- before the November elections.
Hoyer's made no secret of the fact that he wants to see significant long-term deficit reduction, in programs that put everything, including entitlements and taxes, on the table. Progressives worry that such entitlement cuts will undermine the integrity of the programs and are warning Hoyer and Democratic members to tread cautiously. The subtext here, and the source of CREDO's leverage, is that Hoyer may -- a big may -- need progressive help in a future leadership fight, if Democrats take the majority, or Minority Leader Nancy Pelosi retires, or another shakeup occurs in the Democratic ranks.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: CREDO, Debt, Deficit, Medicaid, Medicare, Nancy Pelosi, Social Security, Steny Hoyer, Taxes
Mitt Romney
D'oh! Debt Hawks Fear Most GOP Tax Plans Will Increase Deficit
A key test for the political establishment and the media this campaign cycle will be whether they accurately explain the Presidential candidates' budget plans to voters, or whether they allow the candidates to spin their way out of the severe implications of their own proposals. The election will hinge to a large extent on the two parties' visions for the role of the federal government and how to pay for it, and keeping the taxing and spending implication of those visions clear is the key to helping voters make informed decisions at the polls.
An event hosted Thursday morning by the fiscal discipline hawks at the Center for a Responsible Federal Budget offered this corner of the establishment an early critique of the GOP candidates' tax and spending plans -- all of which drew mixed reviews or worse.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: 2012, 2012 Presidential Primaries, 2012 elections, Budget, Bush Tax Cuts, Debt, Deficit, Medicaid, Medicare, Mitt Romney, Rick Santorum, Ron Paul, Social Security, Tax Cuts, Taxes
Defense Spending
Top Defense Dem: GOP Must Blink First To Avoid Pentagon Cuts
Despite a brewing panic among Congressional Republicans (and some Democrats) over automatic, across-the-board defense cuts set to kick in on January 1, 2013, the top Democrat on the Senate Armed Services Committee says those cuts must stand unless and until Republicans relent on their anti-tax absolutism, and agree on a balanced deficit reduction package that includes higher revenue.
"The purpose of the sequester is to force us to act to avoid the sequester," Sen. Carl Levin (D-MI) told reporters at a Christian Science Monitor roundtable. "It's like a nuclear weapon -- it's totally useless; it can't be used except to accomplish some other goal than its use. It's used to deter."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Carl Levin, Debt, Debt Ceiling, Defense Spending, Deficit, Medicare, Pentagon budget, Senate Armed Services Committee, Super Committee, Tax Cuts, Taxes, pentagon
Rick Santorum
CHART: Santorum Calls For Tiny (Huge!) Tax Cuts For The Poor (Rich)
The Tax Policy Center in DC has released numbers Rick Santorum's tax plan -- the latest, and perhaps final, in a series of analyses of the leading GOP contenders' tax plans.
It's a variation on the theme underlying all of the Republicans' tax proposals -- its impact on the middle class is trivial compared to the massive tax cut it proposes for the wealthiest Americans.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Budget, Bush Tax Cuts, Deficit, Payroll Tax Cut, Rick Santorum, Tax Cuts, Taxes
Budget
CHART: A Hidden Source Of Budget Deficits
Dmitry Rukhlenko / Shutterstock
Before Warren Buffett and Mitt Romney enter a bidding war over who will volunteer more of their millions to reduce the deficit, the government could recoup many billions of dollars every year if Congress just made it easier for the Treasury to collect what it's already owed by law.
Meet the tax gap -- the difference between taxes owed and taxes paid.
Via the Center on Budget and Policy Priorities, the IRS has found that in 2006, taxpayers shorted the government by about $385 billion -- and an additional $65 billion was paid late. Back then, the tax gap was bigger than the annual budget deficit. With the economy still suffering, that's likely not true today. But closing it even partially would take substantial pressure off of strained federal programs, which have been under constant attack by the GOP for over a year.
As you can see, the tax gap is on the order of the government's biggest expenditure categories, and dwarfs the voluntary contributions Republicans suggest wealthy liberals like Buffett should volunteer to the Treasury.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Budget, Debt, Defense Spending, Deficit, Medicare, Mitt Romney, Warren Buffett
Super Committee
Lieberman: Let A Thousand Super Committees Bloom
Sen. Joe Lieberman (I-CT) speaks during a hearing conducted by the Senate Homeland Security Committee to mark the tenth anniversary of the 9/11 attacks on September 13, 2011 in Washington, D.C.
Sen. Joe Lieberman (I-CT) says the right response to the failure of the Super Committee is to let a thousand ad hoc Super Committees bloom.
When the panel failed, it lost all of its power, which was in essence the power to force Congress to hold up-or-down votes on their recommendations -- no amendments, no filibuster.
Lieberman wants to extend these same powers to any sufficiently large bipartisan "gang" in the House or Senate, if they can come up with at least $1.5 trillion in deficit reducing measures over the course of three months.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Debt, Deficit, Filibuster, Joe Lieberman, Super Committee
Patty Murray
Patty Murray: The One Percent Aren't 'Job Creators'
Super Committee Members John Kerry and Patty Murray
Former Super Committee co-chair and head of Senate Democrats' 2012 campaign effort Patty Murray will take on the GOP myth that the wealthiest Americans are "job creators" -- and therefore must be protected from higher marginal tax rates.
In prepared floor remarks sent my way, Murray will argue that the GOP has this exactly backwards, and that middle class workers need more money in their pockets -- not the highest earners.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Bush Tax Cuts, DSCC, Deficit, Patty Murray, Payroll Tax Cut, Super Committee, Tax Cuts
The Daily Show
Jon Stewart Hits The 'Superbad' Super Committee
Super committee deficit negotiations aren't going well. At all. And guess who's not surprised?
Jon Stewart, who rattled off the deficit-reduction groups of yore -- including the five people you meet in heaven and the three tenors.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Deficit, Jon Stewart, Super Committee, The Daily Show
Jeb Hensarling
Top GOPer On Super Committee Says No New Revenue, Games Out Strategy If Panel Fails
Rep. Jeb Hensarling (R-TX)
It's hard to see how the Super Committee can possibly reach a consensus by this time next week after Republican co-chair Jeb Hensarling's appearance on CNBC Tuesday night. The short version is that he left the ball in Democrats court, and hinted that if the committee fails, Congress will spend the next year or so trying to change the terms of an automatic penalty to make sure that hundreds of billions of cuts to defense programs never take effect.
Hensarling claimed that if the committee recommended even a dollar of new net tax revenue -- the kind of revenue Dems are demanding -- it would constitute a step in the wrong direction. He said a GOP plan put forward by Sen. Pat Toomey (R-PA) -- one which Republicans claim would raise revenues by nearly $300 billion over 10 years, but would also make the Bush tax cuts permanent -- is as far as Republicans are willing to go on revenues. But that's an offer Democrats flatly rejected as unserious. And unless one of the parties breaks cleanly with its publicly stated position, the committee will either fall well short of reducing the deficit by $1.2 trillion over 10 years as required by law, or will fail altogether.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Debt, Defense Spending, Deficit, Department of Defense, Jeb Hensarling, Leon Panetta, Super Committee, Taxes
Balanced Budget Amendment
Despite Packed Agenda, Congress Returns To Radical Balanced Budget Amendment
House Speaker John Boehner (R-OH) and Houser Majority Leader Eric Cantor (R-VA)
Congress is busy. It has to extend federal funding for all federal agencies before November 18, or else the government will shut down, and the deficit Super Committee has to recommend a big package of budget cuts to the House and Senate by November 23, or set in motion dramatic automatic spending cuts to defense programs and Medicare providers. But it's still suffering a hangover from the debt limit fight. And so this week House GOP leaders will fulfill one of the terms of the debt limit law, and appease some conservatives, by holding a vote on a Constitutional Balanced Budget Amendment.
There's a bit of a strife among Republicans -- and even among some Democrats -- over the details of such an amendment. But almost any version would constitute a radical policy shift for the country, and threaten key safety net programs as the country ages and the cost of health care soars. It would lead to dramatic swings in U.S. fiscal policy, and at a time of high unemployment, would cost the economy dearly.
Don't believe me, here's what analysts at Macroeconomic Advisers said about it.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Balanced Budget Amendment, Barack Obama, Budget Committee, Debt, Debt Ceiling, Default, Deficit, George W. Bush, Government Shutdown, Medicaid, Medicare, Social Security, Steny Hoyer, Super Committee, Taxes
Super Committee
Why The Super Committee Is Heading For Super Catastrophe
As of Tuesday morning, betting on the Super Committee to succeed would be playing the odds.
A key member of the Senate Democratic leadership team has openly predicted the panel will gridlock and fail, and placed the blame squarely on Republicans.
As GOP committee members met privately, Maryland Rep. Chris Van Hollen -- a Democrat on the panel -- told Bloomberg, "You need to close some of these tax loopholes and you need to generate additional revenue. And so that balance is going to be important. We saw the dueling letters just last week. We had a bipartisan group in the House that said, 'Look, everything is on the table including revenues - tax revenues.' And within 24 hours you had 33 [Republican] Senators say, 'no new net tax revenues.'"
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: CBO, Congressional Budget Office, Debt, Debt Ceiling, Defense Spending, Deficit, Health Care, Health care implementation, Jobs, Medicare, Social Security, Super Committee, Taxes
Super Committee
Chart: Super Committee Dems, GOP Differ On Jobs
As noted previously, the deficit Super Committee is gridlocked largely because the GOP is unwilling to accept higher taxes on wealthy people as part of a compromise with Democrats that also cuts Medicare, Medicaid and Social Security. But the parties also differ on the question of whether their recommendations should include any near term spending and/or tax cuts to give the weak economy a much-needed boost.
Recently committee Republicans and Democrats presented each other with competing plans -- some details of which were leaked to the press. Aides note that the Dem plan contained about $300 billion in expansionary measures, while the GOP plan contained... well, see for yourself.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Deficit, Economy, Jobs, Medicaid, Medicare, Social Security, Stimulus, Super Committee, Taxes, Unemployment
Grover Norquist
Boehner: Grover Who?!
House Speaker John Boehner with House Majority Leader Eric Cantor in the foreground.
A simple yes or no would have sufficed, but when House Speaker John Boehner was asked whether anti-tax crusader Grover Norquist was a positive influence on his caucus, he feigned ignorance.
"It's not often I'm asked about some random person in America," he said.
The context here is that Republicans are gridlocking the deficit Super Committee because they've pledged publicly never to raise taxes -- a pledge Democrats say they'll have to break to get bipartisan support for cuts to Medicare, Medicaid and Social Security.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Deficit, Grover Norquist, John Boehner, Medicaid, Medicare, Social Security, Super Committee, Taxes
Deficit
Super Committee Pressed To Raise Medicare Eligibility Age
The Democratic co-chair of President Obama's fiscal commission now says Democrats should entertain an increase in the Medicare eligibility age -- thanks in part to Obama's own health care law.
At a hearing before the deficit Super Committee, former Clinton White House Chief of Staff Erskine Bowles argued that the Affordable Care Act should allow Democrats to accept raising the Medicare eligibility age, because it creates a system of subsidized, guaranteed private health insurance for people who don't qualify for government programs like Medicare and Medicaid. And he outlined a plan -- framed as a pitch to Democrats -- that would total nearly $4 trillion in deficit reduction over 10 years, including a higher Medicare retirement age.
"As I have thought about it...under the Affordable Health Care Act we provide subsidies for people who have really chronic illnesses and people who have limited incomes so they can afford health care insurance in the private sector," Bowles told the panel during an exchange with Sen. John Kerry (D-MA). "And that didn't exist before the Affordable Health Care Act. That means that people 65, 66, 67 will still be able to get health care insurance. So as I think about it I could support raising the health care age for Medicare since we have other coverage available under the Affordable Health Care Act."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Deficit, Erskine Bowles, Jeb Hensarling, Medicare/Medicaid, Super Committee
Defense Spending
Republicans Cry Uncle On Spending ... When Cuts Hit Home
It took months of fighting -- the threat of a government shutdown, the graver threat of a default on the national debt, and now a new threat of major, automatic cuts to Medicare and defense programs -- but Congress' deficit obsession has finally exposed the rarest of all species: Republican Keynesians.
With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party -- the same party that's been on the war path for deep spending cuts, and that decries President Obama's "failed stimulus" -- are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!
Call them Defense Keynesians -- GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don't want the Super Committee to cut much more, if any, from defense, and they certainly don't want to pull the so-called "trigger" which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, CBO, Defense Spending, Deficit, Doug Elmendorf, Economy, Jobs, Stimulus, Unemployment
Flat Tax
Rick Perry's Flat Tax Plan: Not A Flat Tax
Rick Perry
The flat tax is such a popular idea in conservative circles that Texas Governor Rick Perry is trying to revive his presidential primary campaign by proposing one.
Except for the flat tax part.
It turns out Perry's plan isn't flat, doesn't eliminate the current tax code, as many conservative elites claim to want, and would likely blow a huge hole in the federal budget.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Center for American Progress, Defense Spending, Deficit, Department of Defense, Flat Tax, Medicaid, Medicare, Rick Perry, Tax Cuts, Taxes
Super Committee
Hoyer To Super Committee: Go Big, Or We'll Come Back For Round Two
The 12 members of the deficit Super Committee have been so tight lipped about their negotiations, that most of the clues about their progress come from Congressional colleagues -- most of whom are also in the dark about specifics.
At his weekly Capitol briefing Tuesday, House Minority Whip Steny Hoyer (D-MD) had a hard time pegging the panel's chances for reaching an agreement to achieve trillions of dollars in deficit reduction. But he insisted that if the panel failed to achieve significant savings, Congress will have to keep chipping away.
"People ask me, 'Are you optimistic?' I say, 'Look, I'm not optimistic -- I'm hopeful,'" Hoyer said. "I hope, because I think it's absolutely essential that we do so, that we succeed. Producing a product that is a big deal, not a small deal -- if we do a small deal, we'll have to revisit that."
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Budget, Chris Van Hollen, Deficit, Steny Hoyer, Super Committee
Occupy Wall Street
Dems In Tug-Of-War Over Occupy Wall Street
Thousands of protesters march against Wall Street and the country's economic problems.
Whether individual Democratic pols realize it or not, a battle's underway to convince them that the answer to a key question has been settled: What will it mean for you in 2012 if you embrace the Occupy Wall Street movement now?
There have been multiple polls suggesting that pluralities or majorities of Americans support of the Occupy Wall Street protests. None of them suggest directly that embracing the movement would be a good or bad move for members of either party.
So for a particular kind of political professional, a Monday email from the centrist group Third Way attempting to answer that question verged on parody.
"Occupy Wall Street -- Bad strategy for dems," the subject line read. Third Way prizes itself on dividing politics into poles and seeking a middle path between the two, so their advice came as little surprise. But it also illustrated the extent to which the Democratic party is being pulled in opposite directions on a key question this election season.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Barack Obama, Debt, Deficit, Economy, Jobs, Occupy Wall Street, Third Way, Unemployment
Defense Spending
Defense Budget Hawks To Super Committee: Not In My Backyard
The Republican and Democratic chairmen of the House and Senate defense committees are pleading with the deficit-reduction super committee to spare the Pentagon when it's looking for places to slash spending.
Both Rep. Buck McKeon (R-CA), who chairs the House Armed Services Committee, and Sen. Carl Levin (D-MI), who heads the Senate counterpart, sent letters to the super committee Friday urging, if not downright begging, the 12 deficit deciders not to touch the Pentagon's discretionary budget, although Levin suggested the panel propose a commission to look into finding savings in the military retirement and health care systems.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: Buck McKeon, Carl Levin, Defense Spending, Deficit, Super Committee
Jobs
Big, Bold And Balanced vs. Tiny, Tepid, Tilted -- Dems, GOP Do Battle Over Deficits, Jobs
House Speaker John Boehner (R-OH), House Minority Leader Nancy Pelosi (D-CA)
Listening to Congressional leaders these days, it's easy to forget that over a year ago Republicans put the budget at the top of the legislative agenda, and swamped Democrats at the polls with a simple question: "Where are the jobs?!"
For better or worse those issues are now inextricably linked. By consensus, job creation measures will have to be paid for, and doing anything substantial to help the economy now will require passing a larger and more equitable package of deficit-reducing policies than Republicans ever wanted.
Thus, the imperatives of the moment are issues Democrats want to tackle -- both for ideological reasons and out of political necessity. Their roles have flipped, in other words, with Democrats demanding swift action on the economy and deficits, and Republicans slinking into the background on both issues.
PERMALINK | COMMENTS | RECOMMEND RECOMMEND (0)Topics: American Jobs Act, Deficit, Economy, Eric Cantor, Jobs, John Boehner, Mitch McConnell, Super Committee
