During the Vice Presidential debate moderator Martha Raddatz asked Joe Biden what the Obama administration’s plan was for dealing with trillion dollar deficits and a burgeoning debt other than raising taxes on the rich.
His response was, “Martha thank you for asking that question brrreg….bllleeerp…dddeeerp….I think it’s really important that those who can afford to pay more do.”
Maybe I’m paraphrasing, but his answer, more or less, to what else they had besides tax the rich was tax the rich.
Not a great start.
So then, it should come as no surprise that Obama’s opening bid in the debt ceiling negotiations was utterly devoid of compromise and full of the tax raising nonsense he ran on.
Same cuts as in the budget he proposed, which didn’t get a single vote in the House it was so utterly ridiculous.
What it does have is a higher top tax rate for the rich, higher capital gains taxes and explosive increases to the taxes on dividends.
Brian Beutler of Talking Points Memo, suggested this first proposal would make the Republicans look bad because…ummm I’m not sure. The only real analysis he provides is that it now means the GOP must come up with a plan (duh), and this plan was the one Obama ran on.
(Beutler disagreed with that assessment on Twitter yesterday, but read the article and tell me who you think is right).
Business Insider took Beutler’s explanation a step further saying there was a host of things to like in Obama’s plan.
One includes giving the President the power to raise the debt ceiling whenever he wants, which apparently Joseph Weisenthal thinks is a good idea. Obama is in favor of extending the payroll tax break, which was a Republican policy to begin with.
More unemployment benefits and modest infrastructure spending. The last part seems pretty superfluous in the grand scheme of the plan because of nearly $1 trillion in spending didn’t stimulate the economy, $50 billion won’t much matter.
But the president put this plan out there knowing the GOP would laugh at it. Mitch McConnell literally laughed at it.
No entitlement reform, the top driver of our debts and deficits. Even liberals know that is true.
An onerous tax hike, particularly on investment earnings when most economists believe in a recession you ought to lower taxes on investments, particularly given how many people’s retirement money sits in 401K’s and other investment-based holdings.
National Public Radio (gasp), was on board with the potential dangers of raising taxes like this. This plan is a about as serious as a Will Ferrell movie.
Democrats know that raising taxes isn’t going to do much of anything to deal with the deficit, particularly given that only the top end will lose the tax break. It’s just something they want and the left sees this as the time to try and ram it through.
If there had been real movement on entitlement reform – just blindly wielding the budgetary axe is not reform – or a discussion about actual federal government austerity, then maybe the GOP would have reason to talk about revenues from top earners.
I see no reason why the Bush-tax cut revocation for people making $250,000 or a more can’t be accepted by the GOP, but only if it isn’t coupled with burdensome tax hikes on all sorts of other income and comes with a serious attempt to get entitlement spending under control.
This $4 trillion in supposed deficit reductions over the next 10 years is laughable when Obama has rung up $4 trillion in deficits in his four years in office. There’s no reason to believe he won’t just subvert these cuts with new spending. In fact, he almost certainly would.
Matt Yglesias lays out what could actually be a reasonable compromise that would include capping deductions on the rich and allowing Obama to move forward with his stimulus, unemployment benefits etc. Would it ever happen? Of course not, because then the Democrats feel like they lost since it wasn’t their idea (unless of course Harry Reid or a senior Democratic Senator has the stones to suggest it…unlikely)
Democrats think they have the upper hand because the Tea Party looked like the culprit in the last debt ceiling debacle. The sequester though, includes serious cuts to liberal pet programs like Head Start and AIDS funding. It also would include tax increases on the middle class, something the Democrats desperately don’t want to be responsible for.
For Republicans, the spending cuts in the sequester will be fine for many Tea Party Republicans who believe military spending already accounts for too much of the federal budget and that the Medicare and Medicaid cuts were inevitable.
Both sides have reasons to want and not want us to go off the fiscal cliff, but the plan cannot and will not look like the one Barack Obama just put forth. That plan is a non-starter with the GOP and it’s up to them to paint Obama as the one unwilling to compromise by putting forward their own plan which the country can get behind.
Obama has, in the midst of his power play, actually done the Republicans a mighty favor: he’s put the ball in their court. If the GOP can come through with a plan that actually makes sense (and that likely means raising rates on top earners, or at least creating some sort of minimum tax rate coupled with deduction caps), they’ll be able to put considerable pressure back on the president and the Senate to pass the plan.
We can’t pretend like this is a zero-sum game where either the Democrats or Republicans win and the other loses. Unfortunately that’s how the media and even the politicians themselves seem to view it. If that continues, then we all truly lose.