It wasn’t looking good for the boys in blue states as of last night. Their gentlemen’s agreement on filibusters had officially collapsed. Then Republicans reversed course, allowing votes today on competing budget plans, after they arm-twisted all their members into supporting the Republican version. Joe Manchin (D-sort of) blasted the leadership for failing to show, well, leadership. The $6.5 billion in spending cuts they put on the table as a first offer were valued at $4.7 billion by the CBO. And it looked like the country would soon slip into a government shutdown. The House readied another short-term stopgap that would probably take the $4.7 billion in cuts and then negotiate over more, so this whole shame spiral could start over.
And then a funny thing happened. Democrats did something strategic.
Senate Democratic leaders, seeking to break an impasse over Republican-backed spending cuts, on Tuesday proposed broadening the scope of budget negotiations into more politically volatile terrain that includes taxes, subsidies and entitlement programs.
Senate Majority Leader Harry Reid (D., Nev.) said that efforts to bridge the parties’ $50 billion difference in proposed budget cuts for the remainder of fiscal-year 2011 could reach beyond domestic discretionary spending and move into tax policy and programs such as farm subsidies.
“There are other places we can move to bring about some cost savings,” Mr. Reid said. “Domestic discretionary, defense, mandatories, revenues.”
Sen. Charles Schumer (D., N.Y.) is expected to echo that suggestion in a speech Wednesday and argue that tens of billions of dollars of deficit-reduction measures could be found if budget talks are broadened.
What you have to understand about this is that Republicans are frauds. They don’t want to cut the budget deficit, they want to cut programs that liberals like. Nothing we’re arguing over in this budget fight costs even 1/10th as much as the tax cut deal from last December. So Republicans will not want to broaden the conversation. That would mean they’d have to reduce subsidies to their favorite industries, or cut defense spending, or (gasp!) raise revenues.
In a political sense, this works for Democrats. They now get to say that their counterparts on the right are not serious about the budget. Because they’re not. They’re trying to balance a 40% gap with 12% of the spending. If the bluff is called, a longer-term deal at least spreads out the spending cuts over a number of years, and will be a lesser short-term shock to the economy. This also would lessen the constant hostage-taking on this or that piece of the budget as the years go by.
Obviously it matters what is involved in that over the long term. But this looks like posturing, and as posturing goes, it looks pretty effective. Furthermore, in a broader debate, the public is on the right side:
Almost 8 in 10 people say Republicans and Democrats should reach a compromise on a plan to reduce the federal budget deficit to keep the government running, a Bloomberg National Poll shows. At the same time, lopsided margins oppose cuts to Medicare, education, environmental protection, medical research and community-renewal programs.
While Americans say it’s important to improve the government’s fiscal situation, among the few deficit-reducing moves they back are cutting foreign aid, pulling U.S. troops out of Afghanistan and Iraq, and repealing the Bush-era tax cuts for households earning more than $250,000 a year.
Now that’s a budget that makes sense. And that’s the terrain Democrats seem to be moving toward.





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“Raise revenues”? Or in other words raise taxes. A rose by any other name and all that jazz.
How about this, instead of an income tax we institute a Net Worth tax, that way all those people such as Michael Moore who preach about the “people’s money” can put their cash where their mouth is.
Raise taxes? Or in other words, raise revenue.
This is a weird word game you are playing.
Also, Michael Moore would pay more money if we raise taxes on income or wealth. And he supports people who are wealthy, including him, paying more. (So, for record, do large majorities of the public.) So I am curious how you think you have nailed him.
Yes, it is time for us Americans to escape from the Land of Oz, pull back the curtain and expose GOP for the frauds and fakes that they are.
I do disagree with Sen Manchin, however. I do not think it is Obama’s job to lead the Senate too. He has enough on his plate, he should not have to do their job too.
David – I am pretty sure I do not want Senate Democrats to put so called entitlements on the table in a game of chicken with Republicans. They want to cut them, and they know they cannot do it without the cover of support from the Dems. And too many Dems want to cut them too. Reid has been saying the right things, for the most part, but his has been a lonely voice.
So while you are right that they are doing something strategic, it is unclear whether they are trying to outflank the Republicans or us.
Ds’ broader budget talks: cut SS, Medicare, Medicaid, welfare, taxes on the wealthy & corps.
If more people were working, revenues would rise. It’s not necessary to increase tax rates to increase revenue, increasing the number of taxpayers is effective.
What is the Republican plan to increase employment?
since when did politicians listen to what the people want. They get elected on a platform and then break promises.
Nothing happens. I am not sure why people even listen to what politicians say they will do when they get elected. how many campaign promises have to be broken over and over again, before people wake up and see it is all a sham. There is no dems vs repubs. They are one party fueled by big money and doing their masters’ bidding.
In order to consider raising taxes, congress would first have to admit that there is a revenue problem more than a spending problem. The republicans will never let that happen. It is the polar opposite of their hysteria of the day talking points.
Thanks for the post, David.
It’s sad that the Democrats sit on the same neoliberal place the Republicans occupy. But the Senate Dems are trying to slow a bit the GOP effort to destroy the country.
Yes. The eminently logical thing to do, and in fact what was done during the Great American Prosperity, which produced the greatest economic boom which humanity had ever seen. All with 90 % tax rates on the rich, and even after deductions and loopholes, 60-70 % effective tax rates.
Be careful what you wish for. Because I’m sure that Moore would support that idea. He supports higher taxes on the rich.
Do you really think that with 5 % owning almost 60 % of America (and that was back in 2004), that such rates be hitting *liberals*? I think you need to go back and review your notes.
stewartm
That’s a joke, right?
Glad Reid found his balls. However, he needs to STFU about entitlements to citizens via SS, Medicare, and Medicaid. I am just wondering after that HB Gary scam how much our government is paying these private groups to use military hardware on Americans? Can we not cut that out completely? What is wrong with those short sighted Dems in DC?
Considering the right’s ability to frame all political discussion, what ever happens will be spun to their advantage.
If nothing gets done at all, it’ll be spun as the democrat’s fault, if anything positive passes in the face of republican opposition, it’ll be spun as more damn liberal agenda, necessitating yet more push-back from the right.
We’re going to have to face the facts sooner or later that our government is a criminal enterprise and it’s going to take a giant crowd visiting Washington to even begin changing that reality.
Those waiting for the democrats to start fixing this situation are waiting for Santa or the Tooth Fairy.
Trying to think strategically about the entire budget–including revenue and encompassing all spending–is encouraging. However, I do note that Dem leadership has become very good at pulling defeat from the jaws of victory. Oh go ahead Charlie Brown, kick the ball, I promise I won’t pull it away at the last minute…
This place doesn’t run on air.
What’s it gonna be?
Friend?
Benefactor?
Gosprey?
7:18 was to Rafe, the feudalist.
The repug minority went two full years on, “NO!”.
The Dems are giving hints daily on how they can be buckled.
Yes.
Rafe, during the Eisenhower administration, the top federal tax bracket was north of 90%. Since 2002, the top federal bracket has been 35%. “Trickle down,” doesn’t work.
Yup. Just watched “Inside Job.” The piece noted that there are five (count ‘em, five) financial industry lobbyists for every one member of Congress. Obviously, this does not include the lobbyists for all manner of other industries.
As the late, great George Carlin noted: There’s a Big Club…and we ain’t in it.I would add that the only way that’s going to change is for everyone to get on the same page about that reality. People pushing back in Wisconsin is a very good sign.
Suck it, Governor Wanker (and your Koch buddies, too…)
Exactly! Plus, if America had full employment at real living wage standards, the income tax revenue would rocket up and the SS issue would be mute. Oh, and if the Feds paid back what they took out of the SS funds there would not be an issue either.
Um, guise, are you sure this is good news? To me this just opens the door to Social Security cuts for generation X (you’re welcome, baby boomers! We were happy to pay extra payroll taxes our whole lives!).
Senate Dems desperately want to do entitlement “reform.” They will act like its the only choice to save the precious programs, and this will make thge tax cuts permanent.
Don’t you see the shell game here? It’s not just that they’re going to cut Social Security. DEMOCRATS are going to cut it, and REPUBLICANS will say that they “tried” to cut benefits for the lazy instead.
So gross.
D-Day posted this a few days back:
The Troll tries to change the discussion to “net worth tax” (um, I think that’s what we kinda do when we calculate our tax returns, eh?) and throw out the hated Michael Moore. Shiny object! Evil elitist liberal star! Change tax code completely! Pay no attention to that man behind the curtain!
Gotta be getting paid for posting, it can’t possibly be under the illusion that such a weak set of “arguments” might win any converts around here. Sad, really, like watching anybody from the PAC 10 in this years tournament.
If Obama and the Dems start that bit about “hostage taking” crap again it will be the end of them. They need to become the party of NO.
Watch that blaming baby boomers shit. We have been paying more than was needed for decades. That is why there is 2.4 TRILLION in surplus in the SS fund.
Convenient that “good” rich people such as Moore advocate higher taxes on the rich, now that he has $50 million stashed in the bank and safe from further taxation. I have a feeling that if his banked monies were retroactively taxed at the higher rates he is advocating, Moore might have a change of heart.
That being said, the U.S. federal government openly invites Americans who want to voluntarily contribute money to do so, you can simply write a check. You think Moore has done this, if not, why not?
Definitely! Shown by the panty wad about FDL membership. LOL!
Do you have a link? Where does the US accept extra income tax dollars?
The USG budget will work out in the typical disaster capitalism fashion would be my prediction. Govt shutdown will be used by Ds as a reason to get serious about spending reductions, so they will cut SS, Medicare, Medicaid, welfare, other programs for the poor & middle class.
Then taxes will be cut on the wealthy and corps to “create jobs.”
All the rest is kabuki.
Hes’ just another paid Kock-head. It’s been amply proven that they give people like this several IPs and turn them loose. they probably don’t even believe what they’re saying.
“Trust not the the princes of this world, for they will frigg thee up even to the ends of the earth” – Woodie Guthrie
Yeah, they did that all last year and made a huge to-do about it in December with Obama!
Haven’t they already done all this?
You not pay taxes on the interest on your bank account? I pay it on mine.
So does Moore.
So the Repugs can give less to the those who need it, and more to the oil companies? (Which they just did).
(Say “hi” to David and Charlie for us)
stewartm
Caught the tail end of your privacy invasion talk last nite. So sorry to hear that. Hope it all gets fixed.
I know. They give them money and the talking points.
In fact, in 2008, I know a young online acquaintance (jobless at the time) who was being *paid* $10/hr to canvas for the Republican Party as a “volunteer”. They’ve been paying their “volunteers” for some time now for GOTV efforts and to man the phones.
No wonder the Repugs don’t like jobs. It reduces the number of those desperate enough to do anything to make a few bucks.
stewartm
Your position is neither defensible on the merits or the politics.
If given the choice, Americans will demand that the uber rich and corporations pay their fair share in taxes, no matter how many progressive individuals you vilify through nonsense. No doubt that is why you prefer to have a different conversation.
For everyone else: We ought always to pay attention to which arguments the trolls try to distract us from. They know this one is dangerous, which is why we need to stop talking about different levels of spending cuts.
Exactly. The best predictor of human behavior in the future is that they will do the same thing they have done in the past.
The rich & corps still pay a little bit in taxes. Those will have to go.
Seriously, how difficult is it to use a search engine.
http://www.fms.treas.gov/faq/moretopics_gifts.html
How do you make a contribution to reduce the debt?
http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance
Scroll all the way down to the bottom.
At what rate and in what amounts, 90% or above? Less than the amount you earned in interest? Would you rather have $50 million in the bank and pay taxes on interest or not have it at all?
Well not you perhaps, but Mike Moore and all the other good rich people advocating higher rates.
ROFL
Mike Moore = progressive.
So progressive that he denied union workers the chance to work on his film, and sued a movie studio to get an extra $2.7 million from his last movie that he thought had been denied him. When is enough enough?
Do you get paid by the hour or the day? Also, did you ever talk to Koch about the Manning issue?
I’ve always loved the hypocrysy of how the Republicans insist that everything be on the table and then without a sense of irony refuse to talk about raising revenues.
Shared sacrifice for Democrats and their programs, not Republicans!
Um, they do need to, but they aren’t going to. Obama and Senate Dems have their own agenda, and it is pretty much the same agenda the republicans have, except for homos.
Read Obama’s debt commission report (once again, OBAMA put together that panel, OBAMA supported their conclusions, as did many Senate Dems). That is the blueprint. There is NO reason to believe they won’t follow it. THEY JUST NEED THE POLITICAL COVER TO DO IT.
It will be exactly like last fall. “Gasp! We have no choice! As much as we HATE enriching the wealthy with the payroll taxes of workers…choke…sputter…”
Depends on how much you have, and how much interest it draws. Interest income is taxed just like wage income.
However, few rich people have their money ‘in the bank’. The interest rates are too low, and the tax rates too high, compared to putting it somewhere where its gains would be classified as ‘capital gains’–where if you don’t cash it out for one measly year, it’s taxed at only 15 %!
That’s how and why billionaires now pay a lower percentage rate on their taxes than do their secretaries. That’s why CEOS take the bulk of their ‘compensation’ as stock options (capital gains) rather than as wages.
Careful! You’re close to giving an argument that would undercut the ‘poor lil’ rich people’ shtick you’re supposed to hew to.
stewartm
True, but at least baby boomers will get full benefits. Our generation is screwed. Also, our generation didn’t have very good health care growing up, so we will probably all die sooner. Which should help gen Y with their deficit problems. By then income taxes will probably be gone, altogether replaced with 50% payroll taxes that are capped at $1m a year. I hope we aren’t still pretending we’re a democracy by then. Aristocracy has its problems, but at least entailed rights included some responsibility to the less fortunate.
He has no idea that he pays more taxes than they do. He does not understand capital gains and 11% tax rate, only if left in the US system.
Off shored– NONE!
Not quite. Here’s the original article that contains that charge and which has been cited by the rightwing press (Mind you, it’s at times critical of Moore, and also the article cites a Mother Jones piece critical of Moore).
http://www.newyorker.com/archive/2004/02/16/040216fa_fact7?currentPage=all
Unlike you’se guys, we don’t give our own a free pass.
stewartm
When is that sacred cow, the defense budget — specifically the wars, troops stationed overseas, and gigantic embassies [e.g., Iraq] — gonna be on the table?
So you’re so desperate to steer the conversation off track you’re at the point of insisting that someone who calls themself a progessive (Moore) shouldn’t be allowed to use the courts for redress? Because…that’s not progressive or something?
Also Moore uses union workers for all the jobs in all of his films except for one: stagehands, because he doesn’t feel the stagehands union respects documentary films. His prerogative, do you disagree?
We can continue this in a thread about the evils of Michael Moore, who you inexplicably brought up in the first post in a thread about the current budget conversation. Are you going to start ranting about the tentacles of Soros next?
And your point is?
You say that like raising taxes is some sort of self evident evil.
You can only cut so much before the government stops functioning, which really is the goal here, not fixing the long term budget.
Rafe did you know this?
The more Americans that are on food stamps the more profits that JP Morgan makes. Today, an all-time record of 43.2 million Americans are on food stamps, and JP Morgan is making a lot of money processing millions of those benefit payments.
is this good for the USA Rafe? your buddies yet again benefit from making Americans poor.
I know you love the USA military.
Did all of those brave USA soldiers die in all those wars so that the Koch Brothers could live like kings, and the other 90% of Americans could live like slaves?
According to former U.S. Labor Secretary Robert Reich, the wealthiest 0.1% of all Americans make as much money as the poorest 120 million.
Rafe do you care about the poorest 120 million Americans at all?
Rafe may be Old Gold?
Evil usually hangs together.
Rafe attack on Michael Moore “43″ clearly shows he is a hack for some GOP attack group. Info like that just does not come out of the blue.
Rafe? you mess up with that attack, as Michael Moore would say, you over reached. :)
Are you sure you know what the structural (full employment) fiscal surplus is? I doubt that it’s a surplus. We have a deficit at full employment. We ran big deficits at so-called full employment under Bush. Taxes are too low.
I’d love a net worth tax. Any half-way decent accountant can get your net worth to zero (or below zero) by creative re-assignment of liabilities and assets. How do you think the big banks end up paying no tax?
Rafe, (Edited by Moderator: Politeness counts, please) There are people on this blog who actually know this stuff as part of their professional training and responsibilities. If you want to pee your pants in public, I suppose it’s your right. But you ought to understand that everyone sees the yellow stain down the front of your pants.
The rich are undermining the very foundation that allowed American wealth to be created in the first place.
I’m finding the Republican budget process to be an interesting insight into the fracturing Republican coalition.
The social conservatives want to target specific agencies and programs, like Planned Parenthood. The libertarians want to burn the whole place down and pay no taxes at all. The Aristocrats want, and are willing to pay for (if they’ve squeezed the peasants too much to make them pay instead) enough government to “maintain order”, enforce contracts, and fight wars for oil. The NeoCons want unlimited military spending so they can conquer the world. Everyone (Democrats included) are in the pocket of lobbyists who are looking for government subsidies and contracts.
In the “good old days” they could try to give everyone in their coalition what they wanted and paper it over with deficit spending. Now the deficits are truly staggering, and the debt is huge. The Fed is now the largest holder of US debt, and is pretty much monetizing the deficit. That’s never worked before, and it won’t work this time.
So, now what? They make a big show about cutting tiny amounts of targeted social programs, and try to wave their hands about how it’s all the Democrat’s fault. There is no solution which will placate their entire base any more. They can pick any one part (they will pick the Aristocrats), but everybody else will be unhappy, and demographics dictate that they can’t lose any votes and still be in power. They are playing futile politics while the country burns, and they really don’t have a way out.
I am utterly unconvinced that the Democrats will be able to capitalize on this, but the possibility exists. There is no solution without raising taxes, a lot, on those who can afford it. The money exists, we are allowing the country to burn so that 400 families can hoard it. That’s a winning message. No amount of Citizen’s United cash can overcome it.
You are correct just increasing the number of people working will not bring down the deficit, especially when most of those new workers will be making $505.00 per week.
gvandergrift? is a sneaky little troll
he or she has a way of avoiding the obvious
Knut
According to former U.S. Labor Secretary Robert Reich, the wealthiest 0.1% of all Americans make as much money as the poorest 120 million.
Knut if we raise the taxes on the wealthiest 0.1% this would help bring down the deficit. and yes this would be the American thing to do.
Me Thinks the wealthiest 0.1% does not put their sons and daughters in harms way, few ever serve in the USA military. Let us not forget Mrs. Dick Cheney or as we call Mr. 6 Deferements
look up the word Chicken Hawk and you will see a photos of Dick Cheney and a lot of Wall Street Bankers
Raise revenues”? Or in other words raise taxes. A rose by any other name and all that jazz.
Since the current maldistribution of wealth seriously favors the moneyed class, why shouldn’t they pay more?
http://www.flickr.com/photos/37566903@N02/5500300007/sizes/l/in/photostream/
And in business if you believe in flattening or depleting your topline revenue on a long term basis there is an ultimate solution for you—bankruptcy. That paradigm isn’t any different for government, either.
If you took Voodoo Econ 101 go back to your educational institution and demand a refund. This theory is fraud and we don’t need any more fraudsters in our society. We have a whole political party named after fraud—called the GOP. And they don’t like competitors.
I said nothing about deficits and nothing about surplus. I said the gov would have more revenue if more people were working. Thank you for your careful reading.
Thank you for posting without misspelling the word “phony.”
I’d guess you are one of the least influential posters on this site.
selise asks again for a broader conversation, here at fdl news, to expose the DEM Deficit Frauds as well.
No response to either request. Why is that?