Compromise In Congress to Avert The Fiscal Cliff
http://thedianerehmshow.org/shows/2013-01-02/compromise-congress-avert-fiscal-cliff
At the very last minute after months of high pitched debate and political wrangling, Congress managed to pass legislation to avert the so-called fiscal cliff. The legislation raises tax rates for high earners, blocks a middle class tax increase but doesn’t begin to address the country’s deficit. At best it’s a stop gap measure: decisions on major spending cuts were postponed for two months and the country’s borrowing limit still needs to be raised. In this hour we talk about the specific compromise provisions Congress came up with, what these may mean for tax payers and the economy, and the immense political and fiscal challenges ahead.
Guests
Norman Ornstein
resident scholar at the American Enterprise Institute and co-author of "It's Even Worse Than It Looks."
Alice Rivlin
senior fellow, Brookings Institution, vice chair, Board of Governors, Federal Reserve System (1996-99); director, White House Office of Management and Budget (1994-96); and founding director, Congressional Budget Office (1975-83).
James Thurber
professor and director of the Center for Congressional and Presidential Studies at American University, and author of "Obama in Office: The First Two Years."
Comments
Please familiarize yourself with our Code of Conduct and Terms of Use before posting your comments.
Government subsidized = the show has "rebroadcasts" for more than a week, what a joke!
More of a joke are the extravagantly paid Members of Congress and Senate who are perpetually taking extended "vacations" to consult with their constituents.
Obama & Dems seem to give up way too much to McConnell and the "country be damned- no compromise” members of the House. To simply pay for Nation's last 12 years of Military Offense, MUCH more revenue is required.
With political capital of recent election and fact that “going over cliff” actually improves bargaining position, Dems should walk away with much better deal.
Playing role of the “adults in the room” doesn’t justify compromising away America’s fiscal future or ignoring recent voice of the electorate.
I thought the approval rating of congress had hit rock bottom but the way this has gone I think it is still getting worse.
The rich did just fine with the bill just passed. And now expect Obama to tell us he did all he could. Sure.
. The estate tax exemption continues at a high dollar figure.
. No closure of loopholes that benefit the rich.
. Will we see the mortgage interest deduction capped - capped not eliminated?
. How about charity? A cap? Or will we see the rich continuing to benefit hen they support their pet organizations. (My current favorite example is the 25 dollar admission to Boston's Museum of Fine Arts - an organization that is a non-profit but staffed by very well-paid individuals!
Now expect to hear about "reform" of Social Security. The "reform" will be a change that will keep blue-collar people working later in life and at reduced benefits while the rich enjoy the fruits of other peoples' labor.
Better would be to eliminate the cap" in wages subject to FICA - the better off would contribute more.
This was only a 60 day fix.... The T-Party/Republicans will be back at destroying our government shortly.... This T-Party dominated House of Reps was the least productive in our Nations history...How many weeks did they spend supporting the Mexican terrorists,while opposing "Fast and Furious"? How many weeks did they spend trying to paint American women as sluts and whores...Pay raise for the NeoNutzi`s clown show?
BOOOO!!!!!!
Clifford wrote:
"The T-Party/Republicans will be back at destroying our government shortly"
Wow! I sure hope you're right, Clifford. Because the liberal/progressive government we have now absolutely sucks!
Bravo ECG bravo! It is amazing how many people think that taxes are the issue and that the most productive citizens somehow don' pay enough taxes.
@pjnuge: Actually, I don't know how many people do think that "the most productive citizens somehow don' pay enough taxes." I know that a lot of people think the wealthiest Americans "don' pay enough taxes," and also think that the rich are not productive citizens.
I'm going to make a statement. As objectively as possible, I must say I think a tax cut (or subsidy) for a poor or middle-class person is better than a tax cut (or subsidy) for a wealthy person. Not only for the obvious moral reasons (about who needs the help), but on an actual economic level, about which will do more good for the economy as a whole. It would sure be nice if money given to the rich would "trickle down," but as it happens they're already sitting on their money, and if they had more they'd just put it in the bank too. In other words, the money would not really be doing any good in the economy. For less well-to-do people, though, they would take that money and spend it. In other words, money given to them would immediately be put back into the economy.
There. I did it. I made a very one-sided political statement. Not sure why I felt moved to do that.
where was all the GOP outrage and concern about spending during the Bush years and the rush to war. I know exactly when this faux outrage occurred Jan 20, 2009 and it is about skin color. GOP awful group of OWM
It's maddening to hear one of the guests say that there are no moderates in Congress. That is completely false. The extremists are on the Right, rigid idealogues that block everything. Being a hard-core Progressive, I can tell you none of the Democrats are left-wing idealogues. Russ Feingold and Teddy Kennedy are dead, so now there are only moderate Democrats or conservative Democrats. Progressive ideas are never, ever discussed seriously.
So far I haven't heard anyone blame voters for the deadlock in Congress. By only voting on very narrow issues, voters are ignoring the greater good.
Last moderate who do you think pays the bills in this country? Not the 47% of the country who pay NO income taxes. It is the most procuctive, top earners who pay the lions ahare as it is. Do you really think a marginal rate of 35% is too low? If you want to talk fairness, how about the 47% who don't pay anything- how faie is that to the rest of us?
Many commentators mention the lack of incentive for the deep-red congressmembers for compromise, since they are from "safe" districts that are ultra-conservative and could face a further-right primary challenge. I would like to hear some discussion of why this is the case, such as the influence of right-wing talk radio, such as Rush Limbaugh, who has millions of listeners and considers himself an "entertainer."
How much good does it do to raise the top bracket from 36 to 39% if so many millionaires are paying 13 or 14%? We need not an end to the AMT but a real AMT: 30% of all income over $450,000 regardless of the source of that income--from dividends, capital gains, or whatever.
Don't be fooled. The organization "Fix the Debt" is nothing but "Elect the Republicicans". If they wanted to fix the debt, they wouldn't push tax cuts. It's not about the debt, it's about reducing the effectiveness of a Democratic President. Watch their funding evaporate when a Republicican gets elected.
http://www.nytimes.com/2012/12/31/opinion/krugman-brewing-up-confusion.h...
pjnuge, the "47%" pay taxes. They pay federal taxes. They pay income taxes. What they don't pay is federal income taxes, because they are too poor.
Romney only needed to pay 10% on his enormous income (he paid more because he wanted to dupe you in an election year). There's the problem that needed fixing.
Turn off Rush&Fox and get the facts.
Bort- fine, change the tax code, limit charitable and business deductions, fine by me. Romney has still paid millions of dollars to the feds. If you change the tax code, the only fair thing is to make sure all citizens pay into the cost of running their government. And the people who work the hardest and pay the most should be thanked, not penalized by higher tax rates and partisan rhetoric from the preseident.
Thank you, pjnuge. You make some good points, and some bad ones. The 46% (which is more correct than 47%) who do not pay federal income taxes include people who do not have incomes (retirees, unemployed, etc.), and you can't be mad at them for that. Not to mention the glaring fact that most Americans pay more in payroll taxes than income taxes, and most of those 46% who don't pay income taxes do pay payroll taxes. I must say it is very dishonest to try to make a point like that by only mentioning federal income taxes, especially when everybody pays sales taxes anyway. And then there's the property tax... the gas tax... So, when you say "the 47% who don't pay anything," that is something like an outrageous falsification.
That said, it is quite true that the top earners pay the lion's ahare [sic]. That is, of course, separate from their usefulness to the economy. Aside from the money they send to the government, most of their wealth is not "procuctive". (Okay, I'm sorry. I'll stop pointing out your typos. But seriously, you might want to invest more time in watching your spelling. :))
No, I don't think a marginal rate of 35% is too low. Not at all. I think a capital gains rate of 15% is too low. I think the tax code permits the wealthy to pay much less than 35% (e.g., quarter-billionaire Mitt Romney pays 13 or 14%, if we assume that the tax records he kept secret were similar to those he was willing to release.) But I have not said anything about my believing the rich pay too little. I have only said that "I know that a lot of people think" so.
But the only contentious statement I might have made in my last comment, you do not appear to argue with. So, for that, thanks.
kfree33 wrote:
"now there are only moderate Democrats or conservative Democrats."
That's pretty funny.
Nancy Pelosi
Jerrold Nadler
Donna Edwards
Mike Capuano
Dennis Kucinich
Maxine Waters
Rob Andrews
Sheila Jackson Lee
Barbara Lee
Raul Grijlava
Ed Pastor
Karen Bass
Bernie Sanders
...
Should I go on?
pjnuge wrote:
Bort- fine, change the tax code, limit charitable and business deductions, fine by me. Romney has still paid millions of dollars to the feds. If you change the tax code, the only fair thing is to make sure all citizens pay into the cost of running their government. And the people who work the hardest and pay the most should be thanked, not penalized by higher tax rates and partisan rhetoric from the preseident.
I'm sorry, but I'm stil going to disagree with you. The people who pay the most do not work the hardest. That is quite patently ridiculous. They pay the most because they have the most. And nobody's penalizing them. Their higher tax rates are not because of some wish to punish them for being well-off, but simply a small part of an attempt to lessen the federal deficit. And let me ask you this: if this was an attempt to penalize them, why would anybody bother to advocate for a tax raise so easy for them to pay?
Bort wrote:
"If they wanted to fix the debt, they wouldn't push tax cuts. "
Absolutely false. Every time taxes have been cut (under Reagan and Bush), revenues to the government INCREASE. That is an undeniable fact.
And, "Moderate", a simple principle is, "when you tax something more, you get less of it". If you want less investment (which generates cap gains), raise taxes on it and you will succeed. That is "productive" income whether you want to admit it or not. If you want to improve the economy with taxes, tax the H*** out of government bonds. That will force people to invest in things besides government which is CLEARLY not productive. As for taxes on the 46/47%, EVERYONE should contribute something. Having to pay taxes hightens awareness of how the money you contribute is spent like nothing else can do. If you're not paying, why the h*** do you care how much is wasted? The payroll tax DOES NOT COUNT. It goes into SS/MC. Everyone should pay something into the cost of running the actual government, including those retirees who also use government services.
This is a MORAL issue and should be a matter of personal pride with every citizen. Getting something for nothing did not make this country great - and now it is bringing it to its knees.
Last Moderate- my typos exist because I have a job and a limited time to write/proofread.
Payroll taxes are by and large meant to go the own persons future needs (ie Social Security is an imposed annuity plan) not meant to go to the running of the government, so that argument is bogus.
I know a number of retired people , they all have income (SS).
So how much is too much in your world for marginal rates, taking into account Medicare, state, and local taxes. Is it ok for the governments to confiscate over half of ones earnings?
The Last Moderate wrote:
"I must say I think a tax cut (or subsidy) for a poor or middle-class person is better than a tax cut (or subsidy) for a wealthy person. Not only for the obvious moral reasons (about who needs the help)"
Except, it's not the government's job to "even the score". Sorry. The government's job is to build infrastructure and keep us safe, not to redistribute income.
" but on an actual economic level, about which will do more good for the economy as a whole. It would sure be nice if money given to the rich would "trickle down," "
And it does. The money of the "rich" (read: successful) does not sit "in the bank". It gets invested in the economy. "Trickle down" is a fact of life. Money either "trickles down" from investment or from the government - and the former is a far more efficient way of doing it.
ecgberht wrote:
kfree33 wrote:
"now there are only moderate Democrats or conservative Democrats."
That's pretty funny.
Nancy Pelosi
Jerrold Nadler
Donna Edwards
Mike Capuano
Dennis Kucinich
Maxine Waters
Rob Andrews
Sheila Jackson Lee
Barbara Lee
Raul Grijlava
Ed Pastor
Karen Bass
Bernie Sanders
...
Should I go on?
Yes, you should! How'd you miss Elizabeth Warren? :)
And I'll add to kfree33 that if any conservative Democrats are left, they are a critically endangered species, soon to become extinct like liberal Republicans. It's called hyperpolarization. A fun big word, no? (Though not any fun to see in reality.)
@ pjnuge: Those who pay no income taxes (not 47%, but rather 38%) DO pay federal taxes...namely payroll taxes to support social security and medicare, and federal excise taxes, e.g., gasoline tax. And those people, the majority of whom make less that $20K/year, pay a higher percentage of their income to those taxes than do those who you think are the only ones who "pay the bills".
ecgberht wrote:
"Moderate", a simple principle is, "when you tax something more, you get less of it". If you want less investment (which generates cap gains), raise taxes on it and you will succeed. That is "productive" income whether you want to admit it or not. If you want to improve the economy with taxes, tax the H*** out of government bonds. That will force people to invest in things besides government which is CLEARLY not productive. As for taxes on the 46/47%, EVERYONE should contribute something. Having to pay taxes hightens awareness of how the money you contribute is spent like nothing else can do. If you're not paying, why the h*** do you care how much is wasted? The payroll tax DOES NOT COUNT. It goes into SS/MC. Everyone should pay something into the cost of running the actual government, including those retirees who also use government services.
This is a MORAL issue and should be a matter of personal pride with every citizen. Getting something for nothing did not make this country great - and now it is bringing it to its knees.
Whoa! Whoa! Settle down, pardner.
"when you tax something more, you get less of it" I'm not sure about that. The only case I can think of where they tried that is cigarette taxes, and it seems to have had a minimal effect. If people want something, no small tax increase will stop them. And, especially in the case of rich people, it would take a really huge tax increase to even slow them down. (However, anybody will do less of something to avoid taxes if it is very easy to do something else comparable that is not taxed as much. That might be the law of human behaviour you're thinking of. It is a problem that could be eliminated with a simpler tax code.)
(continued)
(continued)
Our government is quite productive most of the time. For example, it continues to produce quality, durable dollar bills suitable for use around the world. :) It has produced such things as nuclear power, the Interstate, the Internet, none of which it is easy to imagine the world without, and all of which could probably have only come about with the government's work. We also have a federal prison system, by far the most powerful military on Earth, GPS, and an education system for everyone. Dare you imagine an America without any of those?
"EVERYONE should contribute something." Yes. Common ground at last!
"The payroll tax DOES NOT COUNT." Yes it does. It is a form of taxes, it does pay for government services, IT COUNTS.
Retirees have payed taxes in their working lives, and continue (like the excellent citizens they are!) to pay taxes on their property and their purchases.
"Getting something for nothing..." Is that possible? No it isn't. If people thought it was, that likely would bring our country to its knees. However, despite the occasional Madoff dupes and the people who drill and mine on federal land and keep the profits, America remains tall and strong, the greatest nation on the face of the Earth and the light of the world.
"Yes, you should! How'd you miss Elizabeth Warren?"
I thought about her, but then I realized she was Native American and I didn't want to be accused of being xenophobic!
(The preceding was a joke - for anyone here who actually has a sense of humor!)
ecgberht wrote:
The money of the "rich" (read: successful) does not sit "in the bank". It gets invested in the economy.
We all wish. Sadly, like most people, the wealthiest are cautious about spending. The difference is that, unlike less well-off folks, they have the option of simply sitting on billions of dollars, keeping the money from being active in the economy, and unfortunately that is genuinely what they do.
This is grossly cliche, but: The facts are on my side.