Congressional Debate Over Extending the Payroll Tax Cut
http://thedianerehmshow.org/shows/2011-12-07/congressional-debate-over-extending-payroll-tax-cut
In a speech in Osawatomie, Kansas yesterday President Obama threw down a populist gaunlet: at issue Republican opposition to extending a payroll tax cut set to expire at the end of this year. The decision to extend the cut is, in the President’s words: “a make or break moment for the middle class”. Many Republicans support extending the cut, but they disagree with Democrats over how to pay for it. Senate Minority Leader Mitch McConnell has rejected the latest Democratic proposal suggesting a swift compromise on the issue is not likely: Join us to discuss political and economic stakes in the debate over extending payroll tax cut.
Guests
Isabel Sawhill
senior fellow, Economic Studies, The Brookings Institution.
Chris Edwards
director, Tax Policy Studies,
and editor,www.DownsizingGovernment.org
Cato Institute
Naftali Bendavid
national correspondent, The Wall Street Journal.
David Stockman
former Congressman from Michigan, R
budget director during the Reagan administration
Comments
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The democratic controlled senate has not produced a budget in what four years! The president is doing everything in his power to bait republicans with his class warfare games. The committee appointed By Obama to come to grips with federal spending was forgotten faster than it was formed. Who's playing who? the chumps in all this is the American tax payer. Obama only has one goal in mind, reelection to foster the seeds of socialism he planted.
What we have in all this is total lack of leadership from Obama. Obama's National Commission on Fiscal Responsibility and Reform was nothing more than the empty fulfillment of one of many campaign lies foisted upon the American people. Obama had within his reach to do some real good for the country, but all we got was a stupid useless health-care reform bill that he squandered his first two years in office enacting. He was more concerned to compare himself with FDR and LBJ for vanity reasons. Our president is a total loser in every respect, a shell of a man who never accomplished anything other than get elected.
The entire global financial system is based on the equivalent of a perpetual motion machine…. money can be borrowed or leveraged into existence in essentially unlimited quantities, and then deployed in risk-free skimming operations to harvest unlimited wealth.
Our economy and all the economies of the world are a falsehood based on nothing. Money is meaningless.
We should just print more and give everyone a tax holiday. Deficits don’t matter….they are only a political "convenience" tool. The only people who fear inflation are the wealthy because…in inflation the money they have is actually devalued.
Forget about this little tax holiday gimmick.
Corporate America is sitting on top of the solution to the nation's employment crisis. America's largest banks and non-financial companies are sitting on $3.6 trillion in cash which they're hoarding. If this were moved it into productive investments about 19 million jobs would be created in the next three years, lowering the unemployment rate to under 5 percent. About as good as it gets in the disease called Capitalism. That would create the Capitalist equivalent of “ a job in every pot!”
The nation is confronting massive unemployment, and the biggest companies in this country have been hoarding cash. Banks have been able to borrow the money essentially for free from the Federal Reserve. Banks have about 80 times the $20 billion they held in 2007. Meanwhile, non-financial companies are keeping their profits liquid, rather than plowing them back into investments, to the tune of about $2 trillion. All told this amounts to almost a quarter of the U.S. gross domestic product.
This is why Capitalism is a joke. We must protect the fragile job creators remember….
Meanwhile, small businesses are having a hard time getting anyone to lend them money. If Capitalists want the system to actually work (and they don’t) the money should be channeled toward "small businesses that face larger than normal credit constraints….more labor intensive businesses…. businesses that generate large “social as well as private” benefits. Oh man we couldn’t have social benefits!
Might these be the real “Job Creators”?
Pay no attention to those gray suited men behind the curtain, move along….move along!
It does seem like since there are about 130 million Americans still in the workforce, that if each had to begin paying on average $800 more a year that there would be a noticeable dip in disposable income. $800 is about one twentieth of take home pay for the bulk of workers because median gross income is only around 30K. And because our domestic economy is 70%+ maintained by consumer spending there would be a significant effect that would cripple and close many small businesses and a few large retailers already on the edge. Job losses would result compounding the downturn. Terminated unemployment benefits for medium longterm unemployed would have a smaller but similar effect. So it is easy to see why those with faith in the present economic system would logically want to extend the payroll tax reduction and even extend unemployment checks.
Surely we need reform of both the tax system and the welfare maintenance system. Nearly a quarter of children live in poverty, and another quarter in near poverty. More than 50 million Americans suffer in abject poverty. Because this is a structural problem most of these are pretty normal except for having no income. Clearly those who benefit most from this maladjusted economy need to pay more, but that would not fix things in the long run. We desperately need a transaction tax on financial trades. We should provide earning opportunities for all who can work.
How can it be claimed that this form of corporate capitalism is a success when it hurts so many to benefit so few? We are going to be forced by circumstances to set property ownership and income limits so we might as well begin discussing it. We can see climate change and fossil fuel extraction devastation gaining on us like a tidal wave but many people are so deluded they are trying to buy surf boards. (Going for the jackpot even as the casino roof falls in on them)
So yes, extend these little benefits, but prepare for restructuring. Limiting suffering is a good thing.
Monte:
I am hopeful that you have the mental capacity to understand that a “democratically controlled Senate” means next to nothing because of the recent rampant unprecedented overabuse of the filibuster rule by the GOP. It takes a 61 seat majority to even allow discussion of a proposal or bill.
The "compromise" offered by GOP of recent superduper committee included permanently extending the W tax cuts.
This is akin to saying “yes we agree to lower the debt & deficit as soon as you allow us to raise it a whole lot more in order to please those that are financing our reelection campaigns”.
The biggest “chumps” in this game are mostly those Americans whose vision is so clouded by their Fox “New” perspective that they refuse to allow a sliver of reality in.
Pancake Rankin wrote:
"How can it be claimed that this form of corporate capitalism is a success when it hurts so many to benefit so few?"
Considering American capitalism has given all of it's people the highest standard of living ever seen in the history of the world. I don't think it could be called a failure by any measure.
Personal responsibility has much to do with poverty levels, half of American families are single parent which almost guaranties poverty. The U.S. has lost it's moral compass.
Drew:
I am hopeful that you have the mental capacity to understand how to manage an unexpected household expense.
If you have a vacation planned and your car loses its transmission, you prioritize your need for the automobile over the vacation. As such, you either cancel or trim back the vacation plan and fund the repair to the automobile. It is possible to throw caution to the winds, conclude that you deserve the vacation, and just put the whole thing on the family credit card. However, I am hopeful that you have the mental capacity to understand that this is unwise and utterly irresponsible.
The solution of funding the payroll tax holiday by additional revenue is the latter sort of reasoning. Presuming that you hold some measure of concern for your children and future generations, you cannot simply throw it on the national credit card. The proposed revenue off-sets are nothing more than election year politics, designed to garner favor with those intent upon punishing those that have what they want - simply stated, economic jealousy.
Lots of blah, blah, blah about middle class tax cuts not doing anything while tax cuts on the wealthy do do something, even though there is no anecdotal evidence of this for the last ten years.
Anyway, how can you argue against a ten year tax increase of $1.2 trillion which won't even pay for the wars and Medicare Part D. So much for the arguement that taxes shouldn't be raised and we shouldn't be passing debt on to our children.
Drew Kelly wrote:
Monte:
"I am hopeful that you have the mental capacity to understand that a “democratically controlled Senate” means next to nothing because of the recent rampant unprecedented overabuse of the filibuster rule by the GOP. It takes a 61 seat majority to even allow discussion of a proposal or bill."
So this is legitimate reason for the democrats not to do their job and write a budget, I think not.
Number 1....If you want to "separate the political drama from the economic reality"....don't invite anyone from the Cato Institute into the discussion. Period
Disregard Chris Edwards, everyone knows the CATO Institute is a Koch Brothers funded joke.
This is not a balanced panel. Only one and a half sensible people, ie, Isabel Sawhill is sensible and reasonable, the half being the guy from the WSJ. The others are political spokesmen for the GOP. I am switching to CSPAN now.
So would the extension of the payroll tax cut be for companies that clear under a certain amount in profits. Seems crazy to give Wal Mart making billions a pay roll tax cut
I see Personal Responsibility being flogged again....
Human relationships within capitalism are organized similarly to those within feudalism, with very few distinctions. Capitalism’s wage labor creates a huge class of indentured servants, who must sell their time and lives for survival. And yet workers in the American capitalist system believe themselves to be free and utter mindless jingoisms like “freedom, liberty, fairness and legitimacy”. Phrases such as “personal responsibility” are often espoused by those suffering forty-hour workweeks of stultifying labor, and systematic exploitation through their role as a consumer. And yet they pass judgment on a class of people which they, are only one paycheck away from becoming themselves.
Last year the payroll tax cut was justified as a stimulus package. The majority of Americans used the previous stimulus checks to pay down debts instead of spending the $ to "help the economy".
The rationale was we wouldn't notice the $30 jump in our bi-weekly paychecks, and therefore spend more.
Now it's become "don't let this expire or we're raising taxes!"
It was a stimulus. Let it expire. I usually support Populist policies, but this is a bad call.
Kathleen:
The latest proposal offers the holiday to the employees, but not the employers. All employers will still be on the hook for their half of payroll taxes.
WAMU demeans itself by giving rabid right people from the Cato Institute a platform to air their misinformation.
Who would know if self-employed people pay the tax just discussed? Self-employed people who actually pay their own taxes or people talking about it who are not self-employed?
Who on this panel actually supports middle class people? Cato, Brookings, and Wall Street Journal? Where are the left leaning think tanks or journalists? Usually Diane Rehm is more balanced than this. Why are we arguing over takng away $ 1000 or so from middle class people who it will make or break, and not considering getting rid of the tax cuts on the ultra rich? I keep hearing from my Senator Mcconnell that it Is because the ultra rich are the job creators. What jobs have they created? I don't see any.
"everyone knows the CATO Institute is a Koch Brothers funded joke."
This level of stupidity may play well with the radical left, but it does nothing to advance a sensible argument.
The tax break for the wealthy has done no good either... where are the jobs from the "job makers" now? Republicans say we can't take away their tax breaks because they are the job creators but they haven't done that - they are sitting on their billions of dollars while the middle class disintegrates.
The truth of the matter is for every day that the congress wastes not doing its job, we the people, ought to insist that they not receive compensation for the wasted time.
Why is it that repubs always want to cut the benefits to people who have little to nothing to survive?
How many of the people that we should not tax are actually creating jobs as we speak? How many of those people have exported more jobs than they have created here in the U. S.?
You cannot have it both ways, you can't tax those who are hoarding the money, buy you want to starve the poorest Americans. Oh, by the way, this is, by repubs own words, a CHRISTIAN nation and christians don't let the poor struggle. And, they don't allow them to be exploited by the rich.
We are self employed and do NOT get the payroll tax cut. We have always paid the entire 15%.
Thank you David Stockman you just said what I believe in my heart. Let us all pay more to get out of debt and start spending wisely....like not going to war preemptively
Is it possible for any major news outlet to have a discussion that is not tilted to the right? How about someone to the left of neocons who are so prominently featured. Let's hear from someone who is not actually part of the 1%.
For Jobs? Really. Then why has this show and all NPR refused to talk about National Hiring Day the grass roots, one year old, jobs idea that doesn't need the government at all. NPR and shows like this have become part of the problem by refusing to talk about the solutions that are out there like National Hiring Day
Readers, do you want jobs, then make the media talk about National Hiring Day the jobs fair for the country. Let's stop the political bickering and get jobs for people in a way that would hurt no one and help all.
There is a solution to the jobs problem and it could quickly put hundreds of thousands of people back to work. It is not pro left or right. It is not from any corporation, it's outside the government control, it's totally voluntary, works in about one week, and helps all with little sacrifice from anyone.
National Hiring Day (country wide jobs fair) - This is a day that corporations are encouraged to hire new employees. Corporations are called on to put patriotism first and help their country in
hard times. Those corporations that cannot hire, are asked to stop firing for that month.
Thank you David Stockman for talking some sense!
Karen Ann great points. MSNBC ED keeps pointing this out also. Where are the jobs? Where were the alleged rich job creators duing the tax cut hoe down during the Bush administration.
WHERE ARE THOSE JOBS
Self employed people also pay the 15% on their income before deducting any medical insurance premium deductions or medical expenses as well as any IRA deductions. We never hear anyone talk about that.
When a person works for a company the medical items are benefits, which are in addition to their salaries, and are not taxed at all. The IRA is known as deferred compensation for the government employees, and is not taxed.