When the President said he would “pivot to jobs” after the debt limit deal, I was skeptical, mainly because there was this Super Committee hanging out there that would be the subject of much consternation, negotiation and debate. That focus would get in the way of the jobs agenda and the attempts to pass the American Jobs Act.
But just a week or so after the President announced his jobs plan in a joint session of Congress, a handful of folks got together to occupy Zuccotti Park. And over the next month-plus, that has been a dominant conversation in the media, reorienting talk of the economy toward inequality and economic justice rather than deficits and debt. Eric Cantor gave a once-aborted speech on inequality, not the deficit. Republicans are signing on to a fake effort in support of increased revenues because of the hammering they were taking on tax fairness. All of this has come out of the voices of dissent across the country, motivated in part by the disconnect between the needs of the people and the obsessions in Washington that were highlighted during the debt deal.
There’s still a Super Committee, to be sure. And Stephen Moore of the Wall Street Journal late yesterday tried to float a proposal to give them something to do. In short, his idea is that Republicans would cap some deductions in exchange for making the Bush tax cuts permanent, an idea that would EXPLODE the deficit:
One positive development on taxes taking shape is a deal that could include limiting tax deductions, perhaps by capping write-offs on charities, state and local taxes, and mortgage interest payments as a percentage of each tax filer’s gross income. That idea was introduced on these pages by Harvard economist Martin Feldstein.
In exchange, Democrats would agree to make the Bush income-tax cuts permanent. This would mean preventing top rates from going to 42% from 35% today, and keeping the capital gains and dividend tax rate at 15%, as opposed to plans to raise them to 23.8% or higher after 2013.
Moore’s biases are apparent in that the top rates are scheduled to only go to 39.6%, and dividend tax rates to 20%. So his thumb’s on the scale. But keep in mind, this would be a budget buster in the trillions, with most of that money going to the rich. And that’s a deficit committee deal.
Fortunately, this is not a formal offer, and Democrats have already rejected it out of hand, according to Brian Beutler. Like the letter on revenues, these are efforts to play nice in public, not serious efforts to find consensus. The other part of this is that something as enormous as tax reform isn’t going to be tackled by 12 members of Congress in two weeks, even if the chairs of the tax-writing committees are on the panel. There was some thought to extending the deadline for the committee to present a recommendation, but that has been rejected by Democrats on the panel.
Jeb Hensarling, the co-chair of the Super Committee and Moore’s only source for his article, acknowledged in the end that “we won’t be high-fiving” each other after the work of the panel is wrapped up. He sighed hopefully that the trigger on defense cuts would somehow be dispensed with down the road. Even the co-chair can’t hide the imminent doom for his committee. Sorry, austerity class.
This doesn’t mean that all is clear. The committee could come up with a lesser solution – maybe a few hundred billion, to reduce the impact of the trigger. And we know that there are some points of agreement that would be really damaging to people. For example, the move to chained CPI, which would cut benefits for Social Security recipients, was in both the Democratic and Republican initial offers on the committee.




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Thanks for this, David. Keeping fingers crossed.
Keeping hope alive – just a little bit. Thanks, David, as usual for all the work you do to keep us informed. Really heroic.
Simpson-Bowles lives to hurt old folks another day – chained CPI! What a travesty when the facts show older folks are already doing poorly.
It’s good news, though I’d rather see the Supercommittee crash and burn in a loud and spectacular manner.
Seniors on the march.
OT-for anyone who took my advice to sell the market between Dow 12,100 and 12,180, the Dow hit 12,130 this morning and is now at 12,006. You should now place a stop to lock in a tiny profit, i.e., where you are guaranteed not to go negative on the position. You will then be playing with “house money.”
I hope you’re right. I am far from confident this austeritizing is going away any time soon but all victories are good.
first of all they are NOT “bush tax cuts” they are obama tax cuts, or more precisely, they are “the obama redistribution of middle class assets over to the wealthy” scheme
that’s the first thing, the second thing is I would be willing to lay odds it was obama that made the proposition in the first place
I am not kidding, I am going to bookmark this comment and in the future when it becomes public I will point and say “of course, he did it with the public option, he did it with drug competition, he did it with the bush tax cuts before”
I hope, I hope.
That gangsta group is illegal anyway. That is not what Democracy looks like!
OT: Has anyone had an update on the pipeline damage in the Northwest from Sunday?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/07/MNMV1LRCQ5.DTL
He keeps appointing special/sooper dooper groups of hard hitters. When one fails, he starts another.
I agree.
the stock market is rigged and gyrates on rumor after rumor. Seems to be me only the bots can make money in it
I wouldn’t celebrate yet……I don’t trust any of those crooks in DC. They will figure out a way to get us yet. We need to remove everyone of them from office. They cannot be fixed……they are damaged and need to be replaced.
Nobody has ever failed to make money taking my occasional market advice here over the past few years. The market can be read and timed, but it is not for amateurs or the faint of heart. ;-)
this isn’t tied to the supercommittee but I’d pin it as a result of OWS.
the austerity class is willing to sacrifice the bankers
http://www.nakedcapitalism.com/2011/11/taleb-end-bonuses-at-too-big-to-fail-banks.html
It appears that the really rich and really powerful are prepared to sacrifice some of their own.
Does anyone know if the CPI used for SS is the same one used for Congressional salary increases? It seems to me that SS has had much smaller increases than Salaries for our Representatives over the last ten years. In our new world shouldn’t they be tied together?
Hmm. The SuperCommittee can fail with all sorts of treachery left to do.
The demon spawn bill S. 365, has the triggers which the Congress could just modify the Pentagon’s piece and say “Hey, we just couldn’t get $1.2T, but we DID get $800M” and leave the rest of the programs including Medicare (defund by 2% per year) in a funding shambles.
Remember – they all already approved those triggers – they wouldn’t have a problem lightening up a wee bit for DoD.
Plus looming over all of that is the piece of S. 365 which has a “Debt Ceiling Disapproval” process. That will get cranked more closely to the present day, probably sometime in the 2012 cycle and start the whole S&P rating bullshit again.
Great Post. But the Bush Tax Cuts became the Obama Tax Cuts for the uber wealthy. And the Obama Tax Cuts have exploded the deficit. The evidence seems to support that President Obama wants these Tax Cut to be permanent. Then the Budget Deficit will be the excuse to impose Disaster Capitalism on the Lesser people. Of course, Obama continues to make the lesser people pay for his expensive wars and his Police State.
This is Obama’s Deficit because of Obama’s Tax Cuts for the rich.
Thank you, David, for claiming this small but significant victory for OWS. At the very least, the PTB are looking back over their shoulders, and that they have not had to do for a very long time.
They will eat their own if it increases their wealth or detracts from someone else. Egoism, envy, combined with narcissism and invidious comparison have made these people into these horrible hybrids of humanity who will actually cut off their nose to spite their face.
In the real world their salary ought to be tied to their constituencies. They ought to be making median wage for their districts or respective states. It’s ridiculous that we’re paying six figure incomes and benefits to folks who already are rich to bitch and whine about how hard it is to do the job they volunteered to do to begin with.
I think we should take them up on it.
Then make a play for the heads of very large defense companies.
The rich have certainly done the whole divide and conquer thing for years. It’s time to take a leaf out of their book.
What I was wondering was in their REAL world is their cpi calculated from different methodologies than my granma’s?
Moore’s biases are apparent in that the top rates are scheduled to only go to 39.6%, and dividend tax rates to 20%.
He’s including the 3.8% unearned income Medicare tax, which commences in 2013.
Obama got the Bush tax cuts extended when he had Democratic majorities in both houses. A pox on all of them.
Doesn’t surprise me. When the 1% have reduced the rest of the country to a postindustrial peasantry, they’ll have no one to eat but each other. And mark my words, they will eat each other.
Unfortunately, WE will be eating each other long before THEY have to eat each other. My suggestion would be that we should eat them first. ;-)
Divites este? Sounds like a plan…
I don’t think we should eat them if they are pumped full of botox.
Nothing new under the… ?
http://sathyu-sathyu.blogspot.com/2010/07/painting-pick-george-groszs-eclipse-of.html
I understand that the children are actually much more tender. Plus, you get the added benefit of heading off another generation of them.
Bite-sized pieces, of course.
A most important narrative: They are Obama’s tax cuts end of story. We need to hammer this point when Obama pushes for making the tax cuts permanent.
Don’t they always? He asks rhetorically.
Doesn’t the SS CPI exclude the cost of food and energy? So it is already false.
fuck this austerity bullshit…..greed produces bad results..
one who talks with his tongue on fire
gargles in the rat race choir
bent out of shape by society’s pliers
CARES NOT TO COME UP ANY HIGHER
BUT WOULD RATHER GET YOU DOWN IN THE HOLE THAT HE’S IN
bobby zimmerman…..
ps. fuck the horse these austerity dipshits rode to this fair too….their argument has been demonstrated, in my lifetime, to be bullshit…
go forth and due Good while attempting to cure the ills of mankind…one of which is greed……….engaging in acts of Good produce life supporting results..engaging in the opposite produces the opposite….99%
According to Politifact….
Under a law in force for two decades, members of Congress are entitled to a pay raise every year unless they vote to reject it.
For two out of the past four years, lawmakers have voted to decline their cost-of-living increase. In votes taken in 2006 and 2009 — affecting their pay during 2007 and 2010, respectively — lawmakers turned down the pay raise. In 2007 and 2008, however, lawmakers didn’t act to reject their pay raise, so their salaries increased — by $4,100 for 2008 and by $4,700 for 2009. That boosted the rank-and-file congressional salary to its current level of $174,000. (Leaders in both chambers get more.)
This should be one of OWS’s demands as we move to reform Government. Roll back salaries and then tie increases to same as percentage that SS recipients get in their cola. If you can’t afford it for the people you serve you can’t afford it for Congress.
The whole bunch need a date with Dr. Guillotine if u ask me. They’re all crooks.
Excluding food and energy. What a joke. These klowns can’t even cook the books with a straight face.
The SuperCongress seems to be an exercise in ignoring the obvious. If the Bush-Obama Tax Cuts For The Rich expire, deficits go away in short order. According to the CBO.