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Posts Tagged ‘Bush tax cuts’

Memo to White House: Time to Use the Constitutional Option

Friday, July 29th, 2011

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It’s Time to End This Hostage Crisis

This has gone far enough. Whereas Speaker John Boehner has failed to persuade his own party in the House to support his proposed bill to lift the debt ceiling short-term—which the Senate and the President would have rejected anyway—and whereas there is no Senate bill that the House would pass, and whereas the U.S. is projected to begin defaulting on debt obligations on August 2, the time has come for President Obama to exercise the constitutional (or 14th Amendment) option to raise the debt ceiling by executive order. It is time to end this hostage crisis. Section 4 of Article XIV (14th amendment) of the Constitution reads in part:

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

The 14th Amendment was passed in the wake of the Civil War to settle matters of wartime debt, while the debt ceiling itself dates back to 1917 when the U.S. was entering World War I. (See “Smash the Ceiling” by James Surowiecki in The New Yorker.)

Former President Clinton, who left office with a projected budget surplus and therefore has debt reduction credibility, has publicly said at least twice that the constitutional option should be used if nothing else works to avert default on federal debt obligations. The Democratic members of the House of Representatives, including minority leaders Steny Hoyer and James Clyburn, have urged the President to use this option to protect the nation’s economic stability and pledged that their members will stand behind him if he does.

Jack M. Balkin, a constitutional law professor at Yale University (and blogger at Balkinization) who has been cautious about the use of the 14th Amendment option, was quoted by the New York Times as saying, “You’re not supposed to hold the validity of the public debt hostage to achieve political ends.” He adds, “Section 4 is a fail-safe that only comes into operation when everything else is exhausted.” President Obama himself taught constitutional law at the University of Chicago, so he is familiar with the arguments for and against. Mostly his administration has stressed the arguments against, which in the opinion of many only weakened his bargaining position against the all-or-nothing Tea Party faction of the House Republicans.

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2001 Bush Tax Cuts: Where the Deficit Began

Wednesday, July 20th, 2011

Those intrepid researchers at Think Progress have dug up a headline from Aug. 1, 2001—almost exactly 10 years ago—that shows the long-bleeding fiscal damage done by the Bush tax cuts. Only six months into his first term, after George W. Bush inherited a budget surplus from Democratic president Bill Clinton and Congress passed a $1.35 trillion, 10-year tax cut, the AP reported that “the Treasury Department was tapping $51 billion of credit in order to pay for the budgetary cost of the first round of Bush tax cuts’ rebate checks.”

This headline might have been useful in 2010, when extension of the Bush tax cuts was being avoided by timid congressional Democrats before the midterm elections, and then, afterward, steamrolled to passage by Tea Party–drunken Republicans over a passive Conciliator-in-Chief to the tune of “Kumbaya for Billionaires.” Think Progress observes, “The opponents of the tax cut turned out to be right. The 2001 and 2003 tax cuts combined have blown a $2.5 trillion hole in America’s budget and created deficits stretching on for years.”

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  • To see how well the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 performed in creating jobs and distributing tax relief among income levels, check out this report from the Center on Budget and Policy Priorities.
Republican-led White House, Congress Built This Deficit

How was it looking four years later? Projections released by the Congressional Budget Office in January 2005 showed that “changes in law” enacted since January 2001 had increased the deficit by $539 billion. The Center on Budget and Policy Priorities found that “in the absence of such legislation, the nation would have a surplus this year” (our emphasis). Tax cuts enacted in 2001 and 2003 accounted for nearly half of the revenue shortfall (see chart below). Although the deficit was blamed on “runaway domestic spending” or growth in the costs of entitlement programs (sound familiar?), in fact by January 2005 tax cuts and defense + homeland security expenditures accounted for 85% of the deficit.

 


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“They Need to Do Their Job.”

Friday, July 1st, 2011

Obama Bitch-Slaps G.O.P. Deficit Hardliners, Hell-Bent Extremists

“Before we ask our seniors to pay more for health care, before we cut our children’s education, before we sacrifice our commitment to the research and innovation that will help create more jobs in the economy, I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys. I don’t think that’s real radical. I think the majority of Americans agree with that.”

“I’ve said to some of the Republican leaders, you go talk to your constituents, the Republican constituents, and ask them are they willing to compromise their kids’ safety so that some corporate jet owner continues to get a tax break. And I’m pretty sure what the answer would be.”

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Wednesday’s presidential press conference—the first since March—showed a combative President Obama chopping at the Republicans for a lack of fiscal seriousness and a slack work ethic. “They need to do their job” is right. And he’s doing his: defending social contract programs like Medicare and Social Security against the ideology-driven slasher nightmare of a “fiscally conservative” party that enabled a doubling of the deficit under George W. Bush (remember Dick Cheney’s “Reagan proved deficits don’t matter”?). From 2001 to 2009 the current G.O.P. leaders voted 19 times to increase the debt limit by $4 trillion. When Bush took office after Bill Clinton the budget was in the black and the Congressional Budget Office projected a $5.6 trillion surplus over 10 years. Then came the cuts.

Anyway, this Barack Obama is the man we campaigned for long ago, the fighter we feared had evaporated forever in a sweet dream of (illusory) bipartisanship. We just wish Barack had bared his knuckles like this last year when the “fiscal conservatives” were pushing like hell for the Bush tax cut extension, and had fought hard before that in the unnecessarily protracted struggle for the health care reform act, and before that for the helpful but insufficient Stimulus (ARRA) of 2009.

(Obama must have been doing something right to prompt Time writer and MSNBC political analyst Mark Halperin to remark Thursday on Morning Joe, with some prompting from Joe Scarborough, “I think he was kind of a dick yesterday.”)

Last year when Obama and congressional Democrats allowed themselves—and thus the nation—to be extorted into an extension of the Bush Tax Cuts for Millionaires, the president seemed not to grasp the terrible truth that the job-killing extremists controlling the G.O.P. are fully willing to drive the U.S. economy into severe crisis in order to inflict maximum damage on this president and his party.

The President now shows signs of understanding that the Republicans really are willing to destroy the United States’s credit and economic functionality in order to inflict pain severe enough to intensify voters’ rejection of the president and his party next November.

The same so-called conservatives who cracked the whip for extension of the Bush tax cuts for millionaires and billionaires—which will add some $700 billion more to the deficit over the next 10 years—now scream that the deficit is strangling America and killing jobs. (The chart at left illustrates the Bush tax cuts’ contribution to the deficit.) They nearly forced a government shut-down in April (how disappointed they were that the crisis was averted by Democrats’ concessions) and now are forcing another crisis. Many of them actually want a shutdown, as is happening at this moment in the stalemated state of Minnesota. (Minnesota-based G.O.P. candidates Pawlenty and Bachmann approve.)

If the U.S. were to crash through the debt ceiling after August 2, would John Boehner and Mitch McConnell’s publicly funded security detail be laid off?

Paul Krugman writes in today’s New York Times (“To the Limit”) that a failure by Congress to raise the debt ceiling is not at all unthinkable:

Failure to raise the debt limit—which would, among other things, disrupt payments on existing debt—could convince investors that the United States is no longer a serious, responsible country, with nasty consequences. Furthermore, nobody knows what a U.S. default would do to the world financial system, which is built on the presumption that U.S. government debt is the ultimate safe asset.

But wait, it gets worse:

Failure to raise the debt limit would also force the U.S. government to make drastic, immediate spending cuts, on a scale that would dwarf the austerity currently being imposed on Greece. . . . slashing spending at a time when the economy is deeply depressed would destroy hundreds of thousands and quite possibly millions of jobs.

Krugman adds, ominously:

G.O.P. leaders don’t actually care about the level of debt. Instead, they’re using the threat of a debt crisis to impose an ideological agenda. . . . what’s really going on is extortion pure and simple. As Mike Konczal of the Roosevelt Institute puts it, the G.O.P. has, in effect, come around with baseball bats and declared, “Nice economy you have here. A real shame if something happened to it.” . . . [Republicans] believe that they have the upper hand, because the public will blame the president for the economic crisis they’re threatening to create. In fact, it’s hard to avoid the suspicion that G.O.P. leaders actually want the economy to perform badly.”

Senator Chuck Schumer (D-NY)—a careful politician who is not prone to exaggeration—made the same point this week when he said Republicans’ “slash-and-burn approach” may be part of a plan “to slow down the recovery for political gain in 2012.” Schumer cited Senate Minority Leader Mitch McConnell’s surprisingly candid remark to a reporter before the 2010 midterm elections—“The single most important thing we want to achieve is for President Obama to be a one-term president.” The senior New York senator asserted, “Republicans aren’t just opposing the president any more, they are opposing the economic recovery itself . . .”

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Yes We Can Pass Good Legislation

Thursday, December 23rd, 2010

Our last post was illustrated with a big YES and this can do no less.

Congratulations to the 111th Congress—especially Senate Majority Leader Harry Reid (with emphasis on “Leader”) and the suddenly productive Senate in the last days of this so-called lame duck session. Not so lame, after all. Let’s set aside for a moment the regrettable extension of the Bush tax cuts, now properly called the Obama-Republican tax cuts, or “Kumbaya for Billionaires.” This extension, however hateful to us, seems to have opened the gates toward better things. We want to briefly celebrate the last few days’ repeal of the odious Don’t Ask, Don’t Tell policy, passage of a health bill for 9/11 responder-heroes sickened by (some dying from) the toxic ash at Ground Zero, and Senate passage of the New START treaty with Russia that will reduce nuclear stockpiles and provide for closer monitoring of old weapons facilities in the former Soviet Union. (See “Hiroshima, 65 Years On” and “Nagasaki, Not Forgotten.”) (The photo above shows President Obama and Russian President Dmitri A. Medvedev signing the treaty in Prague in early April.)

We also want to thank the Republican senators who joined the Democratic majority and helped put these bills over the top. We understand that these votes were not politically easy for them, and we’re grateful for their votes of conscience. Senator Dick Lugar of Indiana, in particular, helped move his colleagues to vote for New START. The nation should be grateful to Mr. Lugar, one of the true grown-ups of the Senate, and the Republican senators who listened to him.

The bills approved in the last week were passed in a flurry of activity because they had been deliberately held up for an unconscionably long time by the Republican leadership. They—particularly Jon Kyl of Arizona—repeatedly delayed dealing with the New START treaty, then whined about being rushed into action. Senator John Kerry deserves praise, too, for his steady, patient leadership on New START. The GOP also stubbornly, coldly stonewalled passage of the 9/11 responders health bill until they were shamed into submission by Jon Stewart (dead serious on Comedy Central) and Shepard Smith of Fox News, to both of whom we tip every hat on the rack. How many sick and dying workers suffered needlessly as Republicans postured about fiscal austerity while pushing for the billionaires’ tax cut extension? (The bill, we note with dismay, was whittled down from the $7.4 billion legislation passed by the House to $4.3 billion.) New York Senator Kirsten Gillibrand deserves great credit for her leadership on the DADT repeal.

While praising the accomplishments of the 111th Congress under the leadership of Senator Reid and House Speaker Nancy Pelosi, let us point you to a piece from just after the midterm elections, “A Failure to Communicate—Not a Failure to Govern,” that shows the accomplishments of the House and Senate in the last two years. The Democrats, with scarcely a vote from the other side, passed an impressive, indeed historic amount of public-friendly legislation. They deserve our gratitude, which can come in the form of phone calls, letters faxed and mailed (see our Political Action page for contact info), and votes. Campaign volunteering, too.

Although we’ve been harshly critical of the president about the tax deal among other issues, we thank him for his steadfast push on New START and applaud his careful, strategic planning on repeal of DADT (he wanted to build military brass support + Senate repeal rather than letting the courts kill it). The president says “we are not doomed to endless gridlock.” We can hope, but we expect insane and raucous fights, often over nothing, in the 112th Congress. We pray that the president and (still) Senate Majority Leader Reid and congressional Democrats have learned a few things about standing up for what they believe in, persisting, getting the message sharp and clear, and not backing down. The tax bill was a horrible, costly, long-damaging error that didn’t have to happen. It hurt Obama’s relations with his own party, but may have earned a little goodwill from a few members of the opposition party (we’re not holding our breath). Let’s hope Democrats have learned some lessons in fighting. And let’s keep after them to keep the gloves on. They’ll need them.

These positive developments, after so many months of obstruction and passivity, all make for a merrier holiday season. They will bring a healthier new year for the long-suffering 9/11 responders (not just New Yorkers: volunteers poured in from every state), some relief for military service members oppressed by the unjust, 17-year-long DADT policy, and a safer new era for every person and nation endangered by aging and unsupervised nuclear stockpiles and weapons systems.

Now, back to writing those last Christmas cards (including ours to you) and wrapping a few last gifts . . .

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Obama/Medvedev photo by Doug Mills/New York Times

U.S. Capitol by E. McKnight Kauffer

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Sanctimonious Purists Unite

Friday, December 10th, 2010

“People will have the satisfaction of having a purist position, and no victories for the American people. And we will be able to feel good about ourselves, and sanctimonious about how pure our intensions are and how tough we are.”

President Obama, in reply to a question about “what your core values are, what specifically you will go to the mat on”

White House press conference, Tues. Dec. 7, 2010

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An Open Letter to Obama and Biden

NO DEAL

Unfair, Unaffordable  |  No “Kumbaya” for Billionaires

Dear President Obama and Vice President Biden:

You can denounce us “sanctimonious purists” if you like, but one thing you should understand is that we’re not just disgusted with the deal you’ve struck with the Republicans; it’s your timing, and the fact that this desperate compromise did not have to happen. What we oppose is your habitual over-readiness to compromise, your unwillingness to fight before you get backed into a corner. We’re not interested in your readiness to fight Republicans next year (we’ll believe it when we see it); we’re angry about your failure to fight them on these issues in 2010. For the past year you could have been speaking out loudly, publicly, in a sustained fighting-mode campaign, for the continuation of unemployment insurance benefits and against the extension of the Bush tax cuts. Instead you signaled a willingness to find “common ground.”

You never pushed for the unemployment extension when you had a chance, and when you had big Democratic majorities in Congress. You didn’t take the lead to embolden Congressional Democrats before the midterm elections, making big speeches in the districts of the wavering, cautious members of Congress up for reelection. (They weren’t bold, either, but had you taken the lead they would have had more calcium in their spines.) You didn’t meet with Congressional Democrats before you cut this deal with the Republicans, according to Senator Mary Landrieu, who denounces this deal’s “almost moral corruptness.” Now, if Mary Landrieu is disgusted, then the outrage cannot be said to be limited to “liberals.”

Why should a Democratic-majority Congress vote for a measure Republicans want, a deficit-deepening measure for which the GOP will later hypocritically blame them? This is part of the GOP strategy. Let Dems do the lifting, then blame them. You know how Republicans operate.

We’re very concerned that if the tax cuts are extended, their cost to the Treasury will be used (again) as a rationale for cutting Social Security, Medicare, health care reform, and other social safety-net programs. As Congressman Peter Welch of Vermont has written in his letter to Speaker Pelosi, “Without a doubt, the very same people who support this addition to our debt will oppose raising the debt ceiling to pay for it.” You didn’t address this, and you can’t blame the “sanctimonious purist” liberals for this predicament.

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Mary Landrieu Slams “Obama-McConnell Plan”

Tuesday, December 7th, 2010

“I’m going to argue forcefully for the nonsensicalness and the almost, you know, moral corruptness of that particular policy. . . . This is beyond politics. This is about justice and doing what’s right.”

If we had three hats* we’d tip them all to Louisiana Senator Mary Landrieu, who today blasted the Republican–Obama plan to extend the Bush tax cuts for another two years. Levees Not War faxed a letter to Senator Landrieu’s office this morning urging her to oppose the deal; we had no idea she was so passionately opposed to the immorality of the giveaway. We salute her forceful statements and hope she will firmly vote “no” when the time comes. Please join us in phoning Senator Landrieu’s office to thank her for her stand against the unfair and unaffordable “Obama-McConnell plan”:

Phone

WDC:  202-224-5824  |  N.O.:  504-589-2427 |  B.R.:  225-389-0395

Fax

WDC:  202-224-9735  |  N.O.:  504-589-4023  |  B.R.:  225-389-0660

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“It’s what I’m calling the Obama-McConnell plan. We’re going to borrow $46 billion from the poor, from the middle class, from businesses of all sizes basically to give a tax cut to families in America today, that despite the recession, are making over a million dollars. I mean, this is unprecedented. Unprecedented.”

Senator Landrieu was quoted on MSNBC’s The Ed Show Tuesday night as saying that before Obama met with the Republican leadership to work out the tax extension plan he did not meet with the liberal Democrats, the moderate Democrats, or the conservative Democrats. Her remarks were reported by Ryan Grim in the Huffington Post (and on Dec. 8 by TalkingPointsMemo’s Brian Beutler under the title “Landrieu Blasts ‘Obama-McConnell’ Plan for Selling Out Black Voters”: full text below):

Mary Landrieu: ‘Obama-McConnell Plan’ Is ‘Almost Morally Corrupt’

Huffington Post, Dec. 7, 2010 | by Ryan Grim

Sen. Mary Landrieu, a conservative Democratic from Louisiana, lashed out Tuesday at President Obama’s deal with congressional Republicans that allows tax cuts for the wealthy to be extended for two years.

Extending the tax cuts for those making more than a million dollars a year is borderline immoral, Landrieu charged. “I’m going to argue forcefully for the nonsensicalness and the almost, you know, moral corruptness of that particular policy,” said Landrieu, walking into a meeting with Vice President Joe Biden and Senate Democrats. “This is beyond politics. This is about justice and doing what’s right.”

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Is Barack Obama a “Manchurian Republican”?

Sunday, December 5th, 2010

[ cross-posted at Daily Kos ]

Are you a Manchurian Republican? When we sent money to your campaign and went door-to-door to get out the vote and made phone calls for Obama for America, were we helping elect a (soft) Republican? If not, then prove you’re a Democrat.

Thus begins our latest letter to the president. More riveting excerpts below. We suspect it will get more attention from you, gentle readers, than from the Oval Office.

We posed the Manchurian question in a letter written in frustration after Obama’s failure to stand up firmly against extension of the Bush tax cuts for the wealthiest 2%; his silence amid chatter about curtailing or privatizing Social Security and Medicare; his chronic lack of any definite, robust job-creation plan for Main Street (Wall Street’s been taken care of); and, the hottest-burning frustration just now, his repeated capitulations to our Republican tormentors and his . . . captors? Friends? BFFs?

The letter was sent after his post–midterm election summit meeting last week with McConnell and Boehner—the meeting that had been scheduled earlier but was abruptly canceled by the GOP leaders because of unspecified “scheduling conflicts,” a slap in the president’s face. Once the “no compromise” Republicans deigned to meet with the chief executive, he apologized for not having reached out to them more in the past two years. (We don’t know yet whether he crawled in to that meeting on his hands and knees; the White House press office has not replied to our inquiries.) Just the day before the meeting, Obama had announced his cynical decision to freeze federal workers’ pay for the next two years in order to save $5 billion—less than the U.S. spends in Afghanistan every month. Does he not realize that taking away these workers’ income, besides being morally wrong, also reduces their spending power and thus sets the economy back even further? (This is why unemployment benefits are stimulative to the economy generally.) Politically astute, too: what a way to win federal workers’ votes in 2012. What will he do when Republicans actually shut down the government, as they’ve been chattering about doing for months now? Find “common ground”?

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No “Kumbaya” for Billionaires

Tuesday, November 9th, 2010

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[ cross-posted at Daily Kos ]

Today when the New York Times reports “Tax Cut Timing Is Proving Problematic for Democrats,” we faxed and mailed the following letter to President Obama and sent similar messages to his economic team (Goolsbee, Bernstein, Elizabeth Warren), along with Democratic National Committee chairman Tim Kaine. We’re sorry to hear the timing’s inconvenient, but our view is that a shortage of tax revenue from the upper 1 and 2 percent tax brackets is “proving problematic” for America: for the unemployed, for the crumbling infrastructure, the public transportation that isn’t being built, the teachers and police who are being laid off, and so on. The richest 1% of Americans now take home almost 24% of income; in the past 30 years more than four-fifths of the total increase in American incomes has gone to the richest 1% (Nicholas Kristof, “Our Banana Republic”).

Join us in pressing on the White House and congressional Democrats (there are still some left) to do the right thing for America and not extend the Bush tax cuts for the upper 2%. Obama and the Democratic-led 111th Congress passed some 25 tax cuts for the middle class (the “lower 95%”), as he promised he would in 2008, but the Democrats forgot to make sure we knew it. Contact info here. White House phone: 202-456-1111. White House fax: 202-456-2461. Senate. House of Representatives.

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Restore Top Rate to Reagan-era 50%

Dear President Obama:

It has to be you, the President, taking the lead on not extending the Bush tax cuts for the richest 2%. Congressional Democrats won’t move without your lead. Gain the upper hand and the moral high ground by not compromising on this. Speak up, and hold firm. Stay in campaign mode—the G.O.P. surely will.

Economic fairness. It would be unfair to the point of criminal to extend the upper 2% tax cuts when the nation is suffering 10% unemployment, 15 million are unemployed, infrastructure is crumbling, and the richest 1% own almost 24% of income. In the past 30 years more than 4/5 of the total increase in American incomes has gone to the richest 1%.

Political winner. In addition to the moral argument, it is essential politically that Democrats take a stand for the middle class. The G.O.P. is handing you a gift, just as Gingrich did to Clinton over Medicare cuts. Bring it on, G.O.P.—we’re not backing down. Force the Republicans to show who they really care about. You already know that they are not serious about reducing the deficit. Anyway, the more they pay in taxes, the less they’ll have to donate to anti-Obama commercials.

“Compromise” by honoring Reagan. Raise the upper-income rates to the 50% they paid during the Reagan years of 1982–1986. Tell ’em, “You’re always praising Reagan, so if it was good enough for him, it’s good enough for you now.” Honor the Gipper, and pay your share.

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