Shared Sacrifice = Soak the Rich, Increase Taxes on Business

This is going to be an interesting summer.  Clearly, we are headed toward some kind of epic budget impasse, driven by the need to raise the debt ceiling (something acknowledged by most in both parties) and the Republican desire to use that need as a lever to gain spending cuts. 

Into the fray step Joe Lieberman and Tom Coburn with a plan to cut $600B in Medicare spending in the next decade, in no small part by raising the Medicare age to 67 from its current 65.

Democratic reaction was predictable.  Here is Madame (Former) Speaker Pelosi:  “It is unfair to ask seniors to get less in benefits and wait longer to get onto Medicare — all while Republicans back tax breaks for big oil and corporations that ship American jobs overseas,” Pelosi said.  Yawn.

We have come to a lamentable place in the evolution of this country when a political party cannot bring itself to cut benefits for people who aren't even receiving them yet, or to delay benefits for people who do not qualify for them.

Every time I hear Pelosi talk about "tax breaks for big oil", I want to see statistics on the profit margins for companies operating in and near her district--you know, San Fran, Silicon Valley.....where margins DWARF those earned by the oil companies. 

The Budget Talks Break Down

Word is that the Republicans have flown the coop on Joe Biden's debt confab, and that they are now "demanding" to meet with the President on the subject.  While highlighting the President's distance from the process is helpful, the Republicans are playing this wrong.  Don't "demand" anything.  Wait them out.  Make the President "demand" a meeting with you.  Remember--he's got more to lose than you do.

Everything seems to revolve around Republicans' stand on taxes--that is, no tax increase will make it through the House, so don't even consider one.  Here are two tax increases I'm willing to support:

1.  The "Super-rich" tax.  This would be 3% surcharge on all income--or capital gains--realized over the amount of $10M in any one year.  Several facets of this tax appeal to me.  The first is that it treats capital gains like income, which i believe it ought to be in the regular tax code.  Secondly, my Spidey senses tell me that it will disproportionately impact liberals and Democrats, or at least those who are so rich that they have the luxury and time to "care" about issues like social justice, poverty, the environment, and public eduction without ever giving a crap about the consequences of their largess. 

2.  The creation of a "1% bracket".  What does that mean?  It means that the very first thing one would do on a tax return is figure out what 1% of one's taxable income is.  That figure would then be THE FLOOR.  Everyone earning a wage would AT LEAST pay 1% of their income to the continuing operations of a government from which they draw continuing succor and from which they continue to demand an increasing flow of benefits.

VP Biden had this bit of fatuity for our listening pleasure:

“The only way to make sure we begin to live within our means is by coming together behind a balanced approach that finds real savings across the budget — including domestic spending, defense spending, mandatory spending, and loopholes in the tax code,” Biden said in a statement. “We all need to make sacrifices, and that includes the most fortunate among us.”

All of us, Mr. Vice President?  All of us?  Then stop weeding out "the middle class" from consideration.  Stop fencing off the elderly. If there truly is to be shared sacrifice then LET IT BE SHARED.  This notion that we can get what we need by simply soaking the rich is loony.

President's "Me Too" Plan Falls Short

The President hopped in a motorcade today that carbon-burned its way down the street all the way to GW University where he delivered his "me too" speech on the deficit in order to show that Paul Ryan wasn't the only big man in town.  In a speech in which it took him 24 minutes to deliver his FIRST policy idea, he began with a rambling dissertation on what America means to him, followed by a predictable misrepresentation of Paul Ryan's plan designed to make sure every poor person and old person in America remained convinced that Republicans were out to get them.

A couple of things stood out in the speech for me today.

--The President was honest and blunt with his own party when it came to the discussion of having to reform entitlement spending in order to save the programs.  It's a shame he wasn't able to muster the same clarity and sensibility in his evaluation of Mr. Ryan's plans to do the same thing.
--As I predicted here a few days ago, a centerpiece of Mr. Obama's approach is going to be tax increases, specifically, raising the current tax rates to their pre-President Bush levels.  Interestingly, the President referred to "new tax breaks" several times in the speech, as if his agreement with the Republicans in December to not increase tax rate, counted somehow as a "tax break".  The income tax rates that have existed in this country since 2003 are the baseline, and any changes to those rates are henceforth to be referred to as "increases" or "cuts" depending in the direction the adjustment is made.
--The President spoke several times of "shared" sacrifice, and just as many times seemed to inoculate a broad swath of our society from such pain's impact.  Who you ask?  "Seniors"--as if simply getting old in our society was in some way a rationale for being treated differently.  Nonsense.  Seniors with means should be treated no differently from others in the same tax bracket or the same economic strata.  NEED should be the determinant of benefit, not AGE.
--The President made a really loony statement when he asserted that "most" wealthy Americans agreed with him that they should pay higher taxes in order to "give more back" to the country.  What is his evidence for this?  "We just haven't asked them" was further nuance added to this silliness.
--I am all for eliminating certain deductions in the tax code (mortgage interest deduction chief among them), but I refer to such ideas by what they are--tax increases.  The President's selection of the tortured "spending reductions in the tax code" is just another ridiculous example of Washingtonspeak.

The best part of the speech came toward the end when he spoke of the "sharp and vigorous" debate that had attended to issues of this kind in the past, and that would assuredly accompany this era.  He said that such a debate was not a bad thing.  I agree with him.  These are big and important issues, the kinds of issues worth a protracted and spirited tussle.  I am quite certain he is going to get one.

The Budget Deal

Well, it looks like the executive and the legislative branches got it together, finally.  Presumably, the "smoke-break government" (my new term for Boehner and Obama huffing down butts on the White House veranda) has a chance to work.  Nearly $40B in spending cuts is nothing to sneeze at, and John Boehner seems to have emerged from this tussle strengthened and admired. 

I am glad that the pols were able to get this thing done--and I hope it holds.  There will be some drama in the days ahead, but in the end, we will be able to move onto less contentious things--you know, like Paul Ryan's 2012 budget and the debt ceiling.....

The Rhetoric Of Failure

"The other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft. That's what lies behind the modern right's fondness for violent rhetoric."

To what then would Krugman attribute the modern left's fondness for similar hysterics?

Pelosi calls GOP plan 'War on Women'

Dem: Shutdown equivalent of bombing innocent civilians

Rep. Sheila Jackson-Lee: "Maybe we can just imagine the tragic scenes of Hurricane Katrina, when nursing home residents were pouring out of nursing homes in the wake of the disaster...Well let me tell you, we've got Hurricane Ryan, and there's a disaster coming."

I do agree with Rep. Jackson-Lee on one thing: there is a disaster coming, but it's not a disaster of Ryan's making.

Loves Me Some Krauthammer

On the post-partisanship of health care deform by budget reconciliation.