The 112th Congress: Debt ceiling edition

[Rover]

Re: The 112th Congress: Debt ceiling edition

I fail to see how this works. It cuts taxes by $1.5T and reduces spending by $3.7T over 10 years. So, really only $2.2T. Except that that reduction in spending is a promise (and as we know, politicians always keep their promises) so it really only cuts $.5T, so it increases the debt by $1T. In 2021 the debt is expected to be "only" 70% of GDP (which it isn't even at yet). Oh, and this doesn't even raise the debt ceiling.

How is this a good idea? What am I missing?

My understanding is that it increases net revenue by approx $1T over the 10 years. I guess we'll have to see an actual bill however before we know the real impact.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

My understanding is that it increases net revenue by approx $1T over the 10 years. I guess we'll have to see an actual bill however before we know the real impact.

That's what all the reporting says, but since it eliminates the AMT it may be overall revenue negative. Norquist's pledge is bizarre because it requires a signee to say no to a deal that raises Tax A by $1 while cutting Tax B by $100. That may have been deliberate cynicism on his part, setting that up as a bargaining chip: "You've forced me into a corner. Alright, I will reluctantly agree to more of what I wanted in the first place."

It will be interesting to see where the supposed increased revenues come from. They say "closing tax loop holes" but that's like "eliminating waste" -- an evergreen rhetorical device that has no real world backing.

I do hope they also have a blue ribbon commission to investigate simplifying the tax code.

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

That's what all the reporting says, but since it eliminates the AMT it may be overall revenue negative.

Does it eliminate the AMT, or does it simply make permanent the ongoing fix so that it's inflation adjusted to prevent the middle class from eventually being hit by it.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

Does it eliminate the AMT, or does it simply make permanent the ongoing fix so that it's inflation adjusted to prevent the middle class from eventually being hit by it.

Good question. From the ABC site we get this:

The senate “Gang of Six” proposal calls for what the senators call a $500 billion down payment on cutting the deficit and moves toward the $3.7 trillion goal. There would be an increase in tax revenues by $1 trillion by closing a variety of special tax breaks and havens, which would amount to a net tax decrease of $1.5 trillion because the Alternative Minimum Tax would be repealed.

followed immediately by this:

The Gang of Six is basing their $ 1 trillion tax revenues increase on the AMT being patched and extending Bush-era tax cuts for people families that make less than $250,000 per year. That could become a sticking point.

 

[ScoobyDoo]

Re: The 112th Congress: Debt ceiling edition

You know, we never would have had this stupid problem if the baby boomers knew how to save.

 

[leswp1]

Re: The 112th Congress: Debt ceiling edition

You know, we never would have had this stupid problem if the baby boomers knew how to save.

Except rememberafter 9/11 Bush told everyone to go out and go shopping. They were just being patriotic.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

You know, we never would have had this stupid problem if the baby boomers knew how to save.

Entitlements without taxes -- the twin engines of default. Note to LBJ and Reagan: ef you both.

 

[ScoobyDoo]

Re: The 112th Congress: Debt ceiling edition

Entitlements without taxes -- the twin engines of default. Note to LBJ and Reagan: ef you both.

Sort of true. My paycheck says that I pay something for Social Security and Medicare/Medicaid. My paycheck says nothing about land wars in Asia, Medicare Prescription "D", or NCLB. Never mind the hidden "job creators" tax.

 

[Almington]

Re: The 112th Congress: Debt ceiling edition

Sort of true. My paycheck says that I pay something for Social Security and Medicare/Medicaid. My paycheck says nothing about land wars in Asia, Medicare Prescription "D", or NCLB. Never mind the hidden "job creators" tax.

Wouldn't land wars in Asia be an entitlement for the defense industry?

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

Wouldn't land wars in Asia be an entitlement for the defense industry?

 

[Handyman]

Re: The 112th Congress: Debt ceiling edition

Extending the Bush Tax Cuts is going to somehow help this situation? If the Dems accept the Gang of Sixes plan here is hoping they all get ****-canned in the next election including Obama. If I wanted GOP ideals to rule the day I would have voted GOP. If these clowns cant summon the stones to actually put forth an idea that may be centrist or dare I say, even liberal then screw em they dont deserve to be in office. Being to the left of the Tea Party is not being part of the Left.

I am sorry, but this "we need some deal to prevent armaggeddon" ideal is dangerous and stupid. A bad deal does not make the situation better and no amount of naivete is going to make me believe that a short term bad deal will lead to a long term good deal. The last 10 years that is all we have seen and heard "just put something on the table we can sign and we can worry about fixing it later" well guess what...IT IS LATER! Time to ante up folks, time to fix this, there is no more pushing it back we are 3 weeks away from default. No more ducking phone calls from creditors it is time to pay the piper. This is not a time to bend over and take it without lube, this is a time to get this crap done.

If the GOP doesnt want to make a deal, then screw em go full force attacking them for it. They are playing chicken, hell Mitch McConnell admitted as much when he said "we will put forth an amendment saying Obama can raise the debt limit so we cant get blamed". Obama should put his plan up for vote, and when it gets defeated Talking Point #1 is "Why are the Republicans going to destroy the world economy?" Put on a full court press, be like the Republicans and spend the next 3 weeks all over the media talking about the plan and how the GOP are playing politics and screwing over everyone. It is so easy a caveman could do it, but the Dems are too spineless and have zero leadership so they will take some half assed deal the GOP put forth and gain zero politically and even less economically.

 

[geezer]

Re: The 112th Congress: Debt ceiling edition

So wait, raising the debt up more higher is bad, because debt is bad, right? I heard something on the news about how Democrats want to make higher debts and they hate America. What's on American Idol?

 

[Rover]

Re: The 112th Congress: Debt ceiling edition

From the WSJ:

House Republicans are finding more than a few flaws with the “Gang of Six” deficit plan, but haven’t rejected it outright.

The latest evidence comes in an analysis by House Budget Committee Republicans produced on Tuesday night. According to the analysis, the Gang of Six plan “appears to include a $2 trillion revenue increase” relative to current tax rules. That’s considerably more than the $1.2 trillion the plan claims to raise in new taxes.

The Gang of Six plan says its tax increase is $1.2 trillion compared to a “plausible” baseline that assumes the Bush tax cuts for the middle class are extended permanently. But that baseline also assumes a revenue increase of $700 billion or so from the expiration of the Bush tax cuts for the wealthy – hence the $2 trillion total that the House Republicans claim the plan produces.

The plan appears to rely heavily on defense cuts for its near-term spending reductions.

The plan also is light on specifics when it comes to reducing costs of entitlements, and does not attempt to scale back the 2010 health-care law, which conservatives argue has increased problems with entitlements.

Advocates of the law say that it put in place long-term reforms that will help reduce health-care spending.

That said, even the House analysis finds many features to like in the plan. It recognizes the need to overhaul the tax code and lower rates to enhance competitiveness and economic efficiency. It has reasonably strong enforcement mechanisms to contain future spending. And it calls for changes to curb medical malpractice excesses, the analysis says.

Budget Committee Chairman Paul Ryan (R., Wis.) said in a statement:“Unfortunately, it [the plan] increases revenues while failing to seriously address exploding federal spending on health care, which is the primary driver of our debt. There are also serious concerns that the proposal’s substance on spending falls far short of what is needed to achieve the savings it claims. Nevertheless, this effort serves as a sign that we can work together on a bipartisan basis to make a serious down payment now to avert the debt-fueled economic crisis before us.”

 

[Rover]

Re: The 112th Congress: Debt ceiling edition

What may aid in the passage of this plan is corporate america leaning on the House GOP to accept the deal as they seem to make out with lower tax rates.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

If the GOP doesnt want to make a deal, then screw em go full force attacking them for it. They are playing chicken, hell Mitch McConnell admitted as much when he said "we will put forth an amendment saying Obama can raise the debt limit so we cant get blamed". Obama should put his plan up for vote, and when it gets defeated Talking Point #1 is "Why are the Republicans going to destroy the world economy?" Put on a full court press, be like the Republicans and spend the next 3 weeks all over the media talking about the plan and how the GOP are playing politics and screwing over everyone. It is so easy a caveman could do it, but the Dems are too spineless and have zero leadership so they will take some half assed deal the GOP put forth and gain zero politically and even less economically.

This is a hostage situation and your family is the hostage. Holding fast in that situation is not "having the stones," it's risking the unthinkable. The guy with the knife is either a criminal or insane, but the first thing to do is get that knife away from your child's throat. Are you really going to stand there and cooly say, "game theory states that I should not give in to your demands"? Because if you're going to do that, you've seen too many Bruce Willis movies and you're a lousy parent.

Get the hostage free. There will be time to get the knife away from the guy later. You might even get lucky and he'll use it on himself.

 

[ScoobyDoo]

Re: The 112th Congress: Debt ceiling edition

Budget Committee Chairman Paul Ryan (R., Wis.) said in a statement:“Unfortunately, it [the plan] increases revenues while failing to seriously address exploding federal spending on health care, which is the primary driver of our debt. There are also serious concerns that the proposal’s substance on spending falls far short of what is needed to achieve the savings it claims. Nevertheless, this effort serves as a sign that we can work together on a bipartisan basis to make a serious down payment now to avert the debt-fueled economic crisis before us.”

Health Care is booming you incompetent (Ryan) moron because the dip**** baby boomers who didn't save a dime are getting old and retiring. Old people cost a lot of health care money.

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

Budget Committee Chairman Paul Ryan (R., Wis.) said in a statement:“Unfortunately, it [the plan] increases revenues while failing to seriously address exploding federal spending on health care, which is the primary driver of our debt. There are also serious concerns that the proposal’s substance on spending falls far short of what is needed to achieve the savings it claims. Nevertheless, this effort serves as a sign that we can work together on a bipartisan basis to make a serious down payment now to avert the debt-fueled economic crisis before us.”

Ah yes, Paul Ryan, whose plan to save the day requires a 2% unemployment rate and 5% GDP gains every year from now to eternity. Oh, and it turns Medicare into Obamacare, but somehow that's ok even though the latter is SOCIALISM***BBQ!!!

How the fark an idiot like him got the position of Budget Chairman...

 

[Rover]

Re: The 112th Congress: Debt ceiling edition

I always thought it was real convenient that Ryan's plan exempted the age group most likely to vote GOP at the expense of everybody else. I'm sure that was pure coincidence though.

I'm not sure what Handy's point was (hmmm...getting a sense of deja vu all over again as Yogi Berra would say), but I don't have a problem with the Gang of Six deal as I understand it today. I'm as liberal as the next guy, but spending does need to come down. Tweaking the calculation to a different index that will grow entitlement benefits more slowly seems reasonable. Means testing Medicare seems reasonable as does medical malpractice reform. A broader tax base isn't a bad idea. Reducing military spending isn't either. Pass this deal for the $4T and then if there's anything left over that the Biden group agreed to that isn't part of this I'd pass that too. If we can push closer to $5T in deficit reductions over the next 10 years now we're getting somewhere.

Beyond all this though, I wonder how The Boner holds on to his speakership if a tax hike passes. I see him getting the boot in a palace coup by Cantor if this proposal goes through. Like it or not but Obama has gambled on breaking the current GOP by forcing tax hikes upon it while they're in the majority in the House, which is unthinkable to the Tea Party crowd. If he succeeds, you're going to have a party at war with itself and its Presidential candidates at war with the top officials in the Republican party (right now Boehner and McConnell). IMHO he came upon this by accident as he never would have forced the issue had the Cantor/Ryan crowd not put the country in this position, but at the end of the day that might not end up mattering much.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

I always thought it was real convenient that Ryan's plan exempted the age group most likely to vote GOP at the expense of everybody else. I'm sure that was pure coincidence though.

I'm not sure what Handy's point was (hmmm...getting a sense of deja vu all over again as Yogi Berra would say), but I don't have a problem with the Gang of Six deal as I understand it today. I'm as liberal as the next guy, but spending does need to come down. Tweaking the calculation to a different index that will grow entitlement benefits more slowly seems reasonable. Means testing Medicare seems reasonable as does medical malpractice reform. A broader tax base isn't a bad idea. Reducing military spending isn't either. Pass this deal for the $4T and then if there's anything left over that the Biden group agreed to that isn't part of this I'd pass that too. If we can push closer to $5T in deficit reductions over the next 10 years now we're getting somewhere.

Beyond all this though, I wonder how The Boner holds on to his speakership if a tax hike passes. I see him getting the boot in a palace coup by Cantor if this proposal goes through. Like it or not but Obama has gambled on breaking the current GOP by forcing tax hikes upon it while they're in the majority in the House, which is unthinkable to the Tea Party crowd. If he succeeds, you're going to have a party at war with itself and its Presidential candidates at war with the top officials in the Republican party (right now Boehner and McConnell). IMHO he came upon this by accident as he never would have forced the issue had the Cantor/Ryan crowd not put the country in this position, but at the end of the day that might not end up mattering much.

The rest of the GOP is also being Machiavellian here, using Obama to thwart the Tea Party. Then there will be months of hand-wringing on the campaign trail about "tax and spend liberals." The Dems should run a balls-to-the-wall "take back the House" campaign pointing out that the House GOP are arsonists who can't be trusted, and pound home the message that they were too crazy even for the Senate GOP. The Repub presidential candidates will posture all over the place since they didn't have to make any decisions and have the freedom to Monday morning QB the whole fiasco. Fun stuff for political junkies, anyway.

Kudos to the Gang of Six Republicans for completely cutting the legs out from under "Cut, Cap, and Preen." They didn't make any friends with the nutbars with that move.

There's a "leadership guidance" memo circulating among Congressional Republicans that they can't be seen to be agreeing with anything relating to Obama (this is the price you pay for frothing about him being the literal anti-Christ) so it's by no means a done deal. They could always back out, since Obama has already signaled he's willing to swallow McConnell's poison pill and let the GOP off the hook completely. Such is life when you're the adult.

 

[Rover]

Re: The 112th Congress: Debt ceiling edition

Kep, the Dem campaign for the House is already written, and its called the "Ryan Plan". Never in a hundred years should all of them have voted for turning Medicare into a voucher program. The average voter isn't going to care about the nuances of that plan, nor do they have the attention span to grasp abstract concepts like a country's debt limit. For once in their lives, they can boil their campaign down to one simple slogan: The GOP tried to screw seniors. All 60+ Republicans running in Obama won districts are going to have to answer for that as well as GOP nominee Michelle Bachmann!!!