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Tag Archives: Republicans

Jay Z Gets It Right on Tax Increases

Jay Z was asked about paying more taxes recently:

I’m willing to bet that he isn’t the only high income earner who feels that way. Its not that they aren’t willing to pay more. They simply want more accountability regarding how taxpayer money is spent.

I doubt we’ll see that from either party anytime soon.

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Reid Goes Nuclear, Blocks Vote on Jobs Bill, President Blames House Republicans??

We all remember the speech.  “Pass this jobs bill right away!”  We all heard that phrase many times during the President’s prime time speech on jobs.  Yet, after a month, there had been no bill brought to the floor of either chamber of Congress.

When I wrote about how Dems weren’t even trying to place the bill in the House, I recall someone saying that there was no point, because Republicans wouldn’t vote for it and it would lose.  My view was (and is) that you at least have to try.

According to President Obama, Republicans are blocking his bill in the house, so he took the time to call out Eric Cantor during a stop in Texas:

President Barack Obama got tough on House Majority Leader Eric Cantor (R-Va.) on Tuesday, calling him out by name for saying he will block a vote on the president’s $447 billion plan to create jobs and boost the economy.

“Yesterday, the Republican majority leader in Congress, Eric Cantor, said that right now, he won’t even let the jobs bill have a vote in the House of Representatives. That’s what he said,” Obama told a crowd in Mesquite, Texas. “Won’t even let it be debated. … Do they not have the time? They just had a week off. Is it inconvenient?”

Now, if thats true, then the President is right for calling him out.  But, Cantor retorted with a good point about support, or lack of, for the bill from the President’s own party:

Cantor said Monday that the president’s jobs bill is dead on arrival in the House and won’t be brought to a vote. “This all-or-nothing approach is unreasonable,” he said. “I would say from a practical side … he’s got problems on his own side of the aisle with provisions in the bill that Democratic members disagree with. There are many issues that I’ve listed here that we can work together on. So instead of continuing to maintain this sort of campaign posture, let’s do something to work together.”

Somehow, the President conveniently left out that many in his own party don’t support his bill as written.  But pointing that out wouldn’t score political points, now would it?

Then, the Obama campaign sends out an email pointing out that Cantor and Co. were blocking the bill. Because of course, the best way to raise money is to call out the other guys, right?

There was only one problem.  Senate Majority Leader Harry Reid, who happens to be a Democrat, went “nuclear” in order to block a vote on the very jobs bill that President Obama yelled at Republicans for blocking.  In other words, to prevent a vote, Reid changed the rules of the Senate:

Reid and 50 members of his caucus voted to change Senate rules unilaterally to prevent Republicans from forcing votes on uncomfortable amendments after the chamber has voted to move to final passage of a bill.

Reid’s coup passed by a vote of 51-48, leaving Senate Republican Leader Mitch McConnell (R-Ky.) fuming.

The surprise move stunned Republicans, who did not expect Reid to bring heavy artillery to what had been a humdrum knife fight over amendments to China currency legislation.

For those who forgot, the last time there was discussion of the “nuclear option,” it was because Democrats were stalling to block Bush judicial nominees, and Republicans were threatening to do what Reid did yesterday.   Of course, back then, Dems were howling that it wouldn’t be right for Republicans to change how things had been done in the Senate for many many years just to get their way, and in the end there was a bipartisan compromise to get past the gridlock.  Yet, Reid jumped in yesterday and opened Pandora’s Box.

Reid claims his move was to prevent the Republicans from offering endless amendments to the bill up for vote, and that Republicans were just trying to “embarrass the President” since they know the bill wouldn’t pass as written–due to lack of support from Senate Democrats.

So, the question is, will the President call out his own party?  Will his campaign send out an email talking about how Reid and friends are blocking the jobs bill and should explain themselves?

Don’t hold your breath.

Random Thoughts: White House and the Ratings Downgrade, Al “global warming” Gore Unhinged, Wisconsin Recall Elections

Just a few thoughts and observations:

With the recent downgrade of the country’s credit rating by Standard & Poor’s, the White House had to blame someone for what happened.  So they complained loudly about how S&P had made a mistake with the downgrade, even pointing out an accounting error that S&P made that made things look worse than they really are.  Then, they came out and blamed the Tea Party for causing the downgrade.  I’m confused.  If S&P made a mistake, it would have nothing to do with the Tea Party, right?  Then again, everything is the Tea Party’s fault, from what I hear.

The other day, President Obama did a press conference to address the credit downgrade.  While he was giving his speech, the stock market dropped 200 points.  Ouch.

Speaking of Standard & Poor’s, how do you go forward with a downgrade even after you’re told you made an accounting error?  Simple.  Just blame the politicians!  Say it’s because Congress can’t work together.  Come up with a worthy excuse.  But just don’t own up to it.  By the way, they didn’t downgrade Lehman Brothers until AFTER they imploded…

Former Vice President and current Global Warming–uh,  Climate Change– crusader Al Gore was giving a speech recently and ran off the rails.  Seems he was calling BS on those who don’t agree with him, and called the scientists who put out anti-warming info fake.  I could’ve sworn that the main basis for the argument is whether or not the changes occurring are man made or natural.  But I digress.

It’s recall season in Wisconsin.  Democrats, angry that the Republican-led Legislature changed collective bargaining law, were able to collect signatures to force a recall election for 6 Republican state senators.  In order to have a chance at taking control of the state Senate, they needed to win 3 of the seats up for recall.  Unfortunately for them, they only won 2.  There are more elections coming but they will have no chance at winning control until the next election.  If the Dems had succeeded, I think it would’ve sent shockwaves nationwide.  Having said that, pay attention to the redistricting fights going on in the states.  Redistricting happens every 10 years and the party in power at the time in a particular state usually tries to stack things in their favor.  Look and see how strange some districts end up looking just to accomplish either keeping a rep in office or getting the opposition OUT of office.

Where Does Tax Rhetoric Meet Reality?

There has been a lot of talk lately about taxes.  George W. Bush lowered tax rates twice while in office.  Democrats portray those cuts as “tax cuts for the rich” as though no one else benefitted–not even the large number of folks who were removed completely from the tax rolls due to the minimum taxable amount being increased.  Democrats also complain about the cost of the cut for the richest folks, constantly ignoring that the cost of the cut for the other brackets was 3 times as much.  Obama then extended those cuts, much to the chagrin of the Dems.

Now, as talk of deficit reduction and debt reduction heats up, there is much hand wringing going on regarding what to cut and where to get more revenue.  Democrats, of course, say raise taxes.  Republicans say no.

Republicans are playing hardball in terms of tax policy, saying no tax increases will be on the table.  In a way, I can agree, as the more important thing is to lower spending.  Not only that, but the government has a pattern in place:  every time more money comes in, they find a way to spend it.  Without going into detail, the fact that by law, surplus Social Security money is put into the general fund for spending purposes is a prime example.  Anyway, Republicans have their own tax mantra that they will say over and over and over again:

Tax cuts spur economic growth.  But tax increases destroy the economy and destroy jobs!

Having heard this so many times, I finally wondered how much truth there is to this.  Nevermind that I personally believe that taxes can be increased with with no devastating effect to the economy.  I wanted to know what history has shown.  Was there any conclusive proof that showed where tax increases had really hurt the economy?

From what I knew already, I knew that there were examples where tax rate cuts had at least helped spur the economy.  Higher taxes helped fund World War II.  JFK also decreased taxes, which led to economic growth.  Even under G.W. Bush, the economy grew after his tax rate cuts, though in a very tepid fashion.  But what about tax increases?

I was skeptical that I would find evidence and was convinced that the notion was simply a Republican talking point, but there is indeed proof.

  • President Herbert Hoover signed a major tax increase in 1932.  The top marginal rate was increased from 25% to 63%, among other rate increases.  Tax revenues in 1933 were 42% of what they were just two years prior.  Unemployment rose to nearly 25%.  Slowly, though, the economy recovered until…
  • In 1937, Roosevelt signed into law new tax increases.  The result was that the economy went back into recession and didn’t come back until during WWII.  Truman actually cut taxes during that time and by the end of the decade there were budget surpluses.
  • Reagan signed a major tax rate cut in 1981.  Many Republicans like to point this out about Reagan and say that those cuts are why the economy grew during the Reagan years.  But that leaves out part of the story.  Reagan signed a number of tax increases starting in 1982.  Tax loopholes were closed and Social Security was overhauled.  Businesses ended up paying more taxes as a result.  Despite this, there was still economic growth.
  • During the 90s, Clinton raised taxes.  The country was coming out of a recession, and even with the tax increases, the economy grew.  Clinton did, however, also lower taxes on capital gains in the mid-90s.  Many say it was actually the tax cut and not the increase that provided the huge boost in revenue to the government.

So, what is the outcome of my info hunt?  Well, as usual, both sides will make declarations without telling the entire story.  But right now, Republicans are most guilty of cherry picking.  While it’s true that some tax increases did real damage, both Reagan and Clinton showed tax increases can be done and they NOT throw the economy into chaos.  I will also point out that they are especially guilty of ignoring Reagan’s tax increases (yes plural) when talking about how his cuts grew the economy.

Bottom line, rolling tax rates back to pre-Bush levels will not damage the economy.  Just like before, businesses will still find a way to survive and eventually thrive, the economy will grow, and there will be jobs.

Thoughts about unions

  • I’ve admitted to not being a fan of unions.  The main reason for this is that I feel a job is an agreement between an employer and an employee.  The employer agrees to provide agreed-upon wages and perks in return for the employee doing a job.  Either side can terminate this agreement at any time.  Introducing a union into the mix adds an extra layer into the agreement, typically in favor of the employee.  Now, the employee can leave at any time, leaving the employer to have to fill the spot.  Meanwhile, the employer now has to go through red tape and hurdles to fire an employee.
  • Forced unionization is just flat out wrong.  In a forced unionization state, a non-unionized worker who goes to work at a unionized establishment MUST pay union dues whether they get involved with the union or not.  One of the reasons unions  are protesting in Indiana (and why their Democrats have fled) is because a new law up for vote by legislators would bar non-union employees from having to do this in a union shop.  This idea is being described as “an attack on workers.”  Isn’t forcing them to unionize an “attack on workers?”
  • I mentioned this in a discussion the other day.  Why is it no one on the supporting side of the unions can admit that maybe–just maybe–in some cases unions have too much power?  And that losing some things isn’t a total loss?
  • In any other situation, wouldn’t the idea that a group could take money, use that money to help elect people on the side of their cause, then go negotiate with these same people in order to get as much as possible for the group a conflict of interest?  Just wondering, since most complains are about conservatives attempting to “bust up” unions but one rarely hears complaints about Democrats giving more power to unions.

My last thought is a quote.  I found this comment online in response to a news article (“Right to Work Bill Puts Republicans, Democrats At Odds”) and it was one of the most sane, concise comments I’ve seen in the entire pro-union/anti-union debate:

All of these negatives that are presumed to happen to union workers if this bill passes are the issues the rest of us face already. All of us that do not have benefit of a union can be fired for no reason or replaced by someone just because they will do our job for less. That is Capitalism. When anyone suggests that there should be laws protecting all workers, as I do, they are called Communist. Anyone who has read Marx knows that laws to protect the rights of workers is a Marxist ideal. If it is fair and just for union workers to require certain benefits from employers then it should be so for all workers. I have seen both sides. I have been replaced by someone with less experience who would do my job for less money. Working for the state as a social worker, I have had my pay cut by 60% with no warning, then to have it ‘eliminated’ with no warning. I have been hired for a job and then had more and more of my supervisors responsibilities put on me. I have also been witness to my husband, who is owner of a national shipping company, struggling with incompetent workers whom he can not fire without a major ordeal and unreasonable demands from the union, even though he voluntarily pays two dollars more an hour than is consistent with the market. My mother was a union factory worker. She has attested to the fact that the union often protects people who take advantage of the power the union affords them. When workers cost a company money, it is the consumer, you and I, who absorb the cost. Someone always loses when the other side has too much power. There should be laws that protect all workers while still allowing businesses to function as they see fit.

What to expect from the State of the Union speech

Well, we’ve come to that time of the year again where we get to hear the pleasant present state of our Union. A quick history:

Seal of the President of the United States

Image via Wikipedia

  • The first SOTU address was by George Washington on January 8, 1791 in NYC.
  • Thomas Jefferson started mailing it in in 1801.  Literally.  He began th e practic e of writing the speech and having it read to Congress by a clerk.
  • Woodrow Wilson restarted the read-in-person tradition in 1913.

So, what can we expect this evening from President Obama?  Well, one would have to assume (and hope) that the most important topic of discussion will be jobs and the economy.  No doubt he will say that the previous stimulus was a success (though there is a lot of debate about that), and maybe even mention again that if not for that, the unemployment rate would be worse.  But I’m sure there will be some discussion of bipartisan efforts to get the economy really moving.

We should also hear something about debt reduction.  This will be a tricky area for the President and I wouldn’t be surprised if he didn’t address it at all.  The response to the report from his Debt Commission was predictable–Republicans were upset about talk of tax increases and cuts to defense, while Democrats were opposed to spending cuts and eliminating tax deductions, not to mention making changes to Social Security (even though those changes would kick in around the time today’s 4 year olds will draw retirement).  If he steps up and emphasizes that people will need to buck up and take the pain, I’ll definitely give him props.  Especially since the bulk of the criticism would come from his own party, still mad at him for caving to Republicans on the extension of the Bush tax rates and on cutting payroll taxes.

With the recent shootings in Arizona, President Obama will definitely spend some time addressing the tone of rhetoric in the political sphere.  He will probably avoid pointing fingers at one party or another, but the topic can’t be ignored.  The aide to Gabby Giffords who helped save her life is supposed to be there so expect that to be one of the bipartisan applause moments.

Speaking of bipartisan, many members of Congress, in an effort to show unity, are crossing the aisles to mix with members of the opposing party.  Some are simply sitting with members of their own state’s delegation, while others are reaching out to colleagues they have known for years.  It will be an interesting visual, especially during those times during the speech when the President tends to make a comment that one party (or the other) stands and applauds.

So, lets get the popcorn ready.

to pass a bill they say we can’t afford, let’s make it MORE expensive

An article out today explains how Senator Harry Reid has added some things to the Obama tax cut deal to help get it passed. Confusing, since much has been said about how the agreement does nothing to help with the deficit, and how the tax rate cuts for the higher income earners is unaffordable:

The sweeping tax cut bill introduced Thursday night by Senate Majority Leader Harry Reid is chock-full of sweeteners which could serve as a legislative pacifier for Democrats outraged over the concessions President Obama has handed to Republicans.

The stimulus-sized package includes about $55 billion worth of short-term tax extensions for businesses and individuals. They cover a host of alternative energy credits, a potential salve for environmentally conscious lawmakers, as well as targeted benefits for everything from the film and television industry to mining companies to rum producers.

Senate Tax Cut Package Filled With Sweeteners, Obama Predicts Passage

So, the answer to unaffordability? Make it more expensive!

Obama can’t win for losing

Last night, the President announced a compromise on tax rate cut extensions and unemployment benefits.  He threw in a few other pieces (including a Social Securit

Barack in Cedar Rapids, IA 10/29/07

Image by Barack Obama via Flickr

y rate cut) and implored his party to come on board.

It seems he’s not getting the love.

Members of the right are furious.  For them, its not enough to get the desired tax rate cut extensions and an extension of unemployment benefits.  In their eyes, Obama has sold out for agreeing to extend the tax rate cuts for “millionaires and billionaires.”  Add that to how he increased troops in Afghanistan and hasn’t closed Guantanamo Bay yet, and he has some liberals apoplectic.  Searching Google for “liberals furious with Obama” brings up a ton of links that popped up in less than 24 hours, all at various levels of ticked off-ness and disbelief.  Comments range from “fight harder” to “Obama got rolled” to “Obama caved so hard it scared the bats!” (the last one from the Huffington Post).  It will be interesting to see the intraparty fight that will follow in the coming days.

Debt reduction–when cutting spending isn’t really cutting spending

Upon further review of the Debt Commission report that got shot down last week, I found something interesting that most of us don’t even realize.

Budgets in Washington tend to factor in an automatic annual increase in spending.  In other words, every year the amount spent on a given program goes up regardless of necessity–and trust me, we all know that an organization will find a way to spend the money in order to avoid a budget cut.  Anyway, when the debt commission spoke of spending “cuts,” there was outrage from both sides (depending on the program to get the cut).  But it turns out there were smoke and mirrors involved.  The commission did not recommend actual cuts.  What they did recommend was a reduction of the annual budget increases.  In other words, they said “instead of programs x, y, and z getting automatic annual increases of 3%, lets just allow them to increase 2%.”

What??

Translation:  they couldn’t find actual spending cuts to be made!  No reductions in spending.  No freezes in spending.  Just a slowdown in growth.  Just wow.

I wish I could operate my home budget the way these folks run Washington!

QuickHit: Just a question or 3

Why is raising the retirement age for earning Social Security such a big deal, when the changes wouldn’t be implemented until 2050 and 2075?  That means the folks most affected by the changes either a)haven’t had much chance to start contributing to social security or b)haven’t been born yet!  Further, where is this idea coming from that keeping the retirement age where it is is some kind of right?

Speaking of rights, do people realize what the concept of a “right” is?  Its as though anything that someone feels a person should be entitled to is a right, even if it involves forcefully taking time, talent, or treasure from someone else.

Is it not possible that allowing the tax rate cut for those over the $250k mark may not end up costing $700 billion over ten years?  Can we really predict how people and revenues will behave 10 years out?  If the economy improves, wouldn’t that number come down?

And finally, will someone recognize that the problem isn’t just revenues, its also spending?  That the main excuse for wanting to let the cuts expire and supposedly bring in the $700 billion is to try and fund the government WITHOUT cutting spending?

Just a few thoughts.

QuickHit: very good article about tax cuts and small businesses

today on Yahoo, there is a very good fact checking article about tax cuts and small businesses. As is usually the case, both parties are bending numbers to make their argument look better, but the truth is in the middle:
FACT CHECK: Small business caught in tax battle

Tax shenanigans, or why $700 billion is unaffordable, but $3 trillion is affordable

The level of back-and-forth over the extension of tax rate cuts enacted under Bush 43 has reached a fever pitch.  From the right, we get “all or nothing!” or “no one should have a tax increase in this economy!” or, to borrow from a classic hip hop song by the one-hit-wonder group, The Double XX Posse, “not gon be able ta do it!”  From the left, we get “no tax cuts for millionaires and billionaires!” or “tax cuts for the rich” and “no subsidizing the rich” or “they don’t need it.”  But my favorite is that, in essence, we can’t afford the $700 billion cost (CBO projected).

For the life of me, I could not figure out how anyone would have the nerve to specifically talk about the $700 billion that extending the current rates for high-income earners may cost (remember, they are projections, so its only a guess), but not talk about how the cost of the rest of the cuts.  After all, the same CBO that produced the $700 billion number also stated that the TOTAL cost of extending ALL current tax rates would be $3 trillion.  So what gives?

Just more political shenanigans.

Let’s step back for a moment to 2007.  From wikipedia:

The PAYGO system was reestablished as a standing rule of the House of Representatives (Clause 10 of Rule XXI) on January 4, 2007 by the 110th Congress:

It shall not be in order to consider any bill, joint resolution, amendment, or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit or reducing the surplus for either the period comprising the current fiscal year and the five fiscal years beginning with the fiscal year that ends in the following calendar year or the period comprising the current fiscal year and the ten fiscal years beginning with the fiscal year that ends in the following calendar year.

Less than one year later though, facing widespread demand to ease looming tax burdens caused by the Alternative Minimum Tax, Congress abandoned its pay-go pledge.

So, to set themselves apart from the previous congressional crew, the swept-into-power Democrats in the House re-enacted a rule that makes a lot of sense–if we are gonna spend it, we are going to pay for it. Tub notice the next next line: it lasted less than a year. PAYGO was shelved, allowing major pieces of legislation, like the Bush Stimulus package in 2008 and Obama’s Stimulus package in 2009, to be passed without the rules applying. Then, new statutory PAYGO rules were again passed in February of 2010.
In addition, Obama signed new budget rules. From Businessweek:

Under the budget rules, any tax cuts benefitting individuals earning more than $200,000, or couples earning more than $250,000, must be offset with new tax revenue or spending cuts elsewhere.

Apparently, the tax cut line-in-the-sand was drawn long ago. After bucking the PAYGO rules, now the rules must apply and for those high-income earners, tax cuts aren’t affordable.
Here’s what’s missing.
Lets be honest. If there is an argument to be made, its that NONE of the tax rate cuts are affordable. But let’s stick to the current discussion. The reason that Democrats are saying we can’t afford the $700 billion is not because we can’t afford it. That can’t be the case, since evidently, financing $2.3 trillion via debt is not a problem (and allowed under the rules!). The real problem is that offsetting spending cuts would have to be made. History has shown that Democrats are not big on cutting spending (unless its Defense related). Any mention of cutting programs, especially entitlement programs, is met with more resistance than a goalline stand in the national championship game. Any other arguments, like referring to lower tax rates as a “subsidy” (how can the government grant or gift a person their own money) or “welfare for the rich” (once again, its their money) just distracts from the true discussion.

Don’t worry, my Dem friends, I’ll tackle the Repubs too.

Tax cuts, small businesses, and the $250k line

During the long drawn out battle regarding the Bush Tax cuts.  Democrats have drawn the line at $200k/yr for individuals and $250k/yr for families as the dividing line between those who should get permanent tax cuts and those who shouldn’t.  The main argument is that the $700 billion in lost revenue over the next 10 years is unaffordable.  Republicans counter that not only should there be no tax increases in these economic times, lots of small businesses will be negatively affected.  Of course, the truth (as I see it, of course) is somewhere in the middle.

A logical approach would be to extend them all temporarily (give it a year or 2), then let them expire.  Now, people are right now saying I’m crazy.  But if we’re going to be for real about getting the deficit under control, that should be option 1 on the table.  Republicans like to say “no tax increases” but there has to be a middle ground where folks aren’t overtaxed and the government is getting more revenue.  If anything, add a new bracket for folks making a million per year or more.  Either way, its illogical to completely remove the idea of a tax increase of some kind to combat spending.

Democrats, on the other hand, have established $250k as the line in the sand.  Mind you, no one has any idea why this number is the magic number.  But as Dems often do, it becomes an emotional issue.  That approach started from the beginning, when the tax cuts were enacted.  Despite the easily researchable facts that the cuts actually removed a number of lower income taxpayers from the tax rolls, reduced the lowest tax rate, and shifted the overall tax burden to the highest income levels (look it up), the cuts have often been referred to as “tax cuts for the rich” simply based on the sheer amount that an upper income earner got to keep (not “was given to them” as is often used as yet another argument).  What’s often heard is that folks making that much money either “don’t need a cut” or “won’t spend it.”  Or, that they cost too much.  I usually wonder how it can be said that the estimated $700 billion over 10 years is considered unaffordable, when the rest of the cuts are estimated to cost over $2 billion over the same time.   This is why if anything should be done, ALL should be rolled back.

I predict that the White House will give in to all cuts being renewed for 2 years in order to avoid all of them expiring on 12/31/10, which would be a political disaster.

QuickHit: Show me REAL Healthcare Reform

People are thinking that Republicans have a snowball’s chance in Hades of repealing the so-called Health Care Reform bill.  That’s a waste of time.  You know what would impress me?  If they turn around and say that they are going to create legislation to provide REAL healthcare reform.  Reform that addresses what the previous bill should’ve addressed–the rising costs of health care.  Every year, the costs of getting medical care goes up.  Ladies and Gentlemen, THAT is the main reason the cost of health insurance goes up every year.  So let’s see if someone comes up with a way to address that.

The sky is falling!!

Unless you’ve been sleeping under a rock, you have heard or seen that republicans took over the House, gained seats in the Senate, and won a few governors races.  From the reactions of many of my left-leaning friends, one would think the world is about to end, or that something large, dark, and ominous is coming (Think the dark planet in “The Fifth Element” or a comet or asteroid in “Armageddon” or “Deep Impact”).

While I’m sure this puts a wrench in the plans of Dems to get certain things passed, its not the end of the world.  The government has gone back and forth between the major parties for years and the country has yet to fall off the edge of the flat planet and drift into outer space.  Its not even the first time that one house was controlled by one party, while the other (and the White House) was controlled by another.  Republicans and Democrats will have to figure a way to work together.

Now we get to see if President Obama really meant all those nice bipartisan things he said before getting elected.