Obama could have used this revenue-increasing deal to finally pivot to immigration, education, climate change, gun control or any of a dozen other issues that have been completely neglected while Washington has been overwhelmed with deficit hysteria. There is no shortage of more pressing problems in America that need to be dealt with. Instead Obama seems to be signalling that much of his second term is also going to be consumed with his desire to get a balanced deal to reduce the deficit, and in Washington “balanced deficit reduction” is basically the code word for cutting entitlements.
|By: cocktailhag Thursday December 27, 2012 8:00 pm|
In any normal country, there would be no particular reason to expect 2013 to be an awful year. The right-wing Presidential candidate, who preached austerity, family values, and military adventurism, was soundly defeated by the center-left candidate, who favored, well, austerity-lite, personal freedom, and a fiscally convenient “peace dividend.” Overconfident and overfunded Republicans were similarly trounced in the House and Senate, losing seats in both despite stunning structural advantages.
It seemed that the Right’s perennial hobby horses, from favoring the wealthiest above all others and demonizing minorities of every type, to demanding that every non-military expenditure be slashed to the bone, had clearly been sent to the glue factory by the electorate. Alas, things are never what they seem in Washington.
|By: wigwam Saturday December 22, 2012 6:00 pm|
It’s important to understand that “deficit” and “stimulus” mean the same thing: money pumped into the economy by government spending and not pulled back by taxation. So deficit reductions (tax hikes and spending cuts) destimulate the economy. FDR learned that the hard way in the first year of his second term; in a premature return to “fiscal responsibility,” he cut deficits, which destimulated the economy and induced the Recession of 1937.
In the Summer of 2011, Obama concocted the Grand Bargain of 2011, a deficit-reduction package not unlike that of FDR. But, it cut Social Security and Medicare (entitlements), which offended some progressive Democrats. And, because it also contained tax increases, which offended Tea Party Repubicans, it was eventually shot it down.
|By: David Dayen Friday December 21, 2012 1:33 pm|
So Democrats have reached the bargaining phase of the fiscal slope debacle. It’s hard to say whether they’re pushing this because they think they have an opportunity to avoid the austerity bomb or because they know they have no partner on the other side, but either way, the result is the Democratic leadership, at least in the House, taking control of a plan that would, among other things, cut Social Security benefits as well as benefits for any of the 50 federal programs with a cost of living adjustment or income-based eligibility standard, and begging John Boehner to work with them to pass it.
|By: David Dayen 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.
|By: David Dayen 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 [...]
|By: David Dayen 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.
|By: David Dayen 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.
|By: David Dayen Monday December 17, 2012 6:57 am|
The offer apparently paired $1 trillion in tax increases with major social insurance cuts. Assuming that the spending cuts match the tax hikes dollar-for-dollar, all Boehner is saying is that his rule, where every dollar of debt limit increase must be matched by a dollar of spending cuts, remains in effect. So he’ll honor that with a $1 trillion increase in the debt limit. Tax increases do not count as deficit reduction in Boehner’s equation; only spending cuts will register for increasing the debt limit.
|By: David Dayen Friday December 14, 2012 4:34 pm|
It certainly looked yesterday as if the White House had dropped any notion of using an increase in the Medicare eligibility age as a bargaining chip in future negotiations on a grand bargain. While the White House has not ruled out increasing the age, some of its leading allies did, and Dick Durbin went so far as to say this was “no longer one of the items being considered by the White House.” But the Press