Obama’s asking for it; maybe the GOP should give it to him
It appears more and more likely that Washington’s new favorite drama, the fiscal cliff, will run as long as possible.
Passing new legislation before Christmas to avoid the cliff — the doomsday nickname given to the combination of across-the-board spending cuts set during last year’s debt-ceiling negotiations and the total expiration of income-tax rates that have prevailed since since 2003 — now seems unlikely. House Majority Leader Eric Cantor on Wednesday said lawmakers can expect to be in Washington during December’s final days.
The fatal conceit in this debate is that the economy will somehow be well-served, or at least survive, if it takes only a half-dose of what Democrats consider poison (spending cuts) and a half-dose of what the GOP deems deadly (tax increases).
If either party is correct, we are in for a rough 2013 at the very least. If both parties are correct, we could be heading for another recession. The irony is that we’re trying to avoid the fiscal cliff in order to prevent … a recession.
Only President Obama has proposed a pure version of his preferred course: A $1.6 trillion tax hike on upper-income earners over the next 10 years, recently reduced to $1.4 trillion, with no guarantee of net spending cuts. The House GOP’s opening salvo had much more of the “balance” Obama insists on.
Many observers have dismissed the president’s proposal as a mere negotiating stance. Perhaps they’re right. But one presumes he wouldn’t have made a proposal he wasn’t ready to accept.
That is, one presumes Obama really believes taking an extra $140 billion out of the economy each of the next 10 years — remember, he says the money is for deficit reduction, not to fund new government spending — would not be harmful to businesses, workers or the unemployed.
Members of Congress are supposed to do what they believe to be in the best interests of the country and their constituents. But if House Republicans cannot persuade Obama to agree to meaningful entitlement reforms, which along with more rapid economic growth are the only way to bring our fiscal house in order, they should consider giving Obama what he wants.
This is not a decision to be taken lightly. But Republicans might not win this policy argument in the long run if Obama can pin the blame for economic damage on GOP spending cuts, while continuing to demagogue the rich for not paying their “fair share,” without consequences.
And there would be consequences for following his plan. Today, $140 billion equals almost 1 percent of gross domestic product. When the economy is struggling to grow by an annual rate of even 2.5 percent, taking another 1 percent of GDP out of the private sector will not help matters.
But what about the 1990s? Didn’t Bill Clinton raise taxes back then, only to watch the economy boom?
Yes, but there are major differences between then and now. Clinton raised taxes as both the U.S. and world economies were stronger than now. He did it when state taxes were broadly lower than they are now. He did it when oil was closer to $20 a barrel than $90 a barrel. He did it before a record housing boom, not after its bust. He did it at the onset of the IT boom, which doesn’t figure to be replicated anytime soon. And before revenues really grew, he cut the capital-gains tax rate, rather than raising it as Obama desires.
Worse, Obama wants to get most of this $140 billion in part by raising marginal tax rates on “the rich” whether their earnings come from their labor or their investments. This has a significant impact on decision-making. For just one current example, look at the growing number of companies paying their anticipated dividends for 2013 out to shareholders now to beat a potential tax hike.
Some of these companies, Costco for example, are even borrowing money to pull off this switcheroo — committing themselves to pay back billions they only hope to earn as profits in the future. Talk about distorting economic behavior.
Obama says the people voted for these higher taxes. While I believe Obama’s proposal would be very harmful economically, congressional Republicans might find themselves with little choice but to allow his policies to prove him wrong in practice. Obama could hardly blame them for letting him entangle himself with the rope he’s demanding.
– By Kyle Wingfield
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504 comments Add your comment
HDB
December 13th, 2012
8:17 am
Lil’ Barry Bailout – OBAMAPHONE!!!
December 13th, 2012
7:58 am
According to Republicans, the stimulus DIDN’T work…..but they asked for and GOT stimulus funding to put constituents back to work!! They got something from it…..but in actuality, voted AGAINST their constituents’ interests!!
I think about what I’m saying; the question is: DO YOU??
JDW
December 13th, 2012
8:17 am
So Kyle, help me out here, what is the difference between taking $140 billion a a year out of the economy by taxing those that can afford it versus taking $140 billion a year out by slashing SS and Medicare? If you have to do it as we do it seems the best choice is option number 1.
No for spending cuts, the Republicans used the debt limit as a sledgehammer, to the extreme detriment of the economy, and “won” $1.2 trillion in spending cuts. Why is it they don’t want that $1.2 trillion? What is different, other than taking the money from grandma’s pocket rather than the defense industry’s, between the spending cuts slated now vs. entitlement cuts?
It is all a smoke screen, Republicans want to protect the rich taxpayers at the expense of the rest of us YET AGAIN. We should let the tax cuts expire for the top two brackets and take our spending medicine and move on.
clem
December 13th, 2012
8:17 am
thought cbo and cro said tax hikes on rich minimal impact to economy in terms of job creation
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:21 am
curious, you can be glad that I’m off the rest of the year. Plenty of time to hang out here at Kyle’s.
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:23 am
HDB: According to Republicans, the stimulus DIDN’T work
—————–
Unemployment went UP after the stimulus kicked in. It never fulfilled the promises it’s passage was based on. If that’s “working”, then yeah, it worked great.
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:25 am
That Sage study paper cracks me up. You just know that these Sage professors don’t travel much into the wilds outside of cloistered campus, so their study patients were all these pent up, frustrated pinkos from the dorm rooms. And when they start getting them lubed up on the alcohol, they were like wait a minute, I don’t like guys. Get off of me, you freak.
If anything, these libs are worth a few good laughs.
curious
December 13th, 2012
8:26 am
Lil’ Barry Bailout – OBAMAPHONE!!!
“curious, you can be glad that I’m off the rest of the year. Plenty of time to hang out here at Kyle’s.”
There is a Santa Claus after all!
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:26 am
The reason the Cons can’t say what spending cuts they are looking for:
http://nymag.com/daily/intelligencer/2012/12/why-republicans-cant-propose-spending-cuts.html
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:28 am
I’m off the rest of the year
Now maybe you will get around to cleaning your room so your mom can stop nagging you?
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:28 am
Avoid the fiscal cliff and a possible recession, and you’re also avoiding starting the process of fixing Obozo’s unsustainable deficits and debt.
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:33 am
It’s hilarious how the progs think Republicans who voted against the “stimulus” should have done the responsible thing and not taken any of the handouts their taxpayers were funding, while cheerleading for the Democrats to greedily grab as much as they can!
Typical proglodyte behavior: Goodies for me, responsibility and discipline for thee.
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:34 am
A second lib here has linked to the ny mag Republican spending cut article, it looks like the koolaid kult message machine is on full foam this morning.
Y’all ever heard of Paul Ryan?
clem
December 13th, 2012
8:36 am
some folks cannot understand they lost the ideological debate last national election. time to govern.
HDB
December 13th, 2012
8:36 am
Lil’ Barry Bailout – OBAMAPHONE!!!
December 13th, 2012
8:23 am
LBB…..unemployment went UP because the stimulus hit the economy late…..and it wasn’t big enough!! We all know that unemployment is a LAGGING indicator as to how the economy is working…..it can be anywhere for 3-36 MONTHS behind the economy!! If you understand THAT, then you know that the unemployment rate was CLIMBING under Bush from any time UP TO THREE YEARS before Obama came into office!!
DownInAlbany
December 13th, 2012
8:38 am
In my opinion, neither the Dems or the Reps give a hoot about anything other than the next election cycle. All of the debating and finger pointing on this blog accomplished nothing.
Lynnie Gal
December 13th, 2012
8:40 am
So now, taking $140 out of the economy to go toward the deficit is a bad thing? Republicans have been screaming about the deficit ever since the great robbery from our treasury in the last days of Bush. Republicans ran up the deficit with wars they never funded and entitlements no one asked for (except the pharmaceutical companies) and when a Democratic president was elected to clean up the mess, all Republicans did was scream and threaten to not honor the credit of the U.S. by paying for the bills they were responsible for running up. Pay down on the deficit! Republicans demanded, but do it without letting tax breaks expire for the wealthy. What do you people want? Deficit reduction (meaning, take money out of the economy to pay down the deficit) or do you want to stimulate the economy? You can’t have it both ways. One thing is for sure. Tax breaks never, ever make a company hire more workers. Never. That money goes into CEO salaries and shareholders pockets. The only reason a company, small or large, will ever hire workers is if they have increased demand for their goods or services. Increased demand comes when consumers can afford to spend–i.e. when wages are rising and jobs are plentiful.
clem
December 13th, 2012
8:41 am
recent nbc poll says 56 blame both parties; 24 % blame repubs, 19% dems
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:41 am
clem: some folks cannot understand they lost the ideological debate last national election.
——————
OK. Republicans lost. Go ahead then and pass whatever you like through the House.
HDB
December 13th, 2012
8:41 am
Lil’ Barry Bailout – OBAMAPHONE!!!
December 13th, 2012
8:33 am
“It’s hilarious how the Republicans think that voting against the “stimulus” was the responsible thing when their constituents needed assistance but simultaneously lauding the effect of the stimulus on their region’s economy, asking for more, paying more to their wealthy friends, and violating a tenet of their hero’s politics (Ronald Reagan).
Typical Republican behavior: Goodies for me, responsibility and discipline for thee.”
There, fixed it……..
clem
December 13th, 2012
8:42 am
speaking of laughs, how about arthur laffer
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:42 am
DownInAlbany: In my opinion, neither the Dems or the Reps give a hoot about anything other than the next election cycle
——————
Is that why the GOP is trying to hold out for some spending cuts and entitlement reforms, while the Dems propose nothing but more free stuff?
Chip
December 13th, 2012
8:43 am
As a conservative, I am no fan of the GOP. However, in this situation, I do believe the smartest thing Republicans could do at this point is tell Obungle and his merry band of Bolsheviks to send up whatever bill they want… and the GOP then all take a page from Obama’s playbook and vote “present.”
In their press releases, the Republicans could legitimately point out that while they cannot condone the runaway taxation policies of Democrats, they also do not want to stand in the way of Obama’s (imaginary) “mandate.”
Then, after O and his loons blow every additional confiscated penny on new gimme giveaway vote-buying programs for the bums instead of respopnsibly paying down federal debt… after the economy grinds practically to a halt… after our military loses its effectiveness and the libs toss our vets under the bus… after unemployment leaps well into double-digits… after more and more businesses fail, close, or move out of the country… OBUNGLE AND THE DEMS WILL OWN IT!
Maybe then the wishy-washy moderates will get a clue just how dangerous ingorant, hysterical, insane liberals actually are to our way of life.
HDB
December 13th, 2012
8:44 am
Aesop’s Fables and other Lib Economic Theories
December 13th, 2012
8:34 am
“Y’all ever heard of Paul Ryan?”
YEP…heard of him,and read his plan as to how to screw over the American populace while getting riches for his cronies…..that’s all that budget plan was!!
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:44 am
clem: recent nbc poll says
————–
Another recent poll says 60% believe the top tax rate should be 25%.
Your point?
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:44 am
Just keep in mind, folks, even if we go over the cliff all those spending cuts don’t immediately go into effect and may never go into effect. They are set to gradually occur and Congress can stop them at any time.
If we go over the cliff, the Bush-era tax cuts will go back to normal. So, in 2014, your 2013 tax bill could be higher. BUT, all the Dems have to do after we go over the cliff is come back to work in January and introduce a bill to cut middle class taxes.
There is NO NEED to negotiate anything with Republicans.
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:44 am
speaking of laughs, how about clem posting up a poll from pmsnbc?
Moon Mullins
December 13th, 2012
8:46 am
You’re an idiot if you think Boehner is willing to put anything substantial on the table with this lame duck congress. He’s toying with the POTUS and will kick this can down the road into the New Year when the new Congress is sworn in.
This is all posturing as Boehner tries to manage his fragmented party. They can’t find their arses with both hands because, as George Will so ably stated: “Conservatives define themselves in terms of what they oppose.” They don’t “propose”, they just “oppose.”
After the New Year, the Republicans will have an epiphany — the American People see THEM as the problem and unless they want to end up like the Federalist Party or the Whig Party, they’d better get with the program — there just ain’t enough oligarchs to elect a POTUS.
And, that was proven in the last election!
clem
December 13th, 2012
8:47 am
better than what you have offered to date
carlosgvv
December 13th, 2012
8:47 am
“we are in for a rough 2013″
An assertation that no one with any knowledge of America’s last five years would possibly argue with.
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:48 am
Paul Ryan quotes the bible:
“The meek shall inherit ….the toe of my jack boot!”
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:48 am
I’ll be the first to admit that Fox News isn’t necessarily “fair and balanced,” but at least they restrain themselves somewhat. They have no apes like chris matthews. And they aren’t ate up with communists like the children’s news network.
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
8:49 am
Finn McCool (The System isn’t Broken; It’s Fixed)
8:44 am
——————-
If it goes as you suggest, the Democrats don’t negotiate anything, and the economy goes into recession, who gets the blame?
jconservative
December 13th, 2012
8:50 am
Number one, by act of Congress taxes are going up on January 1, 2013. The question on the table is will anyone be exempted from the tax increases?
Number two, by act of Congress spending is going to be cut on January 2, 2013. The question on the table is what spending will be cut?
I do not see the problem. Let Congress go home for Christmas.
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:50 am
““we are in for a rough 2013″
It will be rough with or without a fiscal cliff deal.
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:50 am
Number two, by act of Congress spending is going to be cut on January 2, 2013
Not meant to be a factual statement.
stands for decibels
December 13th, 2012
8:51 am
taking an extra $140 billion out of the economy each of the next 10 years
Given that it’s coming out of the pockets of those most able to pay it, and that it’s a pretty teensy tiny bit of our GDP, and that there isn’t any other practical way, really, to address wealth stratification with our divided government, AND that we continue to cling to this notion that we have to do something about our “debt crisis,” I don’t see that as anything to lose sleep over.
Honestly though, I don’t see that 140 billion as much more than tip money from our Galtian overlords.
/drive-by
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:53 am
The Path to Prosperity: Restoring America’s Promise was the Republican Party’s budget proposal for the United States federal government in the fiscal year 2012. It was succeeded in March 2012 by The Path to Prosperity: A Blueprint for American Renewal, the Republican budget proposal for 2013. Representative Paul Ryan, Chairman of the House Budget Committee, played a prominent public role in drafting and promoting both The Path to Prosperity proposals, and they are therefore often referred to as the Ryan budget, Ryan plan, Ryan proposal, etc.[1][2]
The 2012 Republican proposal was formalized and passed by the House of Representatives on Friday, April 15, 2011 by a vote of 235 to 193,[6] largely along party lines. A month later, the Senate voted against the budget by a vote of 57–40.[7]
The 2013 proposal provides workers currently under the age of 55 (beginning in 2023) a choice of private plans competing alongside the traditional fee for service option on a newly created Medicare Exchange. Medicare would provide a premium payment to either pay for or offset the premium of the plan chosen by the senior. This was similar to a plan developed with Senator Ron Wyden of Oregon, but different enough so that the Democrat opposed it[8]. To secure Medicaid benefits, the budget proposed converting the federal share of Medicaid spending into a block grant indexed for inflation and population growth [9]. The 2013 proposal also caps non-defense discretionary federal spending at $1.029 trillion and consolidates the six existing income tax brackets into two.[2]
Remember when y’all about grandma over the cliff, blah, blah?
Are your memories really this short?
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:53 am
For DoD: $55 billion spending reduction slated for fiscal 2013
How solid do you really think the word “slated” is? In the hands of Congress? LOL
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
8:54 am
oops, when y’all were whining about.
HDB
December 13th, 2012
8:55 am
Chip
December 13th, 2012
8:43 am
To counter your argument:
As a moderate/liberal, I am no fan of the GOP. However, in this situation, I do believe the smartest thing Republicans could do at this point is review history, look at the Clinton policies on taxation, work WITH Democrats to come up with a cogent proposal, and pass the bill!!
In their press releases, the Republicans could legitimately point out that they worked to get this nation back on sound economic footing, focusing on economic growth for the middle class, returning to the Clinton tax rates where the economy grew at its fastest rate, and listening to the national mandate, i.e., quit obstructing and get to work!!
Then, when the economy turns due to bipartisan efforts rather than obstruction, and we are responsibly paying down federal debt, after our military still maintains its effectiveness, our vets get the assistance we need since veterans programs were cut under Republicans Administrations, after unemployment begins to decline… after more demand for products and service spur the economy…. OBAMA AND THE AMERICAN PEOPLE WILL PRODULY OWN IT!
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
8:55 am
the Senate voted against the budget by a vote of 57–40
DOA = Dead On Arrival
stands for decibels
December 13th, 2012
8:57 am
the stimulus hit the economy late…..and it wasn’t big enough!
I’m so old I can remember when a later-to-be Republican candidate for President actually acknowledged as much.
CAVUTO: Were you against the stimulus , Governor?
HUNTSMAN: Well, if I were in Congress, I probably would not have voted in favor because it didn’t have enough stimulus and probably wasn’t big enough to begin with.
But, I guess he got worked over and changed his tune later.
/drive-by (for real this time…)
Aesop's Fables and other Lib Economic Theories
December 13th, 2012
9:00 am
stands – I forget, what was Huntsman’s vote total in the Repug primaries? Oh yeah, now I remember, it was like ZERO.
Lil' Barry Bailout - OBAMAPHONE!!!
December 13th, 2012
9:02 am
the Senate voted against the budget by a vote of 57–40
—————————
How many votes did Obozo’s budget get?
curious
December 13th, 2012
9:05 am
You can make the top tax rate 95% and people like Romney will still pay 10-15%. if even that.
clem
December 13th, 2012
9:06 am
that should mean he was a shoo-in to most moderates
Tiberius - pulling the tail of the left AND right when needed
December 13th, 2012
9:07 am
“please list Obama’s failed policies. . . .Is is ending one war and winding down a second war–both of which has caused 26% of our deficit spending, both of which were not warranted?”
According to DeborahinAthens, continuing a Bush policy now makes it an Obama policy.
So I guess we can now call the current tax rates the Obama tax cuts, right, Deborah?
Finn McCool (The System isn't Broken; It's Fixed)
December 13th, 2012
9:12 am
I guess we can now call the current tax rates the Obama tax cuts
Well, the Chinese have 38 words that describe the color gray — depending on which grey you are talking about. Call them whatever you like.
MANGLER
December 13th, 2012
9:15 am
Finn,
thanks to a recent series of books, Americans now have 50 shades of gray
East Cobb RINO, Inc (LLC)
December 13th, 2012
9:16 am
Whether it is increased taxes or decreased spending, it still results in taking money out of the economy. Severe cuts to Medicare/Medicaid would mean less healthcare spending and less healthcare jobs. Healthcare jobs tend to pay more than fast food jobs. Talk about not wanting to become another Greece. The Greek problem may have began with debt but has now been made far worse by too much austerity. Cutting government spending is more of a job killer than raising taxes. I can support some spending cuts but GOP must and will cave to the higher taxes.