I’m sure a lot of you exuded similar reactions to the president’s laughable fiscal proposal to prevent the nation from going over the cliff. He asked for $50 billion in additional stimulus and $1.6 trillion in tax hikes “as part of any ‘fiscal cliff’ deal,” according to CNBC. In all:
The plan calls for $1.6 trillion in new tax revenue over the coming decade, extending the 2 percentage point payroll tax deduction or something comparable to it, and $50 billion in stimulus spending on infrastructure projects.
The White House seeks $960 billion over the coming decade by increasing tax rates and taxes on investment income on upper-bracket earners, and $600 billion in additional taxes.
The only new spending cuts in the plan would come from administration proposals curbing health-care programs by $400 billion over the coming decade and modest cuts from non-health programs like farm subsidies and cutting Postal Service costs and through higher fees on airline tickets.
The plan would also boost spending by extending unemployment benefits for the long-term jobless, deferring looming cuts to Medicare payments to physicians, and helping homeowners refinance “underwater” mortgages.
Geithner also requested the equivalent of a permanent extension of the government’s borrowing ability to avoid wrangling over the issue as in last year’s summertime crisis over raising the so-called debt limit.
Tax increases, more stimulus, and a black check on raising the debt limit. Yeah, hell no. It never ceases to amaze me how the president seems to forget that his mandate, if he had one, is a hollow shell. Obama was re-elected by the 47%, who don’t pay federal taxes, while most of the Tea Party caucus in the House were re-elected as well. Thus, the tax hike fire Obama stoked on the campaign trail was tempered by the fact that the American people re-elected a vociferously anti-tax Republican majority. According to The Hill, they reported on December 3 that the Republican counteroffer included “$2.2 trillion [in cuts] with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.” Both dogs are in the ring.
Republican officials said their offer amounted to $4.6 trillion in deficit reduction when compared directly to the White House offer, which they emphasized was more than what the White House had put on the table.
In its own deficit plan, the White House counts legislation that has already been enacted, savings from future interest on the debt, and savings from the end of the wars in Iraq and Afghanistan. Republicans do not count those as new savings, so their offer amounts to $2.2 trillion in future deficit reduction.
The $800 billion in new tax revenue matches what Boehner offered Obama during their 2011 negotiations for a grand bargain. Republicans are keeping to their opposition to tax rate increases, and aides said Monday they believe that $800 billion can be raised from the wealthy through other means, which their offer does not specify.
Senior Republican aides argued that their offer represented a “fair middle ground” because unlike the White House, they did not use their budget proposal as their opening bid. The House budget contains no revenue increases and included far-reaching changes to Medicare and Medicaid that Democrats consider non-starters.
So, there we have it. We have two deals. One is bad. The other is delusional. Concerning Medicare, we all know that the program poses the most serious threat to our long term financial solvency. As ABC’s Cokie Roberts said on This Week last Sunday, the nation lacks an appropriate amount of young people to keep the elderly on these programs at the current rate. Alas, a liberal agrees that Mr. Arithmetic, not Mr. Ryan – or Mr. Republican – is the enemy of Medicare. However, forty-two liberal members of the House have signed on to a bill that prohibits any spending cuts to the welfare state. It’s a game of give and take, as well all know – and I’m hoping a deal be finalized before December 31. Furthermore, I’m hoping more Democrats see the way of Cokie Roberts when it comes to entitlement spending.
Glenn Reynolds (aka Instapundit), had a few suggestions for the GOP in his op-ed column featured in USA Today on December 3.
1. Adopt the Bowles-Simpson Plan. The plan was the product of a bipartisan commission, chaired by Democrat Erskine Bowles and Republican Alan Simpson, appointed by President Obama to address America’s ballooning deficits and national debt. Most experts agree that it’s a pretty good plan. President Obama didn’t like it because it shrinks government too much.
Tough. It’s a plan, which is more than President Obama has offered, and from a bipartisan commission he appointed. Can Obama get away with vetoing that? Can Senate Democrats get away with rejecting it and bringing on the automatic cuts and tax increases of the sequester? Doubtful. Plus, though the press tends to cover for Obama and blame Republicans, media types love Bipartisan Commissions.
2. Tax the revolving door. I mentioned earlier that Washington is getting richer while the rest of the country gets poorer. (And others are noticing this). One reason why this happens is the revolving door — people shuttle between government, where they make rules governing business, and lobbying, where they make money by taking advantage of those rules.
Well, if you want less of something, tax it. So I recommend a 50% “excess salary” surtax on the earnings of government officials on the Executive Schedule – cabinet and subcabinet officials, mostly — in excess of their government salaries for the first five years after they leave. So, leave a cabinet job paying about $200,000 for a job paying $1 million a year, and the government will take half the $800,000 difference.
3. Make Hollywood Pay Its Fair Share. At the DNC, actress Eva Longoria offered to pay more taxes. Well, back during that Eisenhower era that the Dems are so nostalgic for, there was a 20% excise tax on movie theater revenues. It was established to help pay off the post-World War II debt. Now we’re in debt again. Bring it back. For added fun, extend it to DVD sales, movie downloads and music on CDs and over the Internet. As a great man once said, at some point, you’ve made enough money. If we need more tax revenue, who better to pay it than Hollywood fatcats with their swimming pools and private jets?
In the meantime, the clock is ticking.