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As you've no doubt heard, in addition to the agreed upon $917 billion of spending cuts over 10 years, the debt deal creates a bipartisan committee that will recommend an additional $1.5 trillion in spending cuts in November. Can the committee recommend revenue increases as part of its deficit reduction plan?
According to Boehner slide presentation to Republicans, no:
<< Requires baseline to be current law, effectively making it impossible for Joint Committee to increase taxes. >> [1]
According to Obama's fact sheet, yes:
<< To Meet This Target, the Committee Will Consider Responsible Entitlement and Tax Reform. This means putting all the priorities of both parties on the table - including both entitlement reform and revenue-raising tax reform. >> [2]
I do not understand Boehner's point about the baseline, and I cannot find any article that explain it. If you understand it, or if you see an article that explains it, please share.
- - - - -
[1] http://thecaucus.blogs.nytimes.com/2011/07/31/boehner-outlines-debt-agreement/
[2] http://www.whitehouse.gov/fact-sheet-victory-bipartisan-compromise-economy-american-people
After my last post, I found an article in The Hill that offers a brief explanation:
<< The Congressional Budget Office's "current law baseline" assumes that the Bush-era tax rates expire and that the Alternative Minimum Tax is not patched, resulting in $3.5 trillion in extra revenue. A GOP aide explained that in using this baseline, the commission would have to raise taxes by more than $3.5 trillion in order for the extra amount to even count as "deficit reduction."
<< "Since that is essentially impossible, the Joint Committee will not produce a bill that increases taxes or likely even addresses taxes," the aide explained. >>
http://thehill.com/homenews/house/174609-in-sales-pitch-boehner-assures-gop-deal-is-all-spending-cuts
That sort of makes sense. But it sets up (postpones) a big fight for December 31, 2012, when the Bush tax cuts automatically expire.
<< The Congressional Budget Office's "current law baseline" assumes that the Bush-era tax rates expire and that the Alternative Minimum Tax is not patched, resulting in $3.5 trillion in extra revenue. A GOP aide explained that in using this baseline, the commission would have to raise taxes by more than $3.5 trillion in order for the extra amount to even count as "deficit reduction."
<< "Since that is essentially impossible, the Joint Committee will not produce a bill that increases taxes or likely even addresses taxes," the aide explained. >>
http://thehill.com/homenews/house/174609-in-sales-pitch-boehner-assures-gop-deal-is-all-spending-cuts
That sort of makes sense. But it sets up (postpones) a big fight for December 31, 2012, when the Bush tax cuts automatically expire.
>Requires baseline to be current law, effectively making it impossible for Joint Committee to increase taxes.
I'm not sure what he's saying is the entirety of the situation though. Or, at least, it may depend on what your definition of "increase taxes" is. While perhaps they can't increase the actual rate, since that would seem to overlap with the expiring Bush cuts, they probably can include is other revisions to the tax code that would effectively increase taxes. Such as removing loopholes and excessive deductions and tax subsidies. Which is fine with me, since we really don't need to raise the actual rates any more than letting the Bush taxes expire. The rest is all in the loopholes and deductions. (Well it'd also be nice to add in some extra brackets at the top, 1M and 10M, but I have no illusions about that happening... though it seems like it could count in this context, as long as the rates are greater than they would be once the Bush cuts expire.)
My big problem with this deal though is that there's not enough to force Republican action for the 2nd half of the increase. It basically gives them too much bargaining power when it comes to that debate (in Nov/Dec), so that most likely nothing will get done, and we'll get big across-the-board cuts, and still no tax-code fixes. The trigger should include at least some revenue (even if it's just closing loopholes).
>But it sets up (postpones) a big fight for December 31, 2012, when the Bush tax cuts automatically expire.
Yeah, this should be fun . . . But I think this fight was always going to come after the elections.
- Greminty
I'm not sure what he's saying is the entirety of the situation though. Or, at least, it may depend on what your definition of "increase taxes" is. While perhaps they can't increase the actual rate, since that would seem to overlap with the expiring Bush cuts, they probably can include is other revisions to the tax code that would effectively increase taxes. Such as removing loopholes and excessive deductions and tax subsidies. Which is fine with me, since we really don't need to raise the actual rates any more than letting the Bush taxes expire. The rest is all in the loopholes and deductions. (Well it'd also be nice to add in some extra brackets at the top, 1M and 10M, but I have no illusions about that happening... though it seems like it could count in this context, as long as the rates are greater than they would be once the Bush cuts expire.)
My big problem with this deal though is that there's not enough to force Republican action for the 2nd half of the increase. It basically gives them too much bargaining power when it comes to that debate (in Nov/Dec), so that most likely nothing will get done, and we'll get big across-the-board cuts, and still no tax-code fixes. The trigger should include at least some revenue (even if it's just closing loopholes).
>But it sets up (postpones) a big fight for December 31, 2012, when the Bush tax cuts automatically expire.
Yeah, this should be fun . . . But I think this fight was always going to come after the elections.
- Greminty
After thinking about a while, I think I understand it now.
Bush tax cuts: There is little reason for the bipartisan committee to repeal any portion of the Bush tax cuts, because those tax cuts automatically expire at the end of 2012 and the additional revenue from their expiration is already factored into the deficit projections. The committee could repeal all or part of the Bush tax cuts for the 2012 tax year prior to the automatic expiration date of December 31, 2012, and the additional revenue from the early expiration would be counted as deficit reduction, but that seems politically unlikely.
Other taxes: If the bipartisan committee reduces or eliminates other deductions that are not part of the Bush tax cuts, or if the committee increases other taxes, then the additional revenue from eliminating those deductions or increasing those other taxes will be considered a reduction of the deficit.
So the way Boehner is selling the compromise to his party is not totally honest.
If the deficit is still an important political issue in 2012, then I'd say it will be nearly impossible to extend most of the Bush tax cuts past 2012.
Bush tax cuts: There is little reason for the bipartisan committee to repeal any portion of the Bush tax cuts, because those tax cuts automatically expire at the end of 2012 and the additional revenue from their expiration is already factored into the deficit projections. The committee could repeal all or part of the Bush tax cuts for the 2012 tax year prior to the automatic expiration date of December 31, 2012, and the additional revenue from the early expiration would be counted as deficit reduction, but that seems politically unlikely.
Other taxes: If the bipartisan committee reduces or eliminates other deductions that are not part of the Bush tax cuts, or if the committee increases other taxes, then the additional revenue from eliminating those deductions or increasing those other taxes will be considered a reduction of the deficit.
So the way Boehner is selling the compromise to his party is not totally honest.
If the deficit is still an important political issue in 2012, then I'd say it will be nearly impossible to extend most of the Bush tax cuts past 2012.
<< While perhaps they can't increase the actual rate, since that would seem to overlap with the expiring Bush cuts, they probably can include is other revisions to the tax code that would effectively increase taxes. Such as removing loopholes and excessive deductions and tax subsidies. >>
Exactly. You figured it out before I did.
Exactly. You figured it out before I did.
>If the deficit is still an important political issue in 2012, then I'd say it will be nearly impossible to extend most of the Bush tax cuts past 2012.
The optimist in me agrees. However, that's assuming the Dem's have any ability to exploit that the way Repub's do. They don't. Republicans will argue economy, and Dem's will not be able to make their case effectively, and very well may capitulate.
- Greminty
The optimist in me agrees. However, that's assuming the Dem's have any ability to exploit that the way Repub's do. They don't. Republicans will argue economy, and Dem's will not be able to make their case effectively, and very well may capitulate.
- Greminty
Here's a decent explanation about how the deal handles taxes:
http://tpmdc.talkingpointsmemo.com/2011/08/the-four-big-problems-with-and-four-silver-linings-around-the-debt-limit-deal.php
>This plan contains zero guarantees that taxes will be raised -- more on that below. But it's unexpectedly compatible with the White House pledge to let at least some of the Bush tax cuts expire, particularly those benefitting the most wealthy. Here's why: when the new fiscal committee convenes, it will have free reign to look at both entitlement cuts and tax increases. The problem with a lot of tax increases is that they're scored by the Congressional budget office against "current law," which assumes the expiration of all the Bush tax cuts. So if the committee tried to end the tax cuts for the top earners, but make the rest of them permanent, it would score as a big tax cut and thus a budget buster -- not something a deficit reducing committee will want to touch. But that means the committee will have to look at other revenue raising options -- loopholes and expenditures that have nothing to do with the Bush tax cuts, say, or a new millionaire's tax bracket. But that also means the Bush tax cuts will survive this process in a way that almost guarantees they'll be set to expire at the end of 2012. That gives Democrats a lot of leverage if they want to pick a fight over those cuts with Republicans. History suggests they'll chicken out. But perhaps they won't.
- Greminty
http://tpmdc.talkingpointsmemo.com/2011/08/the-four-big-problems-with-and-four-silver-linings-around-the-debt-limit-deal.php
>This plan contains zero guarantees that taxes will be raised -- more on that below. But it's unexpectedly compatible with the White House pledge to let at least some of the Bush tax cuts expire, particularly those benefitting the most wealthy. Here's why: when the new fiscal committee convenes, it will have free reign to look at both entitlement cuts and tax increases. The problem with a lot of tax increases is that they're scored by the Congressional budget office against "current law," which assumes the expiration of all the Bush tax cuts. So if the committee tried to end the tax cuts for the top earners, but make the rest of them permanent, it would score as a big tax cut and thus a budget buster -- not something a deficit reducing committee will want to touch. But that means the committee will have to look at other revenue raising options -- loopholes and expenditures that have nothing to do with the Bush tax cuts, say, or a new millionaire's tax bracket. But that also means the Bush tax cuts will survive this process in a way that almost guarantees they'll be set to expire at the end of 2012. That gives Democrats a lot of leverage if they want to pick a fight over those cuts with Republicans. History suggests they'll chicken out. But perhaps they won't.
- Greminty
There's a tiff between Gene Sperling (White House) and Paul Ryan (Republicans) about which baseline the committee will be required to use.
Sperling says the legislation does not specify a particular baseline, and the committee can choose any baseline it wants.
Ryan says the legislation requires the committee to use current law as a baseline, and current law assumes that the Bush tax cuts expire after 2012.
Although much of what Sperling says is true, I think Ryan is correct on the narrow issue of the baseline.
Sperling's argument:
http://www.whitehouse.gov/blog/2011/08/01/baselines-and-balance
Ryan's response:
http://www.speaker.gov/Blog/?postid=254854
Sperling says the legislation does not specify a particular baseline, and the committee can choose any baseline it wants.
Ryan says the legislation requires the committee to use current law as a baseline, and current law assumes that the Bush tax cuts expire after 2012.
Although much of what Sperling says is true, I think Ryan is correct on the narrow issue of the baseline.
Sperling's argument:
http://www.whitehouse.gov/blog/2011/08/01/baselines-and-balance
Ryan's response:
http://www.speaker.gov/Blog/?postid=254854
Am I oversimplifying?
If the Bush tax cuts were allowed to expire, and I don't think that expiration could be blocked if the Democrats wanted it...
Then even the Norquist oath would allow Republicans to vote for closing loopholes if the revenue additional revenue garnered there was balanced by a reduction in tax rates.
As a Democrat, I would like to see that reduction done selectively, with the rate cuts going to the lower income levels.
But I don't think even the most ardent Republican would object (if oath-breaking was not an issue) to cutting out loopholes to give a tax break to the people who spend all their paychecks.
Bairyn
If the Bush tax cuts were allowed to expire, and I don't think that expiration could be blocked if the Democrats wanted it...
Then even the Norquist oath would allow Republicans to vote for closing loopholes if the revenue additional revenue garnered there was balanced by a reduction in tax rates.
As a Democrat, I would like to see that reduction done selectively, with the rate cuts going to the lower income levels.
But I don't think even the most ardent Republican would object (if oath-breaking was not an issue) to cutting out loopholes to give a tax break to the people who spend all their paychecks.
Bairyn
Norquist takes the position that allowing the Bush tax cuts to expire would be a violation of the no taxes pledge signed by many members of Congress.
You can read Norquist's statement here: http://atr.org/atr-statement-washington-post-editorial-a6353
I haven't heard any accusations from Norquist that Republicans violated their pledge by allowing the payroll tax holiday to expire at the end of this year. But that only affects the little people. So why would Republicans give it a second thought?
You can read Norquist's statement here: http://atr.org/atr-statement-washington-post-editorial-a6353
I haven't heard any accusations from Norquist that Republicans violated their pledge by allowing the payroll tax holiday to expire at the end of this year. But that only affects the little people. So why would Republicans give it a second thought?
I was thinking that even if everyone who took the Norquist pledge voted for a bill to extend the tax cuts, it still couldn't pass the Senate if the Democrats voted it down. If it did by some chance pass the Senate, it could be vetoed.
With the Bush tax cuts gone, the Norquist oathtakers could vote with a clear conscience to close loopholes, if the increased taxes were balanced by a reduction in tax rates.
Of course, that would be the end of 2012. And things could change.
Bairyn
With the Bush tax cuts gone, the Norquist oathtakers could vote with a clear conscience to close loopholes, if the increased taxes were balanced by a reduction in tax rates.
Of course, that would be the end of 2012. And things could change.
Bairyn
All I can say is that the automatic expiration of the Bush tax cuts are the best thing the Dem's have going for them at this point. If they blow that, I give up.
I wonder what Norquist would say when offered the choice between all Bush cuts expiring, and just the ones on those making over 250k. If he's being genuine about his stance, he should clearly opt for the more limited tax increase, but I somehow doubt he would.
- Greminty
I wonder what Norquist would say when offered the choice between all Bush cuts expiring, and just the ones on those making over 250k. If he's being genuine about his stance, he should clearly opt for the more limited tax increase, but I somehow doubt he would.
- Greminty
<< I was thinking that even if everyone who took the Norquist pledge voted for a bill to extend the tax cuts, it still couldn't pass the Senate if the Democrats voted it down. If it did by some chance pass the Senate, it could be vetoed. >>
There are lots of other programs Republicans can hold hostage for ransom[1] before the Bush tax cuts expire.[2] To avoid elimination of Medicare, federal student aid or complete government shut down, Obama may be forced to extend some or all of the Bush tax cuts. And Republicans do not believe tax cuts need to be paid for,[3] unless it is a tax cut (such as the payroll tax holiday) that primarily benefits the middle class or poor taxpayers.
- - - - -
[1] http://www.washingtonmonthly.com/political-animal/2011_08/mitch_mcconnell_hostage_taker031287.php (Mitch McConnell's words, not mine)
[2] http://capitalgainsandgames.com/blog/stan-collender/2336/expect-budget-hand-hand-combat-over-next-18-months
Excerpt from the above linked article:
<< Fiscal 2011 ends Sept. 30 and, given the current state of the fiscal 2012 appropriations debate, that almost certainly means a government shutdown will be threatened over the funding level for a continuing resolution.
<< Yes, the debt ceiling deal includes spending caps that, in theory, should make a CR easier to enact. But, especially in the House, a cap will be taken by some as just an upper limit rather than an agreed-upon amount that doesn't require any further changes. As a result, the CR debate will be neither quick nor simple, with tea partyers pushing for spending reductions for fiscal 2012 beyond those in the deal.
<< What could make matters worse is that the CR might not -- or probably won't -- be for a full year. Less than 24 hours after the debt ceiling agreement was announced, the GOP leadership apparently was using the prospect of a series of short-term continuing resolutions with additional spending cuts on each as one of the inducements to convince tea partyers to vote for the debt ceiling deal. >>
[3] http://www.huffingtonpost.com/lloyd-doggett/gops-proposed-cut-go-rule_b_804354.html
There are lots of other programs Republicans can hold hostage for ransom[1] before the Bush tax cuts expire.[2] To avoid elimination of Medicare, federal student aid or complete government shut down, Obama may be forced to extend some or all of the Bush tax cuts. And Republicans do not believe tax cuts need to be paid for,[3] unless it is a tax cut (such as the payroll tax holiday) that primarily benefits the middle class or poor taxpayers.
- - - - -
[1] http://www.washingtonmonthly.com/political-animal/2011_08/mitch_mcconnell_hostage_taker031287.php (Mitch McConnell's words, not mine)
[2] http://capitalgainsandgames.com/blog/stan-collender/2336/expect-budget-hand-hand-combat-over-next-18-months
Excerpt from the above linked article:
<< Fiscal 2011 ends Sept. 30 and, given the current state of the fiscal 2012 appropriations debate, that almost certainly means a government shutdown will be threatened over the funding level for a continuing resolution.
<< Yes, the debt ceiling deal includes spending caps that, in theory, should make a CR easier to enact. But, especially in the House, a cap will be taken by some as just an upper limit rather than an agreed-upon amount that doesn't require any further changes. As a result, the CR debate will be neither quick nor simple, with tea partyers pushing for spending reductions for fiscal 2012 beyond those in the deal.
<< What could make matters worse is that the CR might not -- or probably won't -- be for a full year. Less than 24 hours after the debt ceiling agreement was announced, the GOP leadership apparently was using the prospect of a series of short-term continuing resolutions with additional spending cuts on each as one of the inducements to convince tea partyers to vote for the debt ceiling deal. >>
[3] http://www.huffingtonpost.com/lloyd-doggett/gops-proposed-cut-go-rule_b_804354.html
The market decline yesterday may have been a reaction to the Republican choices to be on the super committee. It looks like Republicans want the committee to fail.
Think Progress has background on them here:
http://thinkprogress.org/economy/2011/08/10/293258/gop-super-committe-picks/
They're all white men, of course. I never understood why the GOP refuses to put women and people of color in leadership positions.
Think Progress has background on them here:
http://thinkprogress.org/economy/2011/08/10/293258/gop-super-committe-picks/
They're all white men, of course. I never understood why the GOP refuses to put women and people of color in leadership positions.
The below link collects and links to the results of 23 different polls showing that a clear majority of Americans want tax increases to be part of any deficit reduction plan.
http://capitalgainsandgames.com/blog/bruce-bartlett/2341/23-polls-say-people-support-higher-taxes-reduce-deficit
The results range from 76% support for increased taxes in a Gallup poll to 56% support in a Rasmussen poll.
It's another good link to save for future use.
http://capitalgainsandgames.com/blog/bruce-bartlett/2341/23-polls-say-people-support-higher-taxes-reduce-deficit
The results range from 76% support for increased taxes in a Gallup poll to 56% support in a Rasmussen poll.
It's another good link to save for future use.
<< They're all white men, of course. I never understood why the GOP refuses to put women and people of color in leadership positions. >>
I've never read where women and people of color are better for the economy. I personally don't know the qualifications of everyone in Congress, but were I there, you can be damned sure I wouldn't include a woman or person of color simply for the sake of sex or race. Only the 6 best qualified people would go on the committee if I could help it.
Josh
I've never read where women and people of color are better for the economy. I personally don't know the qualifications of everyone in Congress, but were I there, you can be damned sure I wouldn't include a woman or person of color simply for the sake of sex or race. Only the 6 best qualified people would go on the committee if I could help it.
Josh
On the polls for tax increases. You can also find polls over the last few months that say that the majority of voters do not want tax increases. Also, 5 of your polls have come after Congress and the President completely borked a plan for our debt, and Americans tend to panic when things even have the appearance of being bad.
I wouldn't trust half of the people who participated in any of those polls to have been thinking with their heads, and I'm probably being overly optimistic.
Josh
I wouldn't trust half of the people who participated in any of those polls to have been thinking with their heads, and I'm probably being overly optimistic.
Josh
>Only the 6 best qualified people would go on the committee if I could help it.
<< I think the point is that when the Republican party seemingly restricts leadership roles to white men, it's likely not choosing the most qualified people. - Greminty >>
I got the point.
1) I like to provide a counterpoint to the propaganda of Kardios. He presents EVERYTHING in a very pro-democrat light.
2) There was nothing in what Kardios said to show that the 6 chosen were NOT the best choices for the job.
I'm very open to the idea that the Republican party put those 6 up for other reasons, but I want more than just the word of someone who is known for being very anti-republican and links to sites that are just as biased. ;)
Josh
<< I think the point is that when the Republican party seemingly restricts leadership roles to white men, it's likely not choosing the most qualified people. - Greminty >>
I got the point.
1) I like to provide a counterpoint to the propaganda of Kardios. He presents EVERYTHING in a very pro-democrat light.
2) There was nothing in what Kardios said to show that the 6 chosen were NOT the best choices for the job.
I'm very open to the idea that the Republican party put those 6 up for other reasons, but I want more than just the word of someone who is known for being very anti-republican and links to sites that are just as biased. ;)
Josh
<<That's an awfully specific number. Any reason?>>
I think it's a nice looking number. Not a slutty number and not a too conservative number. Just right. A goldilocks number.
In all honesty, I think I came up with that number as a ridiculous answer to something in high school. It's just stuck with me.
I think it's a nice looking number. Not a slutty number and not a too conservative number. Just right. A goldilocks number.
In all honesty, I think I came up with that number as a ridiculous answer to something in high school. It's just stuck with me.
<< I like to provide a counterpoint to the propaganda of Kardios. He presents EVERYTHING in a very pro-democrat light. >>
Yes, I am biased against Republicans. Facts are also biased against Republicans: Decreasing taxes does not increase revenue. The world is getting warmer. Corporations are not people. Species evolve. Education is not bad. The U.S. is not a theocracy.
Yes, I am biased against Republicans. Facts are also biased against Republicans: Decreasing taxes does not increase revenue. The world is getting warmer. Corporations are not people. Species evolve. Education is not bad. The U.S. is not a theocracy.
>Yes, I am biased against Republicans. Facts are also biased against Republicans: Decreasing taxes does not increase revenue. The world is getting warmer. Corporations are not people. Species evolve. Education is not bad. The U.S. is not a theocracy. -Karidos
I laughed. It's all true.
Mandy
I laughed. It's all true.
Mandy
<< And Republicans do not believe tax cuts need to be paid for,[3] unless it is a tax cut (such as the payroll tax holiday) that primarily benefits the middle class or poor taxpayers. >> --Me
There's a good article at the following link about the double standard that Republicans apply when discussing the expirations of (a) the payroll tax cut, and (b) the Bush tax cuts:
http://tinyurl.com/3rgqvdf (mauledagain.blogspot.com)
I don't understand why it's taking the press so long to catch on to the issue.
I had to use Tinyurl because the original link contains a hash symbol, and the forum does not properly process hash symbols.
There's a good article at the following link about the double standard that Republicans apply when discussing the expirations of (a) the payroll tax cut, and (b) the Bush tax cuts:
http://tinyurl.com/3rgqvdf (mauledagain.blogspot.com)
I don't understand why it's taking the press so long to catch on to the issue.
I had to use Tinyurl because the original link contains a hash symbol, and the forum does not properly process hash symbols.
