Deficit Negotiations
http://thedianerehmshow.org/shows/2011-07-05/deficit-negotiations
The White House says Congress has until July 22nd to come to an agreement on a plan to cut the deficit. One trillion dollars in spending cuts have been outlined, but Republicans and Democrats remain sharply divided on whether some tax increases should also be included. The Senate has agreed to cancel a planned recess next week to allow more time for negotiations: Join us for an update on the negotiation process and how proposed deficit reduction measures could affect the overall U.S. economy.
Guests
David Stockman
former Congressman from Michigan, R
budget director during the Reagan administration
David Wessel
economics editor, The Wall Street Journal; author "In Fed We Trust"
Alexis Simendinger
White House correspondent, RealClearPolitics
Chris Cillizza
author of The Fix, a Washington Post politics blog, and managing editor of PostPolitics.com.
Comments
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I think it's been pretty much agreed that everything possible will be done by both political parties to put off any hard choices until after the 2012 election. The only rub for republicans is to convince the deficit hawks that they have not caved. Democrats only have to show they will preserve the safety hammock, formally known as the safety net. Let's face it many people have become quite comfortable resting on the "safety net" for generations, so the descriptive name for it should now be safety hammock. Would you care for a glass of lemonade, with your section 8 ?
A Harvard study has concluded that 4th of July celebration is a republican rally call. Also of great interest to this observer is the conclusion that this by itself recruits young people to the republican cause. If the mere celebration of a historical event associated with the formation of our country recruits people to a cause that wants to bring us back to the basics of what formed this country? Please return your seatbacks to their full upright and locked position!
14th Amendment. Ironic that the Republican's and Tea Party who claim to desire Constitutional Law as written, now willfully choose to ignore it.
Failure to compromise is unAmerican, should they read the Founders.
American people should be out outraged at all the hypocrisy by the GOP. The fact that they care only about their rich contributors, they don't really care about the deficit. They never have in the past. They clearly are not putting their country first. Unfortunately the U.S. political system has been so corrupted by money that governing the country has become nearly impossible.
How about this:
George W Bush enacted what he called temporary tax cuts, to "return the surplus to the people." Well, mission accomplished -- the surplus is gone. It seems to me the tax cuts should follow.
The deficit is about $1.5 trillion.
Total individual income taxes are $900 billion.
even if you doubled income tax revenues, raising a further $900 billion, there would still be an unsupportable deficit.
And it it not at all clear that raising tax rates will raise revenues. That's because the higher they go, the more people will want to work for Johnny Cash.
If the President ends the Bush tax cuts or cuts the military budget the republicans will destroy him.
I don't care what Ron Reagan would do. He didn't veto the spending bills during his Presidency. He increased military spending.
Basically we got to the place we are now because of St. Ronnie Reagan. We are living in his fantasy world- free government without any burdens or responsibilities. The magic of the free market solves all problems and the rich are glorious saviors stymied by working people asking for a decent life.
I have never understood the sick fetish republicans have for Ronnie Reagan- a liar and a felon.
Stockman has failed at almost ever financial endeavor he has ever been involved with, in the government and privately. Why would anyone ask this guy about anything pertaining to the economy?
Did not the Replicans go on a years-long spending spree under the Bush 43 administration, wiping out a surplus? How strange that they now object to raising taxes to balance the budget, as president Reagan did during his presidency.
David Clay Johnston a Rochester, NY historian has some very real explanation of the tax myths we are usually fed. Mr Johnston has studied the history of taxation and points out very simple solutions to this budget problem.
The Simplest solution to Social Security is remove the income cap. Also he demonstrates that it is the middle class that pasy the highest taxes.
His ideas can be seen in Rochester City News paper written last may.
This is political; the Republicans will not compromise so that this can all be blamed on President Obama. Thery're still looking for his "Waterloo" (which was supposed to be health care).
A special thank you to callers and emailers on this show today . . . for capably communicating the struggles and anger the American voter has with our elected officials NOT doing the job we elected them to do as OUR representatives.
People have become quite comfortable accepting their Social Security check. It is comfortable for them because it is their money- money they paid at 6% every year.
I will be quite comfortable cashing my Social Security check too. As comfortable as I am cashing my paycheck. You must realize, monte, that it is my money. Money I paid for my own retirement. Think about it as a 401(K) without the bankster.
I agree with you....remove the CAP. It is unfair! Why should a teacher pay SS tax on 100% of her income, while those in higher income brackets are exempt after $106,800?
What troubles me about this entire conversation is the use of the term "entitlements" to describe social security and medicare. I do not consider them entitlements. I consider them a retirement plan and health insurance plan which I paid for in "special taxes" while I was working and healthy. It's not like our general income taxes cover the cost of these 2 programs, it is the Medicare and Social Security taxes which cover them. These 2 programs need to be off the table in budget talks. If the government spent the money that was to be in "trust" for these two programs then the government needs to figure out a way to put it back into the programs. Second, It's difficult for me to believe that people actually cheer Republicans because they "stay on message." I think their message is bad for America. I think they are the party that fights for rich white men and not middle class americans, the poor, the unemployed, women, or minorities.
I have been an unwavering supporter of President Obama until the talk of debt ceiling compromises. If the Democratic Party, led by our president, isn't able to let the tax cuts for the wealthy (including my family) expire, I have little hope left.
I have been an unwavering supporter of President Obama until the talk of debt ceiling compromises. If the Democratic Party, led by our president, isn't able to let the tax cuts for the wealthy (including my family) expire, I have little hope left.
How to reduce debt:
1) Decrease spending
2) Increase income
Period.
The nonsense coming out of the mouths of all politicians is not helpful.
History has proven that reducing taxes to the wealthiest killed jobs - not the other way around.
It is really sad our society has created enough dummies to believe these 'talking points' from both re-pub-lickers and de-mock-rats.
Look at what has happened in the past dozen years and open the eyes to see reality.
When there is not enough money to pay the bills you have to not only cut back on spending but also increase income.
What part of this is difficult to understand?
Both sides are lying to us about nearly everything.
The word "politics" comes from two latin words "ploy" meaning many and "ticks" which are blood sucking creatures.
Anything else pertaining to elected officials that needs explaining can be figured out from this.
We-the-People are not even in the mix anymore.
Listening to the Declaration of Independence yesterday on NPR had me wondering about where we are now and how obviously it is time for a new declaration of independence.
Considering present tax system, wouldn’t it streamline process, therefore save $ if there was a box on all payroll checks dedicated to withholdings for support of millionaire and billionaires.
That’s one “entitlement” that will apparently never be threatened.
Call me stubborn, but I just don’t get GOP mantra less revenue = more revenue. It seems like you have to really suspend reality to believe such a thing. It’s like saying up is down and then having such good PR mechanisms set up that half the country actually believe it.
For some time it’s been clear that Stockman regrets his role in foisting Reaganomics (a.k.a. voodoo economics) on the nation - the root cause of that 30 years of folly he referred to. The Republicans haven’t learned that lesson, for that is the philosophy they are still hawking.
While I don’t agree with everything he said, one point he made is interesting. Instead of just talking about deficits, or balanced budgets, he mentioned the question of the size of the deficit as a percentage of the GDP. That suggests that instead of a balanced budget amendment we should have a debt limit amendment, one that limits the amount of debt by percentage of GDP.
(For example, he apparently had no problem with the 150% figure he cited when Reagan took office. I’m not saying that should be the actual number, though. This is just for illustration.)
I’d only caution that instead of an absolute limit, it should be written as requiring a super-majority to exceed that limit. We require a two-thirds vote in Congress to amend the Constitution, perhaps we should do the same for debt above the chosen percentage of GDP.
The connection between the Civil War and our current politics is closer than the guest thinks (and the caller who raised the issue believes). Note the rhetoric of the Republicans: State’s Rights, Secession, Traditional (or Biblical) Values. You can find all of that rhetoric in the Confederacy. And note, most of this is coming from Republicans in the former Confederate States (Rick Perry of Texas for example).
Truly, “the South has risen again”, and is trying to accomplish in the 21st Century what it failed to do in the 19th: destroy the United States of America. Lincoln must be spinning in his grave.
One caller pointed out that the Democrats have done all the compromising, but Republicans claim the opposite (and will seek to blame the Democrats for any default GOP intransigence causes). You just have to understand GOP “newspeak”. In their lexicon any compromise = capitulation. Therefore they will not compromise at all, and instead they demand the Democrats capitulate!
One guest stated: “They [the Republi-Cons] do have some principles here.” He was referring to their refusal to compromise. That reminds me of Emerson’s remark that a foolish consistency is the hobgoblin of small minds.
Sticking to one’s principles is not noble if the principles are wrong. The Unabomber had principles. Bin Laden had principles. Hitler had principles. Would any of us want those principles running this country?
If I thought the GOP’s principles were wise and good, I’d applaud the Party for it’s devotion to them. However, I think they are foolish and disastrously wrong (Stockman’s 30 years, remember?). Thus, blind devotion to such principles should be condemned!
Jeffrey Manor on July 5, 2011 @ 10:26 am wrote: “The deficit is about $1.5 trillion. Total individual income taxes are $900 billion. even if you doubled income tax revenues, raising a further $900 billion, there would still be an unsupportable deficit.”
I don’t know where you got your figures from, but they are wrong (as is your argument). In 2008 revenue from just the individual income tax was over 1 Trillion dollars. Even with the continuing Great Recession (brought to us courtesy of Republi-Con policies, though some Democrats were guilty of following them) I doubt revenue has dropped that much.
Of course, your argument ignores a few things: like the corporate income taxes, the FICA taxes (which have a cap on the amount of income subject to the tax), and the other forms of taxes and “revenue enhancements” (the U.S. doesn’t just collect income taxes, you know).
If you’re going to debate the future of this country, try to get your information both correct and complete!
P.S. - Oh, and doubling $900 billion makes $1.8 Trillion, giving us a $.3 Trillion surplus, according to your figures.
kate elizabeth on July 5, 2011 @ 11:28 am wrote: “I have been an unwavering supporter of President Obama until the talk of debt ceiling compromises. If the Democratic Party, led by our president, isn't able to let the tax cuts for the wealthy (including my family) expire, I have little hope left.”
A fair point, but consider this: What price are you willing to pay for those tax cuts to expire?
Remember, in December of last year the Republi-Cons used the filibuster to hold hostage the unemployment insurance benefits (along with the people who needed them to survive) unless those cuts were extended. Should Obama and the Democrats have gone along with that and abandoned those people?
Now that they have control of the House, you don’t think the GOP will play similar games when the tax cut extensions expire in 2012? Of course they will. The only way to stop them is to vote Democratic. (Of course, I join with you in insisting the Democrats who get elected have a backbone!)
nose2much on July 5, 2011 @ 12:42 pm wrote: “The word "politics" comes from two latin words "ploy" meaning many and "ticks" which are blood sucking creatures.”
Actually, sir, unless you speak in jest, your name should be “knows nothing”. Politics is derived from the Greek word “politika”, meaning “of, for, or relating to citizens”.
Let me get this straight. Every four years for the president, two for the house, six for the senate the American people vote. Time after time people vote for the feel good candidate and kick to the curb any candidate that speaks the hard truth. You claim your being cheated out of your government benefits if there is any compromise to diminish the scope of Social Security or Medicare or any other social program. I have news for you, you voted irresponsibly and now you must pay for your short sightedness. If you think your entitled to steal money from the rich, why don't you just go out and do it yourself. Break in their houses take whats "yours". I know you would rather send the government in to do your dirty work, that's why your a democrat.
David Stockman is the only sane person in this country.
Etaoin say on 7-5-11@1:14pm
"The connection between the Civil War and our current politics is closer than the guest thinks (and the caller who raised the issue believes). Note the rhetoric of the Republicans: State’s Rights, Secession, Traditional (or Biblical) Values. You can find all of that rhetoric in the Confederacy. And note, most of this is coming from Republicans in the former Confederate States (Rick Perry of Texas for example).
Truly, “the South has risen again”, and is trying to accomplish in the 21st Century what it failed to do in the 19th: destroy the United States of America. Lincoln must be spinning in his grave"
No Etaoin, the south and Rick Perry are not the only entities that wanted to sucede. Do you remember a couple of years ago that a Vermont border town wanted to sucede to NH because taxes in Vermont are outrageous?