A Short-Term Win For Democrats, A Long-Term Loss For Democrats?

We’re making permanent tax policies Republicans originally crafted.”

—Dave Camp, the Republican chairman of the tax-writing Ways and Means Committee in the U.S. House of Representatives

Republicans, at least those not completely ravaged by ideological stupidity, have finally been willing to embrace their substantial victory over Democrats, a victory represented by the last-minute deal to make the once-infamous Bush tax cuts permanent.

Early on New Year’s Day, Senate Republicans saw the light and accepted a Biden-engineered but Obama-blessed “compromise,” and later on New Year’s Day House Republicans—those 85 or so who for one reason or another realized they have won the tax debate—did the same.

All the while, most Senate and House Democrats couldn’t wait to get in line to vote to accept the deal (only 3 voted “no” in the Senate and only 16 voted “no” in the House), which, among other things, makes the Bush tax cuts, I’ll say it again, permanent.

Perhaps we should stop here and get Merriam-Webster‘s definition of the word permanent:

continuing or enduring without fundamental or marked change.

That’s a lot of what happened on New Year’s Day.

I watched Grover Norquist, yes, Grover Bleeping Norquist, right in front of CNN, GOP Jesus, and everyone, bless his fellow Republicans as they were about to vote to do what conservatives a decade ago only dreamed of doing: making the Bush tax rate cuts permanent for 99.3% of taxpayers.*

Did you get that? Conservatives in 2001 and 2003 couldn’t even pull that off. When right-wingers passed the original Bush tax cuts, they were only for ten years. Obama extended them for two years just before they were due to expire at the end of 2010—under Republican threats to ruin the economic recovery—and now they have been made a part of the Democratic Party canon. Bragging rights for tax cuts now belong to Democrats, which they may eventually regret.

Oh, don’t get me wrong. I’m not opposed to extending the tax cuts for most Americans. We can’t afford to jeopardize the fragile economic recovery by removing almost $200 billion a year—that’s roughly the cost of extending the cuts for the 99.3%—from the mix.

But we also can’t afford to extend the full rate cuts for that entire 99.3% permanently—at a cost of $1.9 trillion over 10 years—as doing so will serve to support the “starve the beast” tactic that radical conservatives like Grover Norquist have employed as part of their strategy to turn the country into a 19th-century small-government, rich-man’s paradise.

As I see it, Democrats may have inadvertently aided the Norquistas in their quest to some day drown government, at least part of it, in Grover’s bathtub.

There are, of course, many good things in the package passed, including a five-year extension of the 2009 stimulus expansion of tax credits for the working poor and other tax credits for the needy, including families trying to get their kids in college.

Those on long-term unemployment will get an extension for another year; doctors who accept Medicare won’t get screwed in the next year; tax breaks for wind energy and corporate research are continuing for at least another year; the Alternative Minimum Tax will be permanently indexed to inflation; the Republican-stalled farm bill will get unstalled for nine months—enjoy your cheaper milk.

Most of what Democrats got they got without having to offer significant spending cuts, which would have hurt the economic recovery. All good.

But besides the permanence of the Bush tax cuts, there are other bad things in the deal. The estate tax, which beginning on January 1 returned to Clinton-era rates (estates valued at $1 million were exempted and estate transfers over that amount were taxed at 55%), is now permanently Republican-friendly: a $5 million ($10 million for a couple) estate exemption (indexed to inflation) and a top tax rate of 40%, which, as Chris Van Hollen (D-Md) said, is a “sweetheart giveaway to the wealthiest 7,200 estates in the country.”

Capital gains taxes, which enabled the Mitt Romneys of the world to enjoy millions of dollars in income and pay only 15% in taxes on it, will rise to a mere 20% (23.8% if Obamacare taxes are figured in) for those couples making more than $450,000 ($400,000 for individuals). So, if you are Mitt Romney, you will have to find a way to live without that extra dough. Somehow I think he’ll cope.

But he may not even have to worry about coping. Bloomberg Businessweek reported the following about the increased capital gains tax in the new bill:

Many households with incomes above $500,000 won’t face the higher rates at all, because deductions are subtracted from gross income before the rates are assessed.

Finally, the deal Joe Biden brokered with Mitch McConnell does nothing but delay a fight over the sequester and over the dreaded and fast-approaching fight over the debt ceiling that Republicans have pledged to use as a tool to force Democrats to cut entitlements. We are guaranteed to go through all this nonsense again, though this time it would threaten an economic crisis that would dwarf the one we just averted.

President Obama, in his statement after the House vote on Tuesday night, said this:

Now, one last point I want to make — while I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed. Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic — far worse than the impact of a fiscal cliff.

Even though the President went to some trouble to explain that he will not negotiate with Congress over yet another stalemate over the debt ceiling, it is hard to see how he can avoid it, especially since Obama’s press secretary took the “constitution option” off the table recently:

This administration does not believe that the 14th Amendment gives the president the power to ignore the debt ceiling — period.

Section 4 of that amendment says,

The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Now, it is true that the President himself has not actually ruled out such a thing, saying this summer only that,

I have talked to my lawyers. They are not persuaded that that is a winning argument.

That statement, obviously, assumes court involvement. But any judiciary action—and some smart people believe the courts would not even get involved in this political matter—would require time. And Mr. Obama may conclude that by educating the public on the dire consequences of a failure to raise the debt ceiling, and given the extreme unpopularity of Republicans in Congress, that he will have plenty of latitude to do what needs to be do.

Additionally—and this may be the saving grace of this deal for Democrats—Obama said on Monday:

…if Republicans think that I will finish the job of deficit reduction through spending cuts alone — and you hear that sometimes coming from them, that sort of after today we’re just going to try to shove…spending cuts at us that will hurt seniors, or hurt students, or hurt middle-class families, without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists, et cetera — if they think that’s going to be the formula for how we solve this thing, then they’ve got another thing coming.  That’s not how it’s going to work.  We’ve got to do this in a balanced and responsible way.

That rather strong statement suggests that Obama has a definite strategy in mind for dealing with Republican threats to wreck the economy in order to get what they want.  If he does, and if his strategy is successful, the bad things in the fiscal cliff deal will not look so bad.

And let us hope that what Democrats have done—setting in stone tax cuts that have partly contributed to our fiscal problems—will not someday hinder them as they attempt to protect vital government programs from those who mean to drag the country back into the 18th century.

_____________________________

*For those couples earning between $250,000 and $450,000, less generous Clinton-era tax exemptions and deductions will return, which will increase their tax liability and likely satisfy President Obama’s insistence of tax increases for the “top 2 percent”; but the tax rate cuts themselves are permanent for those couples making under $450,000, which is less than 1% of taxpayers.

“Liberals Love Wealth”

A very thoughtful commenter, and fellow blogger (Brucetheeconomist’s Blog) who calls himself a “disaffected conservative,” appended the following to a piece I wrote on Mitch McConnell’s characterization of liberals as being “interested in wealth destruction” :

Saying liberals want to destroy wealth is absurd. I do think it is fair though to ask how much flattening of the income and wealth distribution should be a goal.

I’d like to see improved opportunities for those at the bottom of the ladder more than for those at the top rather than redistribution. That said the use of progressive taxes and social benefits for the poor is appropriate if all else fails to avoid the distribution of wealth being too inequitable.

If we could get the distribution of wealth back to where it was say in 1990 that would seem an appropriate goal to me. I don’t think any sensible person wants to perfect equality.

Any thoughts on this anyone else.

My reply:

Bruce,

Liberals love wealth. We want a lot of Warren Buffetts running around, making money, helping the country, and, uh, paying taxes.

The opportunities you (and I) seek “for those at the bottom of the ladder” can only come through investing tax dollars to create those opportunities, most of which come via education or job training. And since we have to get the tax dollars from those who have the money, “redistribution” is inevitable. How much? how much from whom? is fair to ask.

Apparently, we both agree that a grossly inequitable distribution of our nation’s wealth would not be a good thing. What about a moderately inequitable distribution? What, indeed, is a reasonable level of wealth inequality?

I don’t favor progressive taxation because I am a liberal. I am a liberal because I favor progressive taxation. I favor it because of my guiding concept of fundamental fairness (those that benefit the most from society should pay the most to maintain it as a civilized one—by 21st-century standards) and because, as I said, we need the money to do things we agree need done. And rich people have more money to spare than the rest of us.

I don’t know what a reasonable or realistic goal for national wealth distribution would be, only the ideal: a relatively equal distribution. I know that such a thing is not now, nor will ever be, possible to achieve, for a lot of reasons, including that some folks will always work harder than other folks and thus deserve more. How much more do they deserve? Beats me.

I only know that in order to provide the opportunities you and I agree are necessary, it costs a lot of money. It also costs a lot of money to keep the government doing other things for us, like inspecting our food and water; funding basic scientific research, supervising air travel; protecting us from enemies abroad and criminals at home; and keeping poor children, the sick and disabled, and the elderly from dying in the streets. In short, it costs a lot of money to keep America a desirable place to live for all.

And it is only fair—only fair—to ask those who have the resources, who for whatever reason have benefited the most from this bountiful land, to pay higher tax rates than those who have benefited less. How much higher? That is, inevitably, a political question that will always have evolving answers because of a changing polity.

But I suggest that we pay more attention to the growing divide between wealthy Americans and everyone else while there is still time to narrow the divide without recourse to more drastic measures, which will undoubtedly come when social instability becomes impossible to manage with a simple tweak of the tax code. As Justice Louis Brandeis famously said,

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.

The relatively tiny progressivity involved in the restoration of the Clinton high-end marginal tax rates—which irritates Mitch McConnell so much he feels it necessary to slander liberals—is just one fix among many that should follow. 

Duane

Should Democrats Allow Us To Go Over That Cliff?

On Wednesday night’s edition of The Last Word, Lawrence O’Donnell, brilliantly, suggested a Democratic strategy for winning the war on taxes, in terms of getting rates raised on the top two percent of wealthy Americans.

He simply urged Democrats to let all of the Bush tax cuts expire on January 1 (go “over the cliff”) and then immediately introduce a bill to cut taxes only for those making $250,000 or less, leaving the Clinton-era rates in place for the wealthy. He argued that given the Republican Party’s undying loyalty to Grover Norquist and his tax pledge, they would have no choice but to support the Democratic proposal. How could they defend not voting for a tax cut for 98% of Americans?

O’Donnell reminded viewers that they would have to tolerate a short period in January where their taxes would go up, but after the legislation passed they would get a retroactive refund of those increased taxes.

Now, as I say, this appears to me to be a brilliant strategy and one that has potential. My only concern is that those Bush tax cuts for everyone under $250,000 should not become permanent, but should be modified in the future, after the economy has sufficiently recovered, so as to  help get and keep our fiscal house in order.

Other than that, it may be a strategy that works, although as O’Donnell suggested, Democrats may not have the, uh, huevos to pull it off. We shall see, but it remains an interesting concept.

GOP DNA

I don’t want to say a lot of Tea Party Republicans are delusional, but I have to.

I was sent an email this morning alerting me to a new article on Tea Party Nation. The article began with this:

I actually pity the Democratic Party these days even though I think it has brought the nation to ruin because, as Joseph Curl recently noted in a Washington Times commentary, “Democrats must spend, spend, spend, and spend. It’s in their DNA.”

Hmm. If spending is in Democratic DNA, somehow Democrats must have impregnated George W. Bush with it. And somehow they must have fornicated with the Republicans in Congress during Bush’s first six years in office and deposited a big wad of that spending DNA, which then produced big, fat deficit babies.

Because under W. Bush and his Republican Congress—who inherited budget surpluses—we saw nearly unprecedented spending. And you don’t have to take my word for it:

During his eight years in office, President Bush oversaw a large increase in government spending. In fact, President Bush increased government spending more than any of the six presidents preceding him, including LBJ.  In his last term in office, President Bush increased discretionary outlays by an estimated 48.6 percent.

During his eight years in office, President Bush spent almost twice as much as his predecessor, President Clinton.  Adjusted for inflation, in eight years, President Clinton increased the federal budget by 11 percent. In eight years, President Bush increased it by a whopping 104 percent. 

Now, that wasn’t written by me or Barney Frank, but by Veronique de Rugy.  Here is her bio:

…a senior research fellow at the Mercatus Center at George Mason University. She was previously a resident fellow at the American Enterprise Institute, a policy analyst at the Cato Institute, and a research fellow at the Atlas Economic Research Foundation…She writes a column for Reason magazine and is a regular contributor to The American, AEI’s  online magazine. She also blogs at The Corner at National Review Online and at Big Government.

You can see that she has some conservative chops. Here’s more:

Between FY2002 and FY2009, discretionary spending rose 96 percent…

Some argue that federal spending during the Bush years was so high because security needs drove up the budget… Whether this is true, the overall rapid rise of discretionary spending indicates that, here too, the administration and Congress made no trade-offs in the budget. If the administration and Congress wanted more security spending and wanted to be fiscally responsible, they should have found savings elsewhere in the budget.

Wanted to be fiscally responsible“? Republicans?

Still more:

President Bush added thousands of new federal subsidy programs during his eight years in office. In 2008, there were 1,816 subsidy programs in the federal budget that spread hundreds of billions of dollars annually to special interest groups such as state governments, businesses, nonprofit groups, and individuals. The number of subsidy programs has grown by 30 percent since 2000 and by 54 percent since 1990.

Let’s turn to another source, this time McClatchy Newspapers:

George W. Bush, despite all his recent bravado about being an apostle of small government and budget-slashing, is the biggest spending president since Lyndon B. Johnson. In fact, he’s arguably an even bigger spender than LBJ.

“He’s a big government guy,” said Stephen Slivinski, the director of budget studies at Cato Institute, a libertarian research group.

The numbers are clear, credible and conclusive, added David Keating, the executive director of the Club for Growth, a budget-watchdog group.

“He’s a big spender,” Keating said. “No question about it.”

Most of you know that the Cato Institute and Club for Growth are hard-core right-wing institutions, but somehow the memory of big-spending Republicans has faded and a delusion fathered by hatred of Barack Obama has taken hold of many minds on the right.

Besides the defense buildup and Homeland Security spending under Bush and the Republicans, here’s more:

Brian Riedl, a budget analyst at the Heritage Foundation, a conservative research group, points to education spending. Adjusted for inflation, it’s up 18 percent annually since 2001, thanks largely to Bush’s No Child Left Behind act.

The 2002 farm bill, he said, caused agriculture spending to double its 1990s levels.

Then there was the 2003 Medicare prescription drug benefit — the biggest single expansion in the program’s history — whose 10-year costs are estimated at more than $700 billion.

And the 2005 highway bill, which included thousands of “earmarks,” or special local projects stuck into the legislation by individual lawmakers without review, cost $295 billion.

“He has presided over massive increases in almost every category … a dramatic change of pace from most previous presidents,” said Slivinski.

And all that is without even considering the cost of the Bush tax cuts, which are still with us and—along with other Bush-initiated spending—still doing fiscal damage that Obama and the Democrats are getting blamed for.

Let’s go back to that delusional Tea Party Nation article and read that first paragraph again:

I actually pity the Democratic Party these days even though I think it has brought the nation to ruin because, as Joseph Curl recently noted in a Washington Times commentary, “Democrats must spend, spend, spend, and spend. It’s in their DNA.”

There. I feel better.

What Deficit Problem?

“In short, there isn’t much of a constituency for deficit reduction.”

—David Leonhardt, The New York Times, July 5, 2011

 

Most of Morning Joe this morning involved discussions on the impending or not impending crisis brought on or not brought on by the fast-approaching drop-dead or not drop-dead date to raise the debt ceiling. Democrats claim all hell will break loose and Republicans, at least in this narrow case, don’t believe in hell.

I suppose we shall find out, one way or the other.  But behind the debt ceiling discussions and, it seems, behind nearly everything that happens these days in Washington, looms our burgeoning national debt, a problem so serious that few people actually take it seriously.

Along those lines, David Leonhardt made a point in The New York Times yesterday that bears repeating: Most people talk a good game about the long-term debt crisis we face, but not many talk a good specific game about it.

One example is the Business Roundtable, a big-business support and lobbying group. Leonhardt:

When roundtable officials talk about the deficit, they use sober, common-sense language that can make them sound more reasonable than either political party.

But the roundtable is actually part of the problem.

Rhetoric aside, it consistently lobbies for a higher deficit. The roundtable defends corporate tax loopholes and even argues for new ones. It pushes for a lower corporate tax rate. It favors the permanent extension of the Bush tax cuts. It opposes a reduction in the tax subsidy for health insurance, a reduction that was part of the 2009 health reform bill. Oh, and the roundtable also favors new spending on roads, bridges and other infrastructure.

Leonhardt points out that “a group of top corporate executives” called the Business Council, along with the roundtable,

released a 49-page plan that simultaneously warned that projected deficits would “retard future growth” and called for policies that would add hundreds of billions of dollars a year to the deficit. That’s the essence of roundtable syndrome.

You might say they, like many Americans, want it all but don’t want to pay for it. 

Labor unions, in a sort of false moral equivalency, were also the target of Leonhardt’s keyboard:

Public sector labor unions have fought changes to pensions and work rules that could lead to less expensive, more effective government. Private sector unions — along with the roundtable — have defended the huge tax subsidy for health insurance, which drives up health costs.

At least, Leonhardt says, labor unions have “been willing to push for some tax increases.”

Yes, and those meager tax increases are at the heart of Republican resistance to any solution for not just the debt ceiling problem, but the larger debt problem. 

As many have pointed out, time and time and time again, there is no balanced-budget arithmetic that doesn’t include revenue increases.  And, as labor unions insist, the first place to begin in bringing in new revenue (which should really be seen as merely a restoration of the pre-Bush revenue stream) is with those who have benefited most from the economy these past 30 years.

Yet, all we have coming from business and Republican Party leadership—whose constituency includes those who can afford modest tax increases—is just another version of the voodoo arithmetic they used to get us into this mess: cut taxes and the free-market gods will do the rest.

Meanwhile, the debt monster created by such policies looms.

Michele Bachmann Wants To Raise Taxes, But Not On The Wealthy

Michele Bachmann, billed as a “Tea Party star,” appeared on ABC’s Good Morning America this morning and said some amazing things.  But before I get to those amazing things, I want to show how George Stephanopoulos set up the interview. 

It began with these revealing graphics created from the newest ABC News/Washington Post poll:

Let’s talk about these poll numbers,” Stephanopoulos began, “that seems to be very strong support for President Obama’s position in this budget fight and a rebuke of the House Republican position.” 

Bachmann responded:

I think if you look at those numbers that would be accurate, but I don’t think that totally reflects where the American people are coming from.  First of all, if we tax 100% of what everyone made who make $250,000 or more—everything they made—that would get us about 6 months worth of revenue—

STEPHANOPOULOS: Every bit helps, doesn’t it?

BACHMANN: Well, but it wouldn’t be enough.  I think that’s what’s shocking. We could take 100% of all the profits of every Fortune 500 company and that would give us 40 days worth of revenue. We could also take 100% of everything that the billionaires in this country own and that wouldn’t be enough to solve the problem.  So it’s really a matter of having everyone involved. Part of the problem, George, is that 47% of all Americans pay virtually no federal income tax.  So, we need to broaden the base.

Let’s stop here and analyze what she has said so far:

♦ The ABC/Post poll numbers aren’t accurate because they don’t fit her view of what the American people believe.

♦ She dodges the issue of the wealthy paying more taxes by turning the conversation to an absurd idea of confiscating all profits and all wealth (no matter how accurate her numbers), a typical Rush Limbaugh trick.

♦ She argues for a tax increase on all Americans.  Yes, she did, my teapartying friends.  She just sat there in front of God and George Stephanopolous and said,

“We need to broaden the base.”

What base?  The income tax base.  Those deadbeat Americans who aren’t paying any federal income tax need to cough it up.  How else do you “broaden” the income tax base without making people who aren’t paying income taxes pay them? 

Let’s be clear: In response to a question about widespread support among Americans for raising taxes on the wealthy, a popular Tea Party Republican (potential) candidate for president insisted that instead of the wealthy, the non-wealthy ought to pay more taxes!

Nevermind that most of those who don’t pay federal income taxes are among those with low or moderate incomes, who nevertheless pay Social Security and Medicare and sales and property taxes.

But she wasn’t done:

STEPHANOPOULOS: You say that everyone has to be involved and I think that’s reflected also in those numbers. A lot of Americans look at those numbers and say it’s wrong for seniors who rely on Medicare to get cuts when wealthy people get tax cuts extended.

BACHMANN: Well, and I think that again President Obama was the one who was behind the tax cut extension bill in December. That was his position.  And I would agree with senior citizens. We’re very concerned.  And I think that’s why a better name maybe for the Paul Ryan budget would be the “55 and under plan.”  Because no one 55 years of age or older will see any change whatsoever to Medicare. That’s an extremely crucial piece of information.

So, we don’t want any senior citizen to feel, or near senior citizen—I’m 55 years old, and so it wouldn’t apply to me either—and so there are no changes to people who are 55 years or older…

Besides the disgusting chutzpah of blaming Obama for the tax cut extension for the wealthy—when Bachmann and her Republican friends were holding hostage the unemployed and the economy last December—here we see, as Bachmann laid it out, the strategy for attacking Obama during the 2012 campaign season and defending the Republican “kill-Medicare and maim-Medicaid” budget plan:

♦ Claim Obama agrees that cutting taxes for the wealthy helps the economy since he signed off on those tax cuts.

♦ Claim that the Republican Party is really the party looking out for seniors since the GOP plan would leave a relatively generous Medicare benefit package in place until those seniors die, no matter how much hurt it places on those under 55.  Thus, Bachmann labels this “an extremely crucial piece of information.” 

It’s “crucial” because those 55 and older show up and vote in droves both in mid-term elections (around 60%) and presidential elections (around 70%).  And those who show up tend to vote for Republicans (in 2010, 59% of them). In fact, in 2010, even though voters 65 and older make up only 13% of the population at large, they accounted for a staggering 21% of the 2010 electorate. 

And the wealthy, of course, are part of the mix, too. A Project Vote study reported that in 2010:

The number of ballots cast by Americans from households making over $200,000 a year increased by 68 percent compared to 2006.

It’s not hard to understand how Republicans are planning their path to victory in 2012.

But despite Bachmann’s extremely crucial piece of information, Democrats have their own, which they need to broadcast night and day:

Republicans will stop at nothing to defend their rich constituents and they want to solve all of our budget problems on the backs of the poor, the disabled, and the working class.

Just think about this: The nonpartisan Congressional Budget Office estimates that those unfortunate folks under 55 today, if the GOP has its way with its budget plan, would be expected to fork over more than two-thirds of the cost for their health care by the year 2030, even while paying current Medicare benefits for those currently 55 and over.

If that crucial piece of information doesn’t get the young and non-wealthy out to vote next year, then nothing will.

Senator McCaskill And The Budget

I e-mailed Senator Claire McCaskill a couple of days ago. Here’s what I wrote:

Please—please—do not make any more cuts in the budget (Democrats have made plenty) without getting something in return from the Republicans, like some concessions on taxes.  We can’t balance the budget without addressing the shortfalls in revenue.

Republicans have starved the government, causing a lot of the “crisis” today.

And as a Democrat, you have to believe that we can’t balance the budget by drastically reducing spending important to your constituents, particularly the most vulnerable among them.

I ask you, therefore, to lead the way in defending the least among us, as well as working and middle class Americans. Compromise with the Republicans, yes.  But don’t cave in.  Get a commitment from them that revenues have to be on the table before you agree to any more cuts.

And as the President suggested today, force them to remove the non-fiscal nonsense from the spending bills.

Thanks

Because this is the Internet, I have the luxury of posting her complete reply below (I also left in the writing errors), which was designed not as an answer to my specific question, but as a generic answer to “the way things are run in Washington.”  In other words, this response is a political response, which I fully understand with an election looming next year.

However, while I didn’t expect a personal reply from a busy U.S. Senator, I also didn’t expect a reply that essentially boasts about her lack of loyalty to the Democratic Party and misrepresents why people like me voted for her in the first place.

You will also notice that nothing in her response addresses my revenue concerns, although she does mention her joining together with “Republican Senator Bob Corker of Tennessee to introduce legislation to hold all government spending to 20.6% of gross domestic product (GDP), the historical average over the last 40 years.” 

How hard would it have been, in that context, to at least mention the irresponsible Republican defense of tax cuts for the wealthy?

In any case, read it and weep liberals.  But remember that the moderate Senator McCaskill is the only horse we have in the upcoming race.  The alternative is unthinkable.

March 11, 2011 

Dear Mr. Graham,

Thank you for contacting me regarding the way things are run in Washington.  I appreciate hearing from you, and I welcome the chance to respond.

Missourians do not want a rubber-stamp for any President or party leader.  They want their representatives in Washington to represent their interests.  We are the Show-Me State, after all. As your Senator, I have worked to be an independent voice for Missouri.  I think my record bears that out; I vote against my party more often than almost any other Senator.

Most importantly, Missourians sent me to the Senate with a clear priority: address the size of our federal government and Washington’s runaway spending.  Missourians, like me, recognized that political jockeying had led to billions of dollars in pork-barrel spending, and that Washington was continuing to push off making tough decisions to put America on stable fiscal footing.  That is why since day one of my time in the Senate, I have fought on behalf of Missourians to get our Nation’s fiscal house in order.

One of the first priorities I set in Congress was to end the corrosive and corrupting practice of political earmarking of federal dollars.  I’m one of only a few Senators who has have never requested an earmark and one of only two Democrat Senators who refuse to seek them today.  For years, the earmarking process has been shielded from oversight and accountability, with funding for pet projects often being awarded based on political influence instead of merit.  I frequently oppose spending bills that are bloated with earmarks and have introduced legislation to ban earmarks.  I voted against the 2009 Omnibus Appropriations Act and the Consolidated Appropriations Act of 2008 and opposed an omnibus appropriations bill initially offered to fund government for this year that was, astonishly [sic], laden with earmarks.  In fact, I have never voted for one of these combined “omnibus” appropriations bills that spend too much and are packed with earmarks.

Since 2007, I have also consistently voted to reform and, more importantly, end earmarking. Most recently, in November 2010, I joined Senators Tom Coburn (R-OK), John McCain (R-AZ), and Mark Udall (D-CO) in forcing a vote on legislation that would ban earmarks through FY 2013.  In a landmark breakthrough, as a result of efforts like this and a clear message from Americans like you to end earmarking, Senate Appropriations Committee Chairman Daniel Inouye recently announced that no earmarks will be included in appropriations bills this Congress.  Congress needs to be honest when it comes to spending taxpayer dollars, and this is a good first step towards that goal.

You will also be interested to know that I have worked hard over the last few years to install controls in the Senate to reign [sic] in spending in a broader way.  In 2009, I introduced a Pay-As-You-Go (PAYGO) bill (S. 1600) that would trigger across the board spending cuts unless all new direct spending or tax cuts are deficit-neutral (in other words, if politicians want to spend more, they can only do it if they can identify resources to pay for it).  I am pleased that the Senate went on to enact a similar version of my bill.  Also, early in 2010, Republican Senator Jeff Sessions of Alabama and I joined together to introduce legislation to impose caps on discretionary spending for the next three years.  Unfortunately, this bipartisan bill, fell one vote shy of the 60 votes needed to move it forward.  Senator Sessions and I felt so strongly about this amendment, however, that we forced the Senate to vote on it four times and will continue to seek to get it passed — the Senate cannot be let off the hook on controlling spending and just like long term and consistent efforts to end earmarks have finally led to success, I hope a similarly sustained effort will lead to victory on capping spending on a bipartisan basis.

I was also pleased to support efforts to create a fiscal task force to study spending and our deficit.  This ultimately led to the creation of a bipartisan Fiscal Commission.  The report and recommendations of that commission, which won significant bipartisan support and was praised as courageous, represents an important marker in establishing a path to addressing the fiscal crisis in America and I am closely studying the recommendations.  I was particularly pleased to see the commission provide a comprehensive path to fiscal order.

As the 112th Congress opens, I will continue to fight to pass spending caps and work to see the recommendations of the Fiscal Commission fully considered.  Earlier this year, I also embarked on another bipartisan effort to limit spending when I joined Republican Senator Bob Corker of Tennessee to introduce legislation to hold all government spending to 20.6% of gross domestic product (GDP), the historical average over the last 40 years.  This would decrease our federal spending by nearly $400 billion.  I am proud that the bill also eliminates oft-used budget gimmicks in order to take into account the true reality of our fiscal situation. I assure you that I will continue to seek other ways to address federal spending, with Republicans and Democrats who are willing to work together to address our nation’s debt crisis.

If the government is going to live within its means, I also believe we need to cut waste out of federal spending.  I have taken a hard line against any waste, from earmarks to no-bid contracts.  That is why, as Missouri’s former state Auditor, I came to the Senate and set my sights on fighting fraud, waste and abuse in government contracting.  In 2007, I worked alongside my colleauge [sic], war-hero Jim Webb, to create a modern day Truman Commission that would root out waste in war contracting.  The Commission on Wartime Contracting has been hard at work for three years now and the final report of their investigation is due this year.  In 2009, I was also made Chair of the Senate Subcommittee on Contracting Oversight, a new Subcommittee I worked to create because of the clear need for more investigation into abuses in federal contracting.  From this post, I initiated an investigation into the waste and abuse at the hallowed ground at Arlington National Cemetery and demanded improved accountability of spending in Iraq and Afghanistan, among many other things.  I have been to able to pass legislation as a result of these efforts to address the crisis at Arlington, provide controls on private security contracting and limit loopholes in law that provide for unlimited sole source contracting to certain companies and this work continues.

I have supported other anti-waste initiatives as well, such as co-sponsoring a bill to create a line item veto and voting to establish “sunset commissions” to identify and eliminate government programs that are no longer effective.  Finally, I have worked consistently to protect whistleblowers both within and outside government who expose wasteful spending and to empower our nation’s primary fraud fighters, inspectors general.  In my first year in the Senate we, in fact, won a major strengthening of whistleblower laws for those who report waste at government contractors working for the Defense Department.

I want you to know that it hasn’t been an easy fight.  My fiscal reforms have received criticism from Senate colleagues and countless special interest groups since the day I arrived in the Senate in 2007.  But Missourians didn’t send me to Washington to make the easy choices. They sent me to be an independent voice for Missouri, and they are loud and proud about the need for fiscal responsibility.  Well, the buck stops here, and I will continue to fight tooth and nail to reign [sic] in our out-of-control federal spending.

Again, thank you for contacting me. Please do not hesitate to contact me in the future if I can be of further assistance to you on this or any other issue.

Sincerely, 

Claire McCaskill
United States Senator

Mitch McConnell: No New Taxes, Take It Or Leave It

It’s clear from the election last year, we will not be raising taxes,” Republican leader Senator Mitch McConnell said this morning on Morning Joe. He was responding to a question about the budget.

That unequivocal statement is why, my friends, the battle will go on.  Until the GOP leadership moves off that position, nothing of substance will happen.  I hope.  Democrats, especially President Obama, haven’t exactly shown themselves to be competent negotiators.

McConnell also said, when asked why the Republican Party doesn’t take the lead with regard to entitlement reform, that it was because “I’m not the President.”  He said he has told President Obama both publicly and privately that divided government is the time to get something done and, “We’re ready to go.”

Ready to go? Hardly. Oh, they’re ready to go on spending cuts. If Democrats let them, radical Tea Party Republicans will suck the marrow out of the budget. But responsibly raising taxes to pay for the government people say they want? Not a chance, McConnell said.  That’s some compromise offer.  If Democrats agree in any way to this bargain, they deserve permanent exile.

McConnell used the example of the Reagan-O’Neill compromises in the 1980s and, most egregiously, the Clinton and congressional Republican compromises in the 1990s that led to budget surpluses as examples of how things can get done during times of divided government.

Except, naturally, McConnell ignored one teeny, tiny, tittle of a fact.  What he doesn’t mention, and Democrats shouldn’t let him ignore, is that in 1993, Clinton and the Democrats raised taxes responsibly to pay for government. Imagine that. Asking the American people to pay for the government they have voted for over the years. How novel that sounds today.

That law, known widely as the Deficit Reduction Act of 1993, received exactly ZERO Republican votes. ZERO. And what followed that responsible legislation was years of prosperity and job growth.

The GOP confirmed its fiscal irresponsibility via the infamous cuts in 2001 and 2003 that essentially repealed the 1993 law and set us back on the road to massive deficit spending.  And if Democrats let the Tea Party have its way, the home-bound chickens from that malgovernance will roost in a much smaller and less effective government hen house.

As I said, if Democrats yield to the my-way-or-no-way Republicans, led by anti-government teapartiers, then the Democratic Party deserves the dissolution it most surely will suffer.

The Case Against Mitch Daniels, Part 1

Indiana Governor Mitch Daniels is running for president.

Oh, he hasn’t said so for sure, but he is.  I watched him on the Fox-Republican “News” Channel yesterday and you can just see it in his nervous eyes. 

But one of the real reasons I am certain he is running is because he took the trouble to downplay his time serving as a W. Bush official. Unfortunately for him he was Bush’s first Budget Director. He served the administration for almost two and a half years, when drunken conservatives were spending Clinton surpluses on millionaires and billionaires and two wars and a Homeland Security behemoth and a new entitlement program, Medicare Part D.

As the Indianapolis Star reported in 2005:

Bush gave Daniels the nickname “The Blade,” but the administration’s tax cuts combined with an economic downturn put Daniels in the awkward position of watching a $236 billion annual surplus turn into a $400 billion deficit during his 29-month tenure.

Whoops!  But don’t worry. It wasn’t his fault.  He told Fox,

…nobody was less happy than I to see the surplus go away, but it was going away no matter who was the president.

Ha. That’s funny. But it gets better. He said to NPR’s Steve Inskeep this morning:

DANIELS: Look, I was proud to serve in that administration, but that surplus was going away, and it wouldn’t have mattered who was president, let alone in the supporting role of budget director. We had the collapse of the bubble, the recession…

INSKEEP: After 9-11.

DANIELS: Then 9-11, with all the costs that came with that, the whole new category we call Homeland Security and two wars — so, I mean, that deficit [sic] was going away and it wouldn’t have mattered who was in any of those jobs.

Another laugher. But this time with a twist. That “[sic]” NPR had to insert in the transcript tells a tale. A nervous tale.  He meant surplus, obviously, but deficits and his role in creating them are on his mind. The man is a little worried about how his role in the Bush administration’s mismanagement of the economy will play in Peoria.

I want to note that Inskeep should have asked him why, with all the massive government spending the Bush administration believed was necessary, didn’t Daniels advocate actually paying for some of that stuff?  Maybe someday out on the campaign trail we’ll get an answer to that question.

But Inskeep did get close:

INSKEEP: Would you not have, would you not have approved of those tax cuts?

DANIELS: I did approve of the tax cuts. And by the way, they were widely credited — and still are, by honest people, with the shallowness and the swiftness of recovery from that recession.

Like a good conservative, he did approve of the tax cuts. But what about that business about the “shallowness…of recovery“?  I, for one, won’t argue with that anxiety-induced admission.  But he’s clearly nervous talking about this issue.  That’s not good for  a man George Will claims has the “charisma of competence.”

But I want to continue on with what he said next:

That was lucky by the way, it’s only fair to say, President Bush never proposed those tax cuts as a stimulus as we now see matter, ’cause nobody knew we had a recession starting up. But the timing was somewhat lucky.

Now, let’s look at what Bush’s budget czar is saying here:

1) The Bush tax cuts had a positive effect on the economy: “they were widely credited…with…the swiftness of recovery from that recession.” 

There is a dispute whether those tax cuts had anything to do with the recovery. But let’s move on:

2) The tax cuts, which have deprived the treasury of at least $2 trillion and counting, were not intended as government stimulation of economic growth: “That was lucky by the way…President Bush never proposed those tax cuts as a stimulus.”

Hmm. Just lucky?  Doesn’t Mr. Daniels know that the First Law of conservative economics is that tax cuts = economic growth?  And if he thinks they weren’t designed to enhance economic growth, what was their purpose?  To destroy our fiscal health?  Huh?

And surely he knows that George Bush did in fact sell the 2003 tax cuts as stimulative. Bush said the following, when he was signing into law the final phase of the Bush tax cuts:

By insuring that Americans have more to spend, save and invest, this legislation is adding fuel to an economic recovery. We have taken aggressive action to strengthen the foundation of our economy so that every American who wants to work will be able to find a job.

It’s obvious Governor Daniels wants to run for president and wants us to forget his time and part in the previous mismanagement of our nation’s finances.  I don’t blame him for that. But the Bush tax cuts were a big piece of that mismanagement and are responsible for a big chunk of our debt, and their legacy continues.  Yet Daniels, who sees the debt problem as the new “Red Menace,” has learned exactly nothing from his previous role in the mismanagement of the economy:

INSKEEP: Uh, is the problem grave enough that those tax cuts should be allowed to expire? They’ve now been extended through 2012.

DANIELS: I think it’d be a catastrophic mistake…I think raising taxes right now in a very fragile economy, still, would be a real mistake.

Let’s see here.  Back in 2001, when we had budget surpluses, Republicans, including Daniels, argued that was the time to cut taxes. “Give Americans their money back,” they insisted.  Now, when we have enormous deficits, we must keep the cuts in place.  “We can’t afford to raise taxes,” they insist.

Perhaps you guessed by now that there is never—never—a time in which conservative Republicans believe taxes should be such that they pay for the size of government Americans have come to love.  And Daniels, who is widely praised as the best hope to defeat Obama in 2012, represents everything that got us to this point of unsustainable debt.

He also represents everything that is wrong with conservative thinking on today’s hot topic, public sector unions.  As NPR pointed out this morning, it didn’t take Daniels long to establish himself as a full-tilt conservative union-buster:

In 2005 on his first day in office, Indiana Gov. Mitch Daniels signed an order ending collective bargaining with public employee unions. He said it freed him to turn over some state jobs to private contractors.

If that doesn’t energize the labor movement against him, nothing will.

But beyond that, should Daniels decide to run, as I believe he will, Democrats need to hang the Bush tax cuts around his Bush-administration neck and make him defend them again and again, even while he hypocritically tries to convince voters that a deficit menace is our nation’s biggest threat.

You just can’t claim you’re serious about the debt problem and take taxes off the table.

The Missouri Budget Crisis And The Year 1985

Yesterday’s editorial in the Joplin Globe included this bad news for Missourians:

The state faces a $500 million to $700 million budget deficit for fiscal year 2012 that must be resolved by the Legislature and Gov. Jay Nixon. There is little hope for substantial federal funding to offset that shortfall.

The only news worse than that is what the Globe editorial said in response to that bad news:

We urge our governor and legislators in the upcoming legislative session to continue to make the painful choices necessary to keep Missouri state government living well within its means.

Let’s keep it that way with responsible state and local government and the acknowledgment from our residents that government is not a cure for all that ails society today.

Where does one start with such, well, with such reactionary Republican ridiculousness?

Okay, I’ll start with being the first resident to acknowledge that government is not a cure for all that ails society today.  There.  That’s done.

Now, to the “painful choices necessary to keep Missouri state government living well within its means” nonsense. 

It has become obvious that conservative governance in this state, as well as in the country at large, has undertaken a “starve the beast”—the government is always the beast—strategy.   Nationally, we are paying less in federal taxes as a percentage of GDP than at any time since 1950, which is illustrated nicely by this graph:  

Notice the increase in revenues resulting from the famous 1993 tax increase (which created budget surpluses) and the decline in revenues resulting from the Bush tax cuts (which created massive deficits).  And notice that the conservative strategy of starving the beast is working to the extent that nearly everyone is now talking about entitlement cuts and other government-reducing exercises.

As for the states, according to the conservative Tax Foundation, there are only 15 states with a lower combined tax burden than Missouri.  But more disturbing is, in the words of  The Missouri Budget Project, “the erosion of Missouri’s revenue base since 1985”:

Missouri General Revenue spending as a portion of the economy is below the 1985 level.  The Hancock Amendment to Missouri’s Constitution restricts state general revenue growth to the ratio of general revenue to personal income that existed in the 1980s. The ratio of the two measures provides a picture of how far Missouri state general revenue has declined when compared to the state’s economy. State general revenue in FY 2010 was just 3.124 percent of state personal income, well below what it was in 1985 and nearly $2 billion below the Hancock “lid.” 

Here’s the chart:

Let this sink in:

State general revenue in FY 2010 was just 3.124 percent of state personal income, well below what it was in 1985 and nearly $2 billion below the Hancock “lid.”

Was Missouri an unfit place to live in 1985?  Were businesses and people fleeing the state? Were things so bad that we can’t see our way to go back to the revenue percentages of that time? 

Of course not.

That $2 billion would solve the “crisis” we face now, without the Joplin Globe fretting over “painful choices,” which really means painful budget cuts that naturally hurt the most vulnerable among us.

How about an editorial on that?

Obama Tax Deal Makes It Even Better To Be Rich

I was all set to just get over it.  To bite my tongue and quit ragging on Obama and the Democrats for paying ransom to the Republicans over the tax issue.

Then, I came across a depressing article at Bloomberg Businessweek, written by Ben Steverman.  If you’re still trying to recover from the madness, I advise you not to read on.

It’s not that there was anything new in the article, in terms of what we already knew about the general ramifications of the Obama-McConnell tax deal (doesn’t that just roll off the tongue?).  It’s just that the article lays it out in all its ingloriousness.

Titled, “It’s a Great Time to Be Rich“—by the way, when isn’t it a great time to be rich?—the article begins:

Under legislation approved by the U.S. Senate on Wednesday, Dec. 15, and now moving on to the House, savvy wealthy Americans would be able to capitalize on an environment in which their tax rates on income and investments remain at historic lows. Also, new rules would make it possible to pass on fortunes to heirs with less fuss and lower taxes than all but a brief period of the past 80 years. It’s a far cry from the 70 percent bite the federal government took out of the largest incomes and estates as recently as 1980.

Here are some facts from the article (all the highlights, italics, and teardrops in the following are mine):

Except for a period from 1988 to 1992, the top [income] tax rate has never been this low since 1931.

Says Indiana University law professor Ajay Mehrotra:

The most surprising thing is that rates have remained at this level even as the U.S. has been fighting two wars, in Afghanistan and Iraq. Historically, income taxes on the wealthy have spiked during wartime: The first income tax was initiated during the Civil War and then later repealed. The top rate on income hit 77 percent in 1918, during World War I, and 94 percent from 1944 to 1945, during World War II.

Starting in 2010, all taxpayers, including those in high income brackets, could convert traditional, tax-deferred individual retirement accounts, or IRAs, to tax-free Roth IRAs. Importantly, in 2010 only, the law allows taxpayers to spread the tax payments required by such conversions over 2011 and 2012. When it looked like tax rates would rise in 2011 and 2012, this looked like a bad deal, Baxley says. Now, with rates remaining the same over the next two years, a Roth conversion can be a lucrative move.

As for sources of income, this shocked me:

For the country’s wealthiest families, income from wages can be far less important than income from investments…18.1 percent of all Americans’ cash income comes from business ownership or capital investments, compared with 64.5 percent from labor. For those in the top 1 percent of earners, however, business and capital income make up 53.6 percent of income and labor accounts for 35.3 percent.  Thus… taxes on capital gains and dividends can be far more important to the rich than income tax rates. The tax compromise extends a 15 percent top tax rate on long-term capital gains and dividends enacted in 2003, which is the lowest rate since 1933. The top capital-gains rate was 77 percent in 1918 and, since 1921, its highest point was 39.9 percent in 1976 and 1977—though certain gains could be excluded from taxation.

Let’s be clear:  For the top 1% of earners, their top tax rate on more than half of their income is 15%!  That’s why billionaire Warren Buffet can lament that he is taxed at a much lower rate than the folks who work for him.

As for estates, excluding the 2010 anomaly, the Obama-McConnell estate tax will be the lowest since 1931, and that’s only on individual estates over $5 million. And,

The number of people who must worry about estate taxes, already tiny, would shrink to less than 0.2 percent of the population… In 2009, when the exemption was $3.5 million, 14,713 people had fortunes large enough to file taxable estate returns, according to the IRS. Just 4,296 of those people had estates of $5 million or larger… From 1942 to 1976, the estate tax rate was 77 percent for estates over $10 million, and only estates under $60,000 were exempt from the tax entirely.

Finally, for those unfortunate folks who have to fret over the fact that their estates are over the $5 million exemption (or $10 million for husband and wife), we find that,

the new tax legislation is written to make it much easier to manage their fortunes. For example, individuals can easily pass their remaining tax exemptions on to their spouses after death, without creating complex trusts. Also, new rules treat gifts to children during a donor’s lifetime the same as those made after death, making it easier to pass on estates before assets appreciate and incur extra taxes.

And,

Low interest rates make this the perfect time for many clients to set up trusts like Grantor Retained Annuity Trusts, known as GRATs. In a GRAT, parents loan assets like stocks or even an interest in a private business to the trust at the lowest interest rate possible under the law, which is set each month by the IRS. If the value of those assets increases over time, the GRATs’ beneficiaries reap any benefit above that interest rate. Luckily for those who set up GRATs now, interest rates are at record lows—the IRS set the December rate at 1.8 percent.

Obama and other Democrats had sought to limit the use of GRATs, but failed. “That’s a wonderful technique for parents looking to pass assets on to children at nearly zero [tax rates],” says Jennifer Immel, senior wealth planner at PNC Wealth Management.”

I think I’m gonna be sick again.

Republican Congressman Says Next Year’s House Can “Correct” The “Damage”

I was listening earlier to the House debate the Obama-McConnell tax deal, also known as the Free The Middle Class And Unemployed From The Republican Kidnappers Act of 2010.  The bill will add $858 billion to the nation’s debt, including $32.5 billion for the estate tax giveaway over the next two years, according to CBO estimates.

Along comes Rep. Tom McClintock, a Republican from California, who warns the House of peril should the tax cuts expire and we return to those horrible 1990s, when we were enjoying budget surpluses.  But I want to look at something else Congressman McClintock—who supports the tax deal—said this morning:

Some of my fellow conservatives object to the 15% of this bill that spends money we don’t have, and I agree. But that damage can be corrected through off-setting spending reductions next year. The new Republican House majority can do that without the Senate or the President simply by refusing to appropriate funds—and is committed to doing so.  But it cannot rescind the taxes next year without the Senate and the President…

Now, this, my friends, is instructive.  If Mr. McClintock is correct, if next year the tea-drunk House can simply refuse to fund the government to the tune of $129 billion—15% of the tax deal—then don’t we have a right to know how they plan to do that, before Democrats agree to this tax cut package?

Republicans Say They Will Kill The Hostages

Head hostage taker, Mitch McConnell, warned any would-be rescuers that if they tried any funny business, he would kill the hostages with tax hikes:

From Roll Call:

The Kentucky Republican’s comments came in a statement shortly after the Senate agreed to move toward final passage of the tax measure, which would extend Bush-era tax cuts for two years and unemployment benefits for 13 months. McConnell struck the deal with the White House last week.

“We now urge the House leadership to bring this bipartisan agreement to a vote without political games or partisan changes designed only to block this bill’s passage in the House. If the House Democratic Leadership decides to make partisan changes, they will ensure that every American taxpayer will see a job-killing tax hike on January 1st,” McConnell said in the statement.

Nothing—absolutely nothing—could be clearer:  The Republicans are ruthless bastards, when it comes to protecting their moneyed constituents.

 And they don’t give a damn about anyone else.

Meanwhile, Mitch McConnell has a special message for 99% of the American people.  See if you can guess what it is:

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Let’s Have A Debate Over The Estate Tax

Maryland Congressman Chris Van Hollen chaired the Democratic Congressional Campaign Committee this year and thus saw, up close and personal, more than 60 of his fellow Democrats defeated—many of whom lost their seats for making some tough votes in support of President Obama. 

Last week, Mr. Obama accused some of them of “playing games” and being “sanctimonious” over his deal with Republicans on the tax cut issue.

Today, on The Daily Rundown, Van Hollen was asked about whether Democrats in the House would eventually support Obama’s deal.  He specifically mentioned the Estate Tax compromise, which has irked Democrats all over the country, and he indicated that Democrats want to see a change in that part of the deal before the package comes up for a vote in the House. 

He then turned the question around:

Why don’t we put this question to the test:  Are Republicans really willing to hold up tax relief for millions of Americans—middle class Americans and others—in order to provide a $25 billion hit to the deficit that benefits 6,600 estates at an average benefit of $1.8 million?

We’ve never had that debate.

That is the point, isn’t it?  We’ve never had that debate. 

It’s about time we did.

Here is the segment from The Daily Rundown:

Obama Calls Republicans “Hostage Takers”

“I think it’s tempting to not negotiate with hostage takers, unless the hostage gets harmed.”

—Barack Obama

Having just watched President Obama’s extraordinary news conference, I assume that his performance, while defensive, will likely stymie most serious Democratic Congressional opposition to his compromise with Republicans.  It is very difficult to play offense against your own quarterback, and I suspect that a majority of liberal legislators will make some noise and then swallow hard and accept this deal.

And if his “hostage takers” response to Chuck Todd’s question about Republican recalcitrance gains widespread attention, or even if it doesn’t, perhaps Mr. Obama will continue using it as his theme going forward, while he engages Republicans in the battles to come:

I think it’s tempting to not negotiate with hostage takers, unless the hostage gets harmed. Then people will question the wisdom of that strategy.  In this case the hostage was the American people and I was not willing to see them get harmed.

Rarely has Mr. Obama, when not in campaign mode, been so stark about the methods of Republicans.  And although he could have been much more passionate in his criticism of his political enemies, calling them “hostage takers” at least puts the issue in terms Americans can understand.

I will say, however, that I find it strange that Mr. Obama, towards the end of the event, seemed to express much more passion against those on his own side, who, he insists, fail to appreciate what he has done so far.

While he has a point about that in many cases, some of us wish he would get at least equally passionate about what Republicans have done and what they intended to do, if it weren’t for the President’s willingness to compromise with them.

In any case, President Obama challenged Republicans not to assume he could be bested so easily in the future.  These were unique circumstances, he warned.

On that, we shall see.

Obama’s Arms Are Tired, But The Battle Goes On

“After the victory, the Lord instructed Moses, ‘Write this down on a scroll as a permanent reminder, and read it aloud to Joshua: I will erase the memory of Amalek from under heaven.’”

—Exodus 17:14

In Exodus 17 we find the story of the desert-wandering Israelites in their first battle “test” against a collection of nomadic raiders called the Amalekites. It’s a typical Old Testament case of good guys versus bad guys, the righteous versus the unrighteous.  Democrats versus Republicans.

As background, the wandering Jews had been so upset with the harsh conditions of their new-found freedom that they began to question the motives of their leader, Moses, who had successfully led them out of Egypt:

Are you trying to kill us, our children, and our livestock with thirst?

Moses, not one to appreciate the finer points of leadership, growled at the Lord:

What should I do with these people? They are ready to stone me!

Now, the Lord, being a crafty and inventive Deity, told Moses to go in front of the people and strike his staff against a rock and “water will come gushing out. Then the people will be able to drink.”

Needless to say, Moses did as he was told, since his arms were way too short to play Joe Frazier to a celestial Muhammad Ali, and the people drank heartily from the gushing rock.

About this time the Israelites were attacked by the “warriors of Amalek.” Moses texted an up-and-comer, Joshua, and ordered him to,

Chuze sum men 2 go out & fite the army of Amalek 4 us. Tmrrow, I will stand at top of hill, hold the staf of God in my hand.

Apparently, Moses believed there wasn’t anything he couldn’t do with God’s staff, except maybe cure cancer and other horrid diseases that made life for the Hobbesian ancients rather nasty, brutish and short. 

In any case, Joshua followed orders and went out to fight the Amalekites, and Moses held up his end of the bargain by climbing atop a nearby hill and holding up the staff of God. The Bible gives us an account of the effectiveness of the staff strategy:

As long as Moses held up the staff in his hand, the Israelites had the advantage. But whenever he dropped his hand, the Amalekites gained the advantage.

Now, you can see that after awhile even Moses might get tired of standing there with his arms raised for so long.  And you might think that God, who is able to do all things, might give him some supernatural strength, enabling him to keep his arms raised long enough for Joshua to finish the job on the Amalekites.

Nope. It just doesn’t work that way in the counter-intuitive world of Old Testament reality. The Bible reports:

Moses’ arms soon became so tired he could no longer hold them up. So Aaron and Hur found a stone for him to sit on. Then they stood on each side of Moses, holding up his hands. So his hands held steady until sunset. As a result, Joshua overwhelmed the army of Amalek in battle.

This story, like all Bible tales, holds a lesson for us today.

As the Democrats battle the Republican Amalekites during this lame-duck session, a tired Moses Obama will need his Aarons and his Hurs to keep the staff of God held high and to secure victory for working and middle class American Joshuas.

And I submit that Obama’s only Aarons and Hurs are the liberals in the House and Senate, particularly in the House. 

Some potential good news from Howard Fineman:

WASHINGTON — While the public focus of the Great Tax Battle remains riveted on the U.S. Senate, top Democratic insiders are privately worried about the real lame-duck end game: a last-minute, potentially deal-breaking revolt by Democrats in the House.

Fineman goes on to say that any Obama-Republican deal on the Bush-era tax cuts may run into trouble in the House because:

The biggest problem — most seem to have forgotten — is in the House. Many seem to have forgotten that it is the House, which must originate tax bills, that last week voted by a 234-188 margin to limit the extension of the Bush tax cuts to families making less than $250,000 — Obama’s original campaign pledge.

While it’s doubtful that liberals in the House or the Senate can get to President Obama in time to keep his arms from failing on the issue of the Bush tax cuts, there is always an audacious hope—the same audacious hope our Moses Obama once championed—that they can.

Meanwhile, out on the battlefield of the American economy, there are shrinking middle class incomes and joblessness.  And the Amalekite Republicans are attacking the good guys by cutting taxes for the wealthy and killing unemployment benefits.

Roy Blunt’s Christmas Gift To Southwest Missouri: Your Taxes Are Going Up, Unless Obama Comes To The Rescue

Now, at least, House Republicans have made it official

Yesterday, 168 Republicans (with three exceptions, including Ron Paul) voted to raise taxes on the middle class next year.  Fortunately, that won’t happen, thanks to Democrats, who voted overwhelmingly to extend the existing lower tax rates for those families making less than $250,000.

Our own Roy Blunt, which should surprise nobody, voted to allow taxes to go up on everyone next year, believing President Obama—in cooperation with Senate Republicans—will bail him out with a last-minute compromise that will make the House vote yesterday merely symbolic. 

But what symbolism it is.

Even  if Obama does come to the Republicans’ rescue, we will still have it down for posterity that Southwest Missouri’s 7th District Congressman voted to raise the taxes of every single one of his tax-paying constituents, just to ensure the wealthiest among them will continue to receive a tax break averaging about $100,000 each. 

That $100,000 tax break represents about three times the median income of the 7th District, which, according to Wikipedia, is around $33,000. 

Merry Christmas Roy Blunt voters!

Will The Last Democrat Out Turn Off The Lights?

Shannon McCaffrey reports on a disturbing, but not surprising, result of the 2010 election:

Staggering Election Day losses are not the Democratic Party’s final indignity this year. At least 13 state lawmakers in five states have defected to Republican ranks since the Nov. 2 election, adding to already huge GOP gains in state legislatures. And that number could grow as next year’s legislative sessions draw near.

These 13 state lawmakers, frauds all, did not abandon the Democratic Party for any other reason than the lust for power.  These people ran as Democrats, took Democrats’ money, and got elected as Democrats. Yet, today, less than a month after the election, they are Republicans.

And in some cases, the switches made a significant impact:

In Alabama, four Democrats announced last week they were joining the GOP, giving Republicans a supermajority in the House that allows them to pass legislation without any support from the other party. The party switch of a Democratic lawmaker from New Orleans handed control of Louisiana’s House to Republicans for the first time since Reconstruction.

Shameful and disgusting.

Since I was once a bull-headed conservative, I can understand switching political allegiances due to disagreements with a party’s philosophy. But despite what these opportunistic scoundrels say, there wasn’t much of an ideological component to their betrayal of the Democratic Party.

Democrats, including Barack Obama, campaigned on an aggressive agenda in 2008, some of which they actually tried to convert into law.  After assuming office in 2009, they never “moved left” one inch, in terms of what they ran on to get elected in 2008. And the turncoats who defected to the GOP knew all that.  The only thing that has changed since then is that Republicans made substantial gains this time, and that means a period of wandering in the political wilderness, something that phony Democrats just can’t tolerate.

McCaffrey writes:

Most of the party swaps are in the South, where GOP rule is becoming more entrenched and Democrats – many of them already more conservative than their counterparts elsewhere – are facing what looks like a long exile in the minority.

The prospect of a “long exile” is unacceptable to people who never cared much about anything except “relevance,” or to put it more starkly, power. And it’s no accident that most of the disloyalists were in the South, The Land of Betrayal.  Remember the Civil War?

In any case, I write all of the above to make a point about those who still retain the Democratic label but appear to be backing away from the principles it is supposed to represent. I speak of President Obama and certain members of the still Democrat-controlled Congress.

If anything should differentiate Democrats from Republicans, it is the issue of extending the Bush tax cuts for wealthy Americans. Not only have Democrats been on the fiscally responsible side of this argument—that the wealthiest Americans should see their rates go back to Clinton-era levels—but a majority of Americans agree with them. And everyone, except ideologically-poisoned Republicans, understand that giving rich folks tax cuts has almost no stimulative effect.  It’s simply just a giveaway to a Republican constituency.

Yet, I hear talk everyday that Democrats are ready to compromise on the issue, despite the fact that they still run the bleeping government.  It’s really just incomprehensible to me.  Oh, I understand the dynamics of next year’s mix of Tea Party Republicans and weak-kneed Democrats, but this isn’t next year.  It’s now.  And Democrats still have an overwhelming advantage in the House and the Senate.

At the very least, Democrats should put up a bill that includes tax relief for only middle class Americans and force Republicans to vote against those tax cuts. Republicans claim that Democrats don’t have enough votes in their own caucus to pass such a bill.  Let’s find out. Rather than talk about compromising with Republicans, Obama should be twisting the arms of his fellow Democrats.  That’s what leaders do.  If the middle class is worth fighting for, then, by God, fight.

It’s the same for extension of unemployment benefits. Republicans refuse to extend them for nearly two million Americans. Why isn’t President Obama on television every damned day pointing out what Republicans have done to folks who lost their jobs because of Republican policies?  I don’t get it.

And now Democrats are talking about trading tax cuts for the wealthy for an extension of unemployment benefits.  Are you kidding me?  The Republicans are holding the unemployed—and the economy—hostage and Democrats are willing to pay the ransom?  Huh?

When Republicans were walloped in 2008, they didn’t go running to the Democrats to compromise. Even though voters turned away from them in droves, Republicans doubled-down on the philosophy that brought the nation to its economic knees, hoping against hope that the public’s understanding of the causes of the Great Recession could be muddled by overblown rhetoric against Obama and Pelosi and Reid.

Unfortunately, that strategy worked because of a slow-recovering economy and because too few Democrats were willing to defend Democratic principles in the face of Tea Party resistance. And after what Obama did yesterday, I don’t hold out much hope that Democrats are up to any kind of fight for what is right.

President Obama, desperate to impress anyone who will listen that he is serious about deficit reduction, said he was freezing pay for federal workers, including underpaid people who care for our veterans and pick up trash in our national parks.  Yeah, that’ll show ‘em. Mr. Obama said his pay freeze will save about $2 billion in 2011. That’s about .0005 of the projected 2011 budget. Get that? That’s 5/100 of 1%!

And besides the mere symbolism of it all, the federal pay freeze nonsense was a Republican idea, based on a faulty notion that government workers are overpaid and underworked. If Democrats, who are supposed to be the party of good government, won’t stand up for government workers, including many at the top who could earn more in the private sector, then who will?

If President Obama and the Democrats can’t do better than this, when they still have a majority in both houses of Congress, what will the next two years be like?

Maybe those Democratic state legislator-defectors have a point.

My Favorite Billionaire

This morning on CNBC, Warren Buffett, one of the richest capitalists in the universe, told the somewhat astonished free-market-friendly hosts of Squawk Box that if it weren’t for the intervention of the government during the economic crisis in the fall of 2008, he would be eating Thanksgiving dinner at McDonald’s this year.

Buffett was on the show defending his op-ed piece in the New York Times, in which he thanked “Dear Uncle Sam” for saving not only his own company, Berkshire Hathaway, but “all of corporate America” and “300 million Americans.”  He wrote,

There was no hiding place. A destructive economic force unlike any seen for generations had been unleashed.

Only one counterforce was available, and that was you, Uncle Sam. Yes, you are often clumsy, even inept. But when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction. And when our citizens are losing trust by the hour in institutions they once revered, only you can restore calm.

Hooray, for one rich capitalist who gets it. 

Buffett was also asked about the extension of the Bush tax cuts this morning.  I will quote him at length:

Unless we get more money from the wealthy people, we’re not gonna get our revenues back up to 19% or something like that of GDP.  I think the vast majority of Americans should not pay more taxes—if anything they should pay a little less—and I think people at the top should pay more.

The IRS released the figures for the highest  individual tax returns just a couple of months ago, and the average income was $358 million.  Now, if you take 400 times $358 million, you come up with $1.4 trillion of income for those 400 people.  And their average tax rate was under 17%, the lowest it’s ever been…

If you ask me what should happen with the tax code, it should hit people with huge incomes a lot harder and it should not be hitting people down below harder…

I’m gonna have a lot of capital gains this year…it’ll be in the tens of millions and when I get all through, I will have a tax rate—counting payroll taxes—of about 16 or 17 percent.  And the average for the other people in the office is going to be over 30%.  And that’s dead wrong.

On the tax issue, Buffett is one billionaire who understands what some Democrats are starting to forget.

He also weighed in on the Simpson-Bowles deficit-cutting proposal, particularly the tax-restructuring part of it.  Buffett believes, like everyone, that we will soon have to deal with the debt problem, and he has something of an idea as to what should be the proper amount of government revenue and spending and the ratio between the two, in terms of the GDP:

We’re taking in a little over 15% of GDP and we’re spending a little over 25%.  That gap has to narrow in the foreseeable future to something not greater than 3%… [The Simpson-Bowles plan] is only a sound plan, if it brings revenues up from the present 15 and a fraction percent up to something like 19%.  If you have expenditures of 21 and revenues of 19, that will work fine for this country over time…

There is no magic, you’re gonna have to raise more revenues and you’re gonna have to cut expenses.

As for the future, Buffett is bullish on America, as anyone who has ever listened to him would expect.  He says the economy “is getting better,” and when asked what the government can or could be doing about increasing job growth, he said,

I don’t think the government is nearly as big a factor in that as what I call the regenerative capacity of capitalism…Since the country was started, we’ve probably had 15 recessions, most of the time we didn’t even know what fiscal or monetary policy was—the terms hadn’t been invented—but we came back from those.  We come back from everything.  And we’ll come back from this one.  It won’t be next week or next month.  I mean, the sort of cardiac arrest that the country experienced, you  don’t get out of the hospital in a day or a week or a month…

Asked about the trend toward government policies that embrace austerity, which could harm the recovery, Buffett replied:

This country has faced lots of interesting problems over the past years.  We have gone through civil wars, world wars, Great Depressions…the country will work over time, but that doesn’t mean we get the right answers every day or every week…If they don’t get it right the first time, they’ll get it right the second time…

Let’s hope he’s right, as the fight over what to do next—if anything—begins.

The CNBC appearance, in two parts, can be heard here and here.

Read Democrats’ Lips: Tax Cuts For The Rich

Huffpo reported today:

President Barack Obama’s top adviser suggested to The Huffington Post late Wednesday that the administration is ready to accept an across-the-board, temporary continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers.

In a sadly Rumsfeldian moment, David Axelrod, probably President Obama’s closest adviser, defended the move this way:

We have to deal with the world as we find it,” Axelrod said during an unusually candid and reflective 90-minute interview in his office, steps away from the Oval Office. “The world of what it takes to get this done.”

Such a breathtaking reversal—Obama was only a few weeks ago campaigning on the issue of allowing extensions only of the middle class Bush tax cuts—is not surprising, I suppose. Many in the Democratic Party have misinterpreted the defeat of House Democrats last week: “Voters just want us to work together to get things done,” they seem to think was the message.  So, it’s not all that shocking that some on our side are willing to retreat on this and other issues.

But what is surprising is the willingness to concede defeat even before the beginning of the upcoming debate—especially since Democrats still control both bleeping houses of Congress until next January.  Many of us out here in the non-D.C. parts of the country wonder just what good is it to have a substantial majority in the House and Senate—many of them lame ducks with nothing to lose—if you can’t do something that a large majority of Americans support?

Oh, I understand the filibuster cow paddies left all over the floor of the United States Senate by Republicans, which make it hard for Democrats to take a step without getting poop on their penny loafers, but why not at least force Republicans to actually conduct the filibusters on the Senate floor? 

Why not force them to stand up, hour after hour, day after day, and hinder passage of middle-class tax cuts, just so Republicans can ensure that rich folks have another $100,000 to deposit in their swelling bank accounts?

As for President Obama, here’s what he said less than two months ago at the CNBC town-hall meeting:

…the GOP wants, essentially, to write checks of $100,000 and more, at taxpayer expense, to all the millionaires and billionaires. This is irresponsible,” the president said, “and I won’t do it.”

Obama said, “You can’t give tax cuts to the top two percent and lower the deficit at the same time – not when that tax cut costs $700 billion.”

Read my lips:I won’t do it,” he said.  Hmmm.

Axelrod did try to assure us that the White House is not going to back down on protecting the health insurance reform legislation:

“I’m not going to prejudge what they are going to do,” Axelrod said of Republican opposition to the legislation. “But I will tell you this — we are firm in our commitment, we are willing to work with people to improve this plan. We are not going to stand for those who want to undermine it and destroy it.”

Read my lips:We are firm in our commitment,” he said.

Uh-oh.  Here we go again.

The Democratic Valley Of Dry Bones

And he said unto me, Son of man, can these bones live? And I answered, O Lord God, thou knowest.

—Ezekiel 37:3  

Ezekiel, call your office.  

I’m just going to say it: There aren’t too many Democratic leaders around these days with whom I would want to share a foxhole.  

When you’re besieged by your political enemy; when it doesn’t appear there will ever be a way of escape; when things look bleak for your survival; one might think that if a weapon magically appeared in your foxhole that had a chance of freeing you from the dominance of your enemy, or a weapon that might stop your opponent’s advance, there would be no hesitation in brandishing that weapon, in fighting your way to a possible victory.  

But then we are talking about Democrats.  

By not holding a vote on the expiration of the Bush tax cuts before the upcoming election, by not holding Republicans accountable for their threat to deny middle class Americans a tax break because Republicans insist on giving millionaires and billionaires an average of over $100,000 every year to sock away for a rainy day, Democrats have essentially surrendered, the leadership has caved.  

And that’s why I would fear for my life if I were sharing a foxhole with a lot of them.  

Whether it was Blue Dog Senate Democrats or whether it was weak-kneed moderate to conservative Democrats in the House of Representatives, it doesn’t really matter.  The Democratic leadership in both legislative houses failed.  Their job is to lead, to do what is right.  

If it weren’t for the fact that a lot of innocent and hardworking folks would get hurt, I would wish the entire Democratic leadership go down in flames.  And I would wish the Democrats lose control of both legislative chambers, if the results weren’t slated to be so deleterious for already struggling Americans.  

There just aren’t enough pejoratives for such cowards, for such pusillanimous political pansies.   

After showing considerable courage in pushing for a modest reform of the health insurance system, and after pushing for reform of the financial system, and after rescuing the economy from the brink of disaster, these once-audacious legislators have pulled back on an issue that had a large majority of the people on their side.   

You see, folks can understand that when you are worried about the deficit, when you are concerned about the fiscal health of the nation, you don’t keep letting zillionaires off the hook on taxes, when everyone knows that their tax breaks won’t end up helping the economy.   

I don’t know.  Perhaps Democrats are tired.  Maybe they have carried the load of governing so long—by themselves, without Republican help—that they just want to take a break, rest a while.  It does get old doing all the work, and while you’re doing it the Republicans sit on the sidelines not only doing nothing, but jeering and throwing big ugly rocks at you while you are trying to pull the wrecked economy out of a Republican ditch.  

I understand that. But here we are, a campaign gift delivered right to the door of ailing Democrats, a gift that could lift Democrats everywhere and help them fight back against Republican demagoguery.  And not only will Democrats not accept the gift, they won’t even go to the door.  They’re hiding behind the blinds, hoping it will all just go away, I guess.  

In the mean time, the Republican onslaught will continue.  They will overrun those Democrats cowering in the foxhole, and this time, by co-opting the Tea Party, Republicans will not just take Democrats prisoner, they will slaughter them on the battlefield, leaving nothing but a Democratic carcass behind as the victorious Republicans march toward their goal of undoing all the social progress that has been made over the last 70 years.*  

One would think that prospect would be enough to energize Democrats, to put flesh on their dry bones.  And one would think that an Ezekiel would rise up from somewhere and command the four winds to give them life, to make them “an exceeding great army.”  

But then we are talking about Democrats.  

[Blue Dog illustration found here.]

______________________________  

*In fact, Glenn Beck said today that the Republican Pledge to America wasn’t bold enough in calling for spending levels to go back to pre-TARP 2008.  “How about a return to the ’08 spending levels of 1908?” he asked. Federal spending in 1908 was less than $800 million (almost 50% was for defense).  The federal government spends that much in about two hours today, so at about 2:00 am on January 1 (nevermind the fiscal year), the government would have to shut down, if Beck had his way. Good luck senior citizens! Good luck Pentagon!  Good luck airports! And on and on and on.   

“It Is Time To Tax Me More”

An astounding article appeared in the Los Angeles Times yesterday by Garrett Gruener, founder of Ask.com and a chief executive of Nanomix, as well as a director of Alta Partners, a venture capital firm. I saw him on television today.

Mr. Gruener says,

It is time to tax me more.

Making the point that his investment decisions are governed by the “demand for the good and services my investments produce,” Mr. Gruener claims:

For nearly the last decade, I’ve paid income taxes at the lowest rates of my professional career. Before that, I paid at higher rates. And if you want the simple, honest truth, from my perspective as an entrepreneur, the fluctuation didn’t affect what I did with my money. None of my investments has ever been motivated by the rate at which I would have to pay personal income tax.

None of his investments were motivated by his marginal tax rate, he says.  None. Nada.

But, of course, that can’t be true because day and night on radio and television conservatives tell us otherwise.  A return to Clinton-era tax rates for the wealthy will devastate the economy, most of them say. 

But a real entrepreneur, Mr. Gruener, begs to differ:

As history demonstrates, modest changes in the tax rate for wealthy taxpayers don’t make much of a difference if the goal is to build new companies, drive technological development and stimulate new industries. Almost a decade ago, President George W. Bush and his Republican colleagues in Congress pushed through a massive reduction in marginal tax rates, a reduction that benefitted the wealthy far more than other taxpayers.

We were told the cuts would accelerate business growth and create jobs. Instead, we got nearly a decade of anemic job growth, stagnating wages, declining incomes and high inequality.

The supply-side, trickle-down economic policies of the last decade benefitted people like me, but the wealth didn’t trickle down. So while we did quite well, people who live from paycheck to paycheck didn’t.

He later says:

Now that the Bush tax cuts are about to expire, Republicans are again arguing that taxes should remain low for the wealthy. The idea is that this will spur people like me to put more capital to work and start more ventures, which will create new jobs, power the economy and ultimately produce more tax revenues. It’s a beguiling theory, but it’s one that hasn’t worked before and won’t work now.

Mr. Gruener discusses “balance,” a them on this blog lately:

When inequality gets too far out of balance, as it did over the course of the last decade, the wealthy end up saving too much while members of the middle class can’t afford to spend much unless they borrow excessively. Eventually, the economy stalls for lack of demand, and we see the kind of deflationary spiral we find ourselves in now. I believe it is no coincidence that the two highest peaks in American income inequality came in 1929 and 2008, and that the following years were marked by low economic activity and significant unemployment.

He argues that rather than a tax cut for the well-off, invest the $700 billion in extra revenues in “infrastructure and research, which will help provide “a foundation for future growth.”

After all, he says,

…paying slightly more in personal income taxes won’t change my investment choices at all, and I don’t think a higher tax rate will change the investment decisions of most other high earners.

But what does he know? 

Carnahan Needs To Reconnect With Democrat-Friendly Voters

Now that speaker-to-be-if-voters-get-amnesia-in-November John Boehner has conceded that he will reluctantly abandon his hopes for continuing the hefty Bush tax cuts for his millionaire-billionaire constituents; and now that Coppertone John has also admitted that only three percent—3%—of small business owners would be affected by allowing those tax cuts to expire;  it would be interesting to know how our Democratic candidate for the U.S. Senate, Robin Carnahan, feels today.

She gave away this issue when she supported extending those same tax cuts, and when you are trying to whip a well-funded, well-connected Republican, you can’t afford to give up the one issue you can use to make voters understand that Roy Blunt’s primary—and primal—loyalties lie not with the Keystone Light-buying, $5 pizza-eatin’ folks, but with the Château Margaux-drinking, Ruth’s Chris-dining, citizenry.

As Bob Herbert wrote in the New York Times recently,

The Democrats are in deep, deep trouble because they have not effectively addressed the overwhelming concern of working men and women: an economy that is too weak to provide the jobs they need to support themselves and their families. And that failure is rooted in the Democrats’ continued fascination with the self-serving conservative belief that the way to help ordinary people is to shower money on the rich and wait for the blessings to trickle down to the great unwashed below.

Carnahan certainly cannot change her mind now and support Obama and most Democrats by asserting that a $700 billion gift to the well-heeled is not a panacea for our persistent economic problems.  And certainly most of us who dread six years of Senator Roy Blunt will, come November, cast our lot with Ms. Carnahan.

But by surrendering ground on the Bush tax cuts, Carnahan hasn’t done much to generate the necessary enthusiasm among Democrats her campaign needs, if she is to defeat Roy Blunt.  In this time of Democratic voter lethargy, she needs to get her core supporters excited about getting out the vote, especially in places like Republican-drunk Southwest Missouri, where the congressional choice this year is between a Know Nothing Republican with an R by his name, and an Almost Know Nothing Republican with a D by his name.

And siding with Republicans and their wealthy friends just doesn’t generate much excitement, unless you are one of those fortunate few who are waiting for $130,000 in tax relief again next year and the year after and who knows how long after that.

Let’s hope that Carnahan can reconnect with her natural allies in such a way as to increase Democrat-friendly voter turnout in November.  Because otherwise our only hope is that those voters’ distaste for a lobbyist-loving legislator from Springfield is enough to get them to the polls.

Obama Is Hard On Boehner In Hopes Boehner Will Go Soft In November

On Good Morning America this morning, President Obama did a nice job of explaining what’s at stake in the fall campaign. Essentially, the American people have a choice between continuing to allow Democrats to work to increase the growth-rate of a distressingly slow-growing economy or return to the voodoo economics expressed most recently by John Boner Boehner, who gets all boner-like turgid thinking about his chances of being Speaker next year.

The interview by George Stephanopoulos was done after Obama’s speech yesterday in Cleveland:

STEPHANOPOULOS: So, it seemed like you were out there to make– Congressman Boehner the most famous Republican in America today.

OBAMA: Well, you know Congressman Boehner is saying that Republicans have a good chance of winning the…House.

STEPHANOPOULOS: I talked to him this morning. He seemed pretty confident.

OBAMA: And he thinks he may be Speaker. And I think it’s very important that the American People understand what the Republicans are offering, which is essentially more of the same. I mean, we have seen what their policies have done. And the recession that we’ve gone through and the financial crisis we’ve gone through is a direct culmination of a series of decisions they made over the course of several years in which they were in charge. And we have now spent two very difficult years trying to pull the economy out of the ditch. And I just want the American People to understand exactly what the choice is in November.

Although he was inexplicably reluctant to say he would veto any effort to continue giving rich folks their tax cuts next year, Obama did hold his ground on the philosophy behind allowing the Bush tax cuts for the wealthy to die their natural legislative death.  Stephanopoulos ask him, “I know you’re against any permanent extension, but what about two years?”

OBAMA: But keep in mind that they said back in 2001 and they said back in 2003 that these tax cuts for the rich would stop at 2010. That’s why we’re in the predicament that we’re in now. And when you ask them why not just go ahead and give 97 percent of Americans a tax break, which is what we’re prepared to do tomorrow? They say no. And the reason is they’re holding– all those middle class folks who need tax relief hostage right now in order to provide tax breaks for the top two percent wealthiest Americans, who don’t need a tax break, aren’t asking for a tax break. And you know, if we could afford it, it’d be one thing. But we know that’s gonna cost $700 billion over ten years. And so, that is not a smart thing to do for the economy, given where it’s at right now.

Later the President said:

OBAMA: We’re prepared to give the middle class, who haven’t seen a wage increase, haven’t seen incomes increased, who are most likely to spend any tax cut and recirculate in the economy to help grow the economy. We’re prepared to do that right now. And what they are saying is that we’re going to borrow $700 billion, despite the fact that they say they’re concerned about the deficit, in order to provide a tax break to folks who don’t need it. That’s something we can’t afford…

Now, if Mr. Boehner and the Republicans want to help small businesses right now, which is the rationale that they’ve provided for trying to extend tax cuts for the wealthiest Americans, if they want to help them right now, we’ve got a small jobs bill. Bipartisan bill — written by Democrats and Republicans that provides tax cuts to small businesses. It eliminates capital gains for small businesses. Provides loan assistance to small businesses. And we could vote on that immediately. The reason it’s been held up is because we haven’t seen compromise from the other side… When you look at what the Republicans are offering, it is exactly the same as what landed us in this mess in the first place.

As for the effect on the economy of continuing the tax cut:

OBAMA: …what every economist that I’ve talked to has said is that if you’re gonna spend, say $95 billion, even just for two years for these tax cuts, probably the least efficient way of actually giving the economy a boost is to provide that $95 billion to millionaires and billionaires. I mean, if Warren Buffet gets a tax break, that’s not gonna change his spending patterns. If those families that I were talking to out in, out here in Cleveland or across the country get a tax break, that may mean a new computer for their kid. It may mean that they’re able to make their mortgage payments. It may mean that they can buy a new coat for winter. And that’s where our money should be going.

The President will have to continue this sort of thing until November, if there is any chance of making John Boehner go limp.

Carnahan Triangulates On Bush Tax Cuts

Now that it’s been confirmed that Robin Carnahan, the Democratic candidate to replace Kit Bond in the U.S. Senate, supports extending the Bush tax cuts—including those for the wealthiest Americans—I suppose the onus is on those of us who call ourselves liberals or progressives to determine just how hard we will fight to elect Ms. Carnahan.

Beyond question, she would be far superior to Roy Blunt, who just this morning had to pull down an offensive web video that attempted to exploit Carnahan’s support for New Yorker’s right to choose on the issue of the quasi-mosque near Ground Zero.  Blunt, the ultimate insider who is trying to sell himself as some kind of reformer, would always vote in lockstep with obstructionist Republicans, so there is no doubt that those of us on my side of the political divide have little choice but to continue supporting Carnahan.

Which, of course, is why she thinks she can afford to piss off those of us who are her natural allies. Dick Morris, the repulsive conservative advisor to Bill Clinton, used to call this stuff “triangulation.”  And I suppose there is a certain logic to it here in the politically schizophrenic land of Missouri.

But there is something unseemly about supporting a continuation of tax cuts for wealthy Americans who will not contribute much of it to the economy—since they don’t need it to live on—and at the same time asking working folks for their votes.

As I said, no doubt I and other liberals will vote for Ms. Carnahan in November.  But much of the enthusiasm for her campaign—supplied in large part by people like me—is waning.  Already, the damage is apparent.  On DailyKos today, posted by TomP:

I’ve been pushing Robin Carnahan as a fighting Democrat, but she just lost my support and contributions.  I’ll vote for her in Missouri as better than Blunt, but my pocketbook is closed.  There is a real progressive across the river and I’ll donate to him instead.

It’s sad and sobering that from Scott Eckersley to Robin Carnahan, local liberals have to go to the polls holding their collective noses, just to keep right-wing extremists from really waging a Waterloo-like war against President Obama and his agenda to restore the strength of middle class America.

Here is the web ad posted, and then removed, by the Blunt campaign:

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