The Fiscal Slope Exposes Deficit Scolds as Cowards

By: Friday December 21, 2012 5:51 pm

Let’s just stipulate something for the record. If the Congressional Budget Office were asked to step in and score John Boehner’s “Plan B,” it would score as an increase to the deficit by about $4.9 trillion over ten yeas. If CBO scored the Obama plan, it would score as an increase to the deficit by about $4.1 trillion over ten years. That’s because current law dictates that America goes over the cliff and stays there. It doesn’t contemplate any changes to the law. And if America went over this cliff, the resulting austerity would be so great that it would swing the economy into recession. It would also virtually wipe out the long-term deficit gap, even while it would probably increase it a bit in the near term, because of increases in automatic stabilizers. But over the long-term, the deficit would essentially be wiped out.

 

The Pileup Behind the Fiscal Slope, and the Consequences of Inaction

By: Friday December 21, 2012 10:23 am

Say what you will about the 2010 deal to extend the Bush tax cuts, which helped to set up what we’re seeing this month. But there was definitely a virtue in getting it done by early December, allowing for a productive lame duck session that repealed Don’t Ask Don’t Tell, passed the New START arms reduction treaty, and several other measures. Because this entire lame duck has been consumed with fiscal slope negotiations, and really only the tax rate and social insurance part of it, bills that might have had a chance to pass through Congress if the pipeline were unclogged instead remain dormant. And unlike 2010, the bills in question in 2012 are more of the must-pass variety.

Where to Go From Plan B, And Why the Answer Is “Nowhere”

By: Friday December 21, 2012 6:40 am

I couldn’t think of a more fitting story on my last day of blogging to symbolize the nature of our government than the aborting of Plan B, wherein House Republicans couldn’t even pass a messaging bill with no chance of advancing. Sometimes we’ve seen Speaker Boehner miscount the votes – the most notable time I can think of was an initial vote reauthorizing the Patriot Act, when some civil libertarians revolted – but not on a pure messaging bill.

Boehner Bails on Plan B

By: Thursday December 20, 2012 6:28 pm

I just finished laughing from this spectacle on the House floor today. The House leadership tried desperately to pass “Plan B,” the main part of which was an extension of the Bush tax cuts on the first $1 million of income. In truth, all of the other giveaways in it would actually result in lower taxes for many wealthy earners, but tax rates have this weird power, especially within the Republican caucus. And you could just feel today that conservatives weren’t willing to pass the bill, even at that ridiculously high level. John Boehner and the leadership added a sweetener in the form of a package that eliminated the sequester on defense spending and applied it to more discretionary spending cuts, and even that barely passed, tainted by the association to Plan B.

We waited for a vote. And waited. Then the House Republicans held a closed caucus. And then…

The Plan B Follies: Freedomworks Jumps Off the Ship

By: Thursday December 20, 2012 12:09 pm

This clown show on the House floor just got more hilarious. At some point in the last four hours or so, Freedomworks, a key tea party group, abandoned their support of Plan B, this Boehner proposal to create what looks like a conservative wish list.

Senate Republicans Nickel and Diming Sandy Relief

By: Thursday December 20, 2012 9:19 am

While the nonsense continues on the fiscal slope, which increasingly looks like something the nation will have to weather, the Senate has been working on an appropriation for states suffering from the disaster caused by Hurricane Sandy. The parallel has to be understood: in one part of Washington, they’re trying to put in a deficit deal to replace politically driven forced austerity, and in another part, they’re trying to respond to a national emergency the way the federal government must in these cases, by spending money. Look at these two things together and you’ll understand a lot about Washington – the compartmentalization, the forced blindness, the lack of knowledge about the economy, everything.

And both sides of the Senate are taking up their predictable positions in the matter. Specifically, Senate Republicans want to nickel and dime disaster relief victims.

Learned Behavior: Obama’s Backtrack on Tax Rates, Debt Limit Empowered Republicans

By: Wednesday December 19, 2012 2:10 pm

The White House announced they would veto “Plan B,” John Boehner’s gambit to pass a bill extending the Bush-era tax rtes for all earners on the first $1 million of income. And Nancy Pelosi said that Boehner had better have 218 votes for such a bill, since House Democrats won’t provide any. Of course, Boehner [...]

Boehner Delivers Plan B Ultimatum

By: Wednesday December 19, 2012 1:14 pm

John Boehner just gave a “press conference” that clocked in at under a minute, where he took no questions and basically said that Democrats could either pass his “Plan B” proposal, which extends Bush-era tax rates on the first $1 million of income and does basically nothing else, or “be responsible for the largest tax increase in American history.”

More on Chained CPI, the Benefit Cut for Social Security on the Table in Fiscal Slope Discussions

By: Tuesday December 18, 2012 8:25 am

First of all, this is a benefit cut of about 0.3% a year, as Dean Baker points out. He adds that “This loss would be cumulative through time so that after 10 years the cut would be roughly 3 percent, after 20 years 6 percent, and after 30 years 9 percent.” Actually if we started using chained CPI in 2002, we’d be 3.6% behind today. That’s well over $1,000 a year, and the situation grows worse over time. So the greatest impact would be on the oldest seniors, which happens to correlate with the poorest.

Obama’s Latest Fiscal Slope Offer: I’m Missing the Part Where Republicans Give Up Something

By: Tuesday December 18, 2012 6:54 am

The headlines here is that the Obama Administration narrowed the demand they maintained for four years, for tax rates to increase above $250,000, and they would agree to a benefit cut for Social Security and $400 billion in unspecified Medicare cuts, and in exchange they would mostly extend current law on a few fronts (but not all) and get an unspecified amount, no more than $50 billion, in infrastructure spending.

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