The deadline for the Super Committee to complete its recommendations for deficit reduction is Wednesday, November 23. Realistically, they’ve already passed that deadline, because any agreement must go to the Congressional Budget Office for scoring. I guess Monday is the real deadline for that scoring process. So they plan to work through the weekend to try and salvage something. Considering how things have gone in the previous several weeks, I don’t think the last few days will amount to much.
With just days remaining before their final deadline, members of a Congressional panel on deficit reduction made frenzied efforts on Thursday to overcome an impasse, but appeared to be talking past one another and reported no tangible progress toward an agreement [...]
Committee members and party leaders gave conflicting accounts of the talks. It was unclear if they were engaged in serious negotiations or just making a show of negotiating to shield themselves from blame if the talks sputtered to an end without agreement [...]
Democrats said they had radically reduced their demands and would go along with the Republicans’ latest proposal for $401 billion of additional revenue over 10 years, down from the Democrats original proposal for $1.3 trillion.
But committee members do not agree on how to measure new revenue. Republicans would permanently extend the tax cuts that were adopted in 2001 and 2003 under President George W. Bush and are scheduled to expire at the end of next year. Democrats would defer a decision on that issue and raise the new revenue by limiting or eliminating various tax deductions and credits.
So Republicans said “we will only increase revenue by $400 billion.” Democrats, after some hemming and hawing, said “OK, here’s a $1.5 trillion plan with $400 billion in tax increases, $800 billion in spending cuts and $300 billion in interest savings.” Republicans said “but we also want to reduce taxes by $3.6 trillion by permanently extending the Bush tax cuts.” And there’s your state of the talks.
John Boehner lied and said there’s been no actual Democratic offer on the table. Democrats said the ball was in the Republican’s court on revenue. This looks to be over, except for the blamestorm. Expect Republicans to accuse Democrats of hurting the troops and setting the country up to be killed in their beds by Terrorists, expect Democrats to… I don’t know, make a speech about Republicans not living up to their commitments. But it will be a biting speech!
Regardless of that asymmetrical warfare, I agree with Paul Krugman that failure is the best option at this time.
For one thing, history tells us that the Republican Party would renege on its side of any deal as soon as it got the chance. Remember, the U.S. fiscal outlook was pretty good in 2000, but, as soon as Republicans gained control of the White House, they squandered the surplus on tax cuts and unfunded wars. So any deal reached now would, in practice, be nothing more than a deal to slash Social Security and Medicare, with no lasting improvement in the deficit.
Also, any deal reached now would almost surely end up worsening the economic slump. Slashing spending while the economy is depressed destroys jobs, and it’s probably even counterproductive in terms of deficit reduction, since it leads to lower revenue both now and in the future. And current projections, like those of the Federal Reserve, suggest that the economy will remain depressed at least through 2014. Better to have no deal than a deal that imposes spending cuts in the next few years.
(Check that op-ed for his veiled swipe at Tom Friedman for being too stupid to pick up the phone!)
Monumental issues of taxes and the social safety net should not be handed over to a secret cabal of 12 legislators. It should be determined in a public debate and deliberative process. And if possible, an election. Looks like that’s what we’re going to get.



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At this point, I agree with Krugman, it’s time for some “tough love’ and a dose of reality. It’s not the deficit, stupid, it’s jobs.
SC stands for shaft citizens. it seems the only problem is one side want to do more shafting than other.
I think bush tax cuts are a ploy because i heard grovner on morning joke ( i think it was MJ) saying let bush cuts expire would not “technical’ be a tax hike as it would not be raising taxes and so repubs would not have broken his pledge. So the repubs might pull this off the table and dems say it was the best deal they could get
From what I heard on NPR yesterday, it sounds like the 12 haven’t even been able to agree for some time now to be in the same room together.
Why do the American people reward our political leaders for acting like children?
In any event, we can all be sure that the interests of the 1% will be served. So no one panic!
The whole thing is another example of Obama’s tendency to do end runs around the legislative branch.
It’s unconstitutional and it’s behind closed doors even better than the stupid Simpson/Bowles idiotocracy was.
So,of course, no one knows that it was Obama who got the ball rolling on the entire debt/deficit question and they think he’ll protect us from those nasty republicans, when it was him who threw the entire safety net on “the table”. ( I know, preaching to the choir)
I figure the most work our government does ( besides spy on us) is laugh at how well they’ve fooled so many.
by E. R. Bills and Scott Conner,
It’s hard not to cringe when people talk about the 90% income tax rate on wealthy folks under President Eisenhower. Or the 75% income tax rate on the well-off under President Nixon. They seem outrageous and unfair, almost un-American. But the economies under both these Republican leaders (and especially Ike) were vibrant and prosperous. The United States was winning, and higher taxes on the wealthy played a big part.
I know the very mention of taxing “job creators” cuts conservative flesh and victims will scurry to flat-screens for the salve of countermanding Fox News talking points, but hear me out. We’re being had and this is no time to gather up our toyed-with stances on this issue and run home.
Eisenhower and Nixon weren’t taxing the rich to punish them; they were taxing them to build the economy. And wealthy folks who were highly taxed still got handsomely rewarded.
“How?” you ask, hardly masking your incredulity (if not outright contempt).
Deductions.
When the wealthy and well-off in this country were taxed at such exorbitant rates under Eisenhower and Nixon, they didn’t pay exorbitant taxes. They utilized every deduction and write-off in the book. Like any other red-blooded American entrepreneur, they wrote off everything possible and rewarded themselves and their companies every way they could. They bought new equipment and increased their business’s assets. They paid for company vacations, yachts, vehicles, etc. They gave out extra employee bonuses. These expenditures were all tax deductible investments that essentially constituted back-door rewards. Higher taxes didn’t punish the wealthy because they didn’t pay them.
Higher taxes led to greater deductions. Greater deductions led to increased investment and commercial expansion. Increased investment and expansion created higher GDP.
This is not rocket science. Where our overall economy is concerned, higher taxes create greater investment and lower taxes achieve exactly the opposite.
Lower taxes reduce deductions. Decreased deductions stifle spending and subdue investment. Lower taxes enable wealthy folks to sock away their profits instead of investing them in the economy. Put simply, the most effective way to shrink the middle class is to allow the wealthy to hoard the profits they’ve garnered largely from the backs of the middle class.
Higher taxes will never force the Tea Party’s capitalist “Atlases” to shrug—they’re already being allowed to shrug by lower taxes. And the ridiculous Grover Norquist anti-tax chastity pledge is simply an iatrogenic measure that further endangers an already reeling patient. It keeps investment and spending low and misery high.
I am not wealthy, so this isn’t going to be a Joe the Plumber mischaracterization. I am involved in a small business. If we have a good year and it looks like we’ll have to pay more taxes, we simply buy a new company truck or computer or some other useful piece of equipment or inventory. The company I work for still pays taxes, but also pays itself. The write-off is our reward and it puts money back into the economy. The better we do, the better the economy does. Every good businessman (or woman) knows this.
If we’re truly in this together, trying to get this country back on its feet and move it forward, aren’t higher tax-spurred deductions a good thing?
They worked for Ike, and he had WWII to pay for.
The anti-tax mantra is anti-progress in terms of the problems we face. The burgeoning deficit will not be reduced by lower taxes. The middle class will not be restored by lower taxes.
It’s time to look to the Greatest Generation for solutions. President Eisenhower’s higher taxes forced the wealthy to spend instead of hoard. Higher taxes today would do the same, and the wealthy would still be wealthy.
We can thank Grover Norquist. *g*
If there ever was a red-herring, straw man argument, the ‘can’t tax the job creators’ is it. IT should be clear to everyone at this point that the strategy of the monied class is to destroy any semblance of middle class status and send us into a neo-feudal fiefdom with ‘democracy’ as a potemkin-esque window dressing. It is disheartening and even a bit frightening to see all the rubes so easily fooled by the charlatans that would sell out the futures of the many for the hedonistic few.
BTW, Grover fucking Norquist is a seriously fucked up Douche-Bag. I can’t even help but pick on his name, even though it is so juvenile.
Krugman used to quip that the United States government is essentially an army attached to a huge pension fund. The PTB want it to be simply an army.
I got an email yesterday from my Senator, Richard Lugar, bragging that Grover Norquist has endorsed his (Lugar’s) introduction of legislation (S. 1873) this week that would provide economic incentives for businesses to invest and create jobs.
I immediately trashed the email, since I’ve learned that it’s fruitless to respond.
The model goes back to slavery. The masters provided slaves with jobs. New times, new language.
… expect Democrats to… I don’t know, make a speech about Republicans not living up to their commitments. But it will be a biting speech!
Reinforced with a sternly worded letter, for emphasis.
I don’t think that’s exactly the quip, but close. I’ve googled and I can’t find it. He has repeated it more than once.
Yay! I can’t wait to get my helping of fat-back and creek water.
lol…if you all dont understand that a deal IS ALREADY DONE then i guess you have as much value as the tea bags.
you WILL see the republicans get everything they have asked for because it is also obamas position.
remember this..obamas goal is to make sure the democrats lose the senate just like the house while he manages to squeeze out a victory for himself.
i can hear you all non believers (always the same people)saying this is crazy talk..even though i am batting 100% in my predictions.
so just keep watching and making comments and watching tv and drinking beer or…etc etc etc………….
“Why do the American people reward our political leaders for acting like children?”
How are we rewarding them? (…and I’m not trying to be snotty here) Congress has a 9% popularity rating, but our so-called representatives are still in office and have every prospect of returning to office in 2012. Even if we can’t stand who we have, the corporatocracy will see that the current crop, or a reasonable facsimile, will be returned to office.
Yes good on you. But if it wasn’t for the tax pledge R’s signed they might have gotten a grand bargain. *g*
Free Beer!? fuggetaboutit all! See, we serfs are after all pliable.
As some of my southern friends like to say, slavery wasn’t all that bad, because massa provided. I wonder how they’d react if massa was providing for them after an 16 hr. day in the fields, swamps and work houses? The Germans had another way of saying massa provides. They posted it over every slave labor camp to mock “the socialists” that had once used this slogan as a banner for their movement. “ARBEIT MACH FREI” Work will make you free.
I think maybe non-native German speakers got this backwards. English has this curious habit of putting things in reverse to the Romance and other European languages. So if we reverse it appropriately, it actually means “WORK FOR FREE” or “WORK FOR FREEDOM”. Surely not even the Nazi’s, though they have unwittingly written the Fox News playbook, could have been that intellectually dishonest to think they could fool prisoners into believing a concentration camp was their bastion of liberation.
I must be mellowing. Now I just want the SC to eat a worm and get violently ill but I demand a surcharge on the air they breathe. Near as I can tell its a waste of resource.
Peace
That would be an improvement over anything they’ve done since. I took this argument, that higher taxes drive investment and expands GDP to about MBA students from Harvard, Wharton, Kellogg, Stanford and Columbia and they couldn’t refute it. Why can’t the democrats, why can’t some one, EVEN ONE economist make my argument?
One question David: How does the general cabal called the US congress differ in any material way from the mini-cabal called the Super-Committee? Both the whole and its subset are fully committed to extending tax cuts and other advantages to the one percent and screwing the 99ers. Would the grift be any more legitimate if the entire congress deliberated on the details? My guess is that this is the way they generally do things at Foggy Bottom.
There is a public record of the bigger cabal, this is really a distinction rather than a difference so your point is still valid.
Raising taxes when the unemployment rate is 9% seems about as stupid an idea as I have ever heard.
Just got this from the senior citizens league. I have no idea if it’s true. If it is, they’re trying to kill us now, not just rob us.
petiton
As far as Im concerned, what the Super committee does is going to be a signal for just how corrupt the government has become. Like Sanders said. It is two wars that cause the deficit and the rich have never been richer. If they balance the budget on the backs of the sick and elderly and the kids then we know just how sick and worthless representatives are. I know these people will serve their masters and expect us to just believe in some slimy gimmick that offers us basically nothing. Some gimmick that we’re suppose to lap up. Well, I hope they piss everybody off. Occupy is going to get so strong that they will be begging us to stop.
The rich aren’t the unemployed, geniass.
job creators. genius
less money spent on automobiles, dinners out, vacations, retail shopping etc etc etc.
Why parade your ignorance here, where people generally know what they’re talking about? The taxes in question are the Bush tax cuts for the millionaires/billionaires; his “base”; not you or anyone making less than $250,000 a year.
In fact, if the Bush tax cuts were allowed to expire it probably wouldn’t even affect the crowd in the 6 figure bracket.
After all this time if you don’t know this, go study up on it.
Willful ignorance is NOT bliss.
Then where are the jobs? They’ve been given everything they could want and they ship them overseas on YOUR dime.
They don’t WANT to create jobs except for slaves,
Do go away and take your blithering ignorance with you
Kassandra, don’t parade your ignorance here.
The “rich” won’t spend or invest if they feel like there is a tax hike hanging over their head. If you thought you would be losing your job in the next couple of months would you run out and build a new house? Of course not. Make the tax cuts permanent. Put some certainty into the economy.
Excuse me, I couldn’t quite make that out over the sound of Rush Limbaugh bellowing like Jabba the Hut in the background. Could your repeat that?
your debating skills are very very limited if that is the only way for you to refute my comments. Nice work simpleton.
Oh, your going to tell me you don’t get the shakes if you miss a day of listening to the claptrap of Hannity, Limbaugh and Glenn Beck? Yeah right.
keep digging that hole. All you are doing is demonstrating your ignorance on the topic.
All you are demonstrating is that you can Parrot-out right wing talking points. At least tell us some claptrap we haven’t heard before, not how ‘taxing the job creators’ will sink the economy.
For 30 years Congresses have been cutting taxes. 30 years we see the very wealthy become ridiculously wealthy. 30 years we see the middle class shrink as high paying jobs are outsourced and real income stagnates for those who haven’t got their pink slips. 30 years of egregious financial crimes and deregulation ensuring few will ever suffer a penalty for massive larceny and fraud.
This is the America you would have continue to eat itself like a cancer.
But it is obvious that all you can do is hurl insults and have little if any command of the facts and claim others to be ignorant while offering nothing but rhetoric for your part. You about as useful as a trained monkey.
P.S. Say hi to Dick Armey and the Koch brothers for me. Tell them to quit funding Nova. It is a good program and I get ill every time I see David’s name come up in the opening credits.
The idea the middle class and poor have gotten worse off is an absolute joke. You are so fixated on the distribution of wealth in this country that you haven’t bothered to look at the growth of the overall pie. The middle class is far better off today then they were 30 or 40 years ago. Look at the average middle class household today vs 40 years ago and tell me they aren’t better off.
Why is anyone wasting there time arguing with a right wing troll like Backeast? You’ve got a better chance convincing your dog that a bath would be in his best interest.
Your remark presupposes that the effective tax rate changes under higher tax rates, history suggests that’s not true. Under the Ike and Kennedy tax rates which ranged from 94-70%, the effective tax rate never changed much from 20%, even today that figure is remarkably similar (17.5%) So, we’re left with the question, what happened to that money? Well, the simple answer is that money fled into deductible avenues–again those are Employee Benefits, Expansion, New Equipment, R&D, Advertising–all deductible business expenses. Considering Corporations are sitting on $2 trillion in profits, taxing those profits is exactly what’s needed to encourage them to engage that money into the economy.
don’t forget the impact of the Bush tax cuts and the medicare part D expansion that he passed but didn’t try to fund.
You really don’t get it. We can have the rich squander their uncontested earnings on golden shower curtains and trash bins, or we can force the companies to spend that money in a more directed and productive manner. Fewer Mercedes and perhaps more delivery vans.
Increase their tax burden to 2/3rds and they will have a hard time justifying taking that pay. If corporate taxes on profits increased, these firms would be looking for more domestic deductions, to avoid the taxes. In fact, it’s low taxes that reward the executives for selling off factories, looting pensions and the like. As we state in the paper, the rich are Shrugging now, under low taxes, though under high tax rates they didn’t.
What everyone forgets is that there were TONS of tax shelters and deductions that are not around anymore. Most high income people avoided taxes very regularly.
So, 90% usually was far less.
As I predicted here long ago, and a few times, when others were so worried about the Super Committee:
THEY WILL DO NOTHING.
And, that is exactly how it is.
Bowles Simpson; all kinds of teeth grinding and hand wringing. Same thing, I said don’t worry, nothing will happen. And, nothing did.
Congress, and the Presidency, are like a number of households. Until the electric company turns off the juice, they won’t pay the bill.
The tax code needs to be changed so that corporate tax rates and deductions for each taxable year are tied to unemployment, adjusted for inflation. In times of high unemployment, tax rates are low and deductions for new hires, plant and equipment are higher. In times of low unemployment, tax rates go up and deductions for new hires, plant and equipment go down. Capital gains rates should be the same as earned income, unless the investment is in corporations that are certified by the IRS as “domestic manufacturing” companies (companies that manufacture 100% of their goods here in the US using materials and components, 50% of which are also manufactured, mined or processed here in the US!). Tax rates for forgien manufacturing companies should be through the roof!