Another Bad Bargain

Radicals

Jay Ackroyd, Eschaton

Tuesday, July 30, 2013

The Village and the Democratic leadership really is embarked on a radical restructuring campaign, to gut the social insurance programs, lower wage rates and establish long-term partnerships between powerful private interests and powerful public sector agencies.

Doing this is really unpopular, and so can’t be brought directly to a vote–hence the Gangs, and the Commissions, the classified trade talks, and the terrifying debt crises and, sadly, the 60 vote Senate. None of this has worked so far.

But that doesn’t mean they won’t keep trying.

Zombie rising

by digby, Hullabaloo

Monday, July 29, 2013

Apparently, no matter how low the deficit goes or how much the president publicly repudiates the deficit framework,  the White House is still offering what it offered back when the deficit was widely considered the greatest threat the world has ever known:

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The president admitted in his NY Times interview that the deficit “framework” has been “damaging” and perhaps he finally believes that. But that means he must really believe that the elderly are living high on the hog on their Social Security and need to be forced to shop a little more smartly. How else to explain why they continue to offer this deal?

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The Villagers are far from willing to give up their favorite stale tropes. They never are. Remember, there was a time not long ago when the deficit was gone and we had a projected surplus. They still fretted about the old people stealing the food out of baby’s mouths.

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(T)he wealthy celebrities and aristocrats of the Village will never stop fear mongering that these programs are going to swallow up everything.  If the president is on the same page then he could very well have been saying in his interview that “austerity” is damaging while still believing we need to destroy these programs in order to save them. This belief is not a policy in Washington DC — it’s a religion.

Anti-Tax Republicans Once Again May Save Social Security

By: Jon Walker, Firedog Lake

Tuesday July 30, 2013 7:02 am

Despite a half dozen failed tries to get a grand bargain, President Obama is still working hard at a new attempt. Fortunately, this latest effort seems likely to fail for the same reason as all the others.

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If insanity is trying to do the same thing over expecting different results, than the administration is clinically ill.

Given that there is a fundamental and unbridgeable disagreement on this issue the administration should have moved on to basically anything else, but it has become Obama’s white whale. It is the dangerous obsession which has repeatedly brought needless destruction.

The article goes on to remind everyone that Obama is both open and even eager to cut Social Security benefits as part of a deal. The only thing that has repeatedly saved the program is Republicans refusal to increase taxes.

Is a grand bargain out of reach?

By MANU RAJU and JOHN BRESNAHAN, Politico

7/29/13 7:33 PM EDT

Republicans and the White House both agree on proposals to cut Social Security known as chained CPI, referring to reduced payments to beneficiaries because of how annual cost-of-living adjustments are calculated. And the two sides seem to be on the same page regarding reducing benefits that wealthy seniors now receive from entitlement programs, a proposal known as means testing.

But the White House wants new taxes in exchange for those entitlement cuts, something at which the GOP continues to balk. And Republicans have pushed for the two sides to agree on going beyond the typical 10-year budget projections and instead examine how much the budget picture will worsen over the next 30 years. But the White House is resisting a 30-year budget projection, believing the numbers are unrealistic.

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Even if the group reaches a deal with the White House, it’s hardly clear new taxes could win over any additional Republicans – in the House and Senate. And a White House offer on entitlements would turn off scores of Democrats who have vowed to protect the social safety net programs.

Without a grand bargain, to cut deficits by about $4 trillion over the next decade, Congress and the White House may instead simply try to find a way to prevent the government from shutting down in October. But the House GOP and the Senate Democrats remain tens of billions of dollars apart. And as Republicans are demanding fresh spending cuts in order to increase the debt ceiling, the White House and Senate Democrats say they will only pass a debt ceiling increase with no strings attached.

Obama proposal would cut corporate taxes, boost spending

By Jonathan Easley and Justin Sink, The Hill

07/30/13 02:19 PM ET

Obama’s plan would cut the corporate tax rate from 35 percent to 28 percent, with a preferred rate of 25 percent for manufacturers. It would also allow small businesses to write off $1 million in investments.

Obama also wants Congress to sign off on new infrastructure spending, aid to community colleges, and investment in manufacturing hubs. The White House did not say how much Obama wants to spend.

To pay for the infrastructure investments and other spending, Obama proposed that companies be able to repatriate foreign earnings back to the U.S. subject to a one-time “transition fee.”

Obama Offers to Cut Corporate Tax Rate as Part of Jobs Deal

By MARK LANDLER and JACKIE CALMES, The New York Times

Published: July 30, 2013

The terms of Mr. Obama’s tax plan are those that Timothy F. Geithner, his former Treasury secretary, first proposed in early 2012, as the presidential campaign was getting under way: the corporate tax rate would be reduced to 28 percent, from 35 percent, with a lower rate of 25 percent for manufacturers.

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For two years, Republicans have rejected the bulk of Mr. Obama’s initiatives to create jobs by investing in public-works projects, higher education, advanced manufacturing and scientific research. A big reason was that he previously has paired those ideas – to offset the spending and avoid adding to annual budget deficits – with proposals to repeal or reduce tax breaks for wealthy individuals and corporations, especially oil companies, that Republicans reject.

Obama Proposes ‘Grand Bargain’ for Jobs

By THE ASSOCIATED PRESS

Published: July 30, 2013 at 11:52 AM ET

The president has previously insisted such business tax reform be coupled with an individual tax overhaul. His new offer drops that demand and calls only for lowering the corporate rate from 35 percent to 28 percent, with an even lower effective tax rate of 25 percent for manufacturers.

Obama wants those rate changes to be coupled with significant spending on some sort of job creation program, such as manufacturing, infrastructure or community colleges.

Congressional Republicans have also long insisted on tying corporate and individual tax reform so that small business owners who use the individual tax code would be offered cuts along with large corporations. But they oppose using the revenue generated from changes in the corporate tax structure for government spending programs.

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Senior administration officials described the corporate tax proposal as the first new economic idea Obama plans to offer in the coming months, with budget deadlines looming in the fall. Administration officials wouldn’t put a price tag on the proposal or say how much would be a “significant” investment in jobs since the dollar figures would be part of negotiations with Congress. But in an example from this year’s State of the Union address, Obama proposed $50 billion to put Americans to work repairing roads and bridges and other construction jobs.

Obama Urges Business Tax Rewrite to Help Spur New Jobs

By Julianna Goldman, Bloomberg News

Jul 30, 2013 2:15 PM ET

Under the proposal, Obama would seek a business tax change that produces a one-time revenue gain, and that would be earmarked for the repair of roads and bridges or other public works, innovation centers for manufacturing and community college training to close skill gaps.

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“It represents an unmistakable signal that the president has backed away from his campaign-era promise to corporate America that tax reform would be revenue-neutral to them,” said Senator Mitch McConnell of Kentucky, the Republican leader.

The jobs-related programs would be funded by a one-time transition fee associated with the $2 trillion in foreign earnings that are currently held overseas, said an administration official who asked not to be identified to discuss details before the speech.

The officials declined to specify how much money would be generated and didn’t detail how it would be structured.

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Obama, in February 2012, proposed reducing the top corporate rate for most companies to 28 percent from 35 percent. The plan would eliminate tax breaks and change core tax-code features such as interest deductibility. He’s also proposed lowering the rate for manufacturers to 25 percent and expanding and making permanent the research-and-development tax credit.

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The idea of taxing approximately $2 trillion in accumulated overseas earnings as a transition to a new system resembles a proposal from Representative Dave Camp, chairman of the House Ways and Means Committee. Spending the proceeds on jobs programs, though, may run counter to the Michigan Republican’s goal of a revenue-neutral approach.

Camp’s 2011 draft would require companies to pay 5.25 percent on all offshore funds, regardless of whether they are brought home. He plans to include that in legislation he wants to move through his committee this year.

Under the current tax system, U.S.-based companies must pay the U.S. rate of 35 percent on all the income they earn around the world. They get tax credits for payments to foreign governments and don’t owe the U.S. unless they bring the profits home. Companies such as Caterpillar Inc. and United Technologies Corp. have called for the U.S. to switch to a so-called territorial system that wouldn’t tax most future offshore earnings.

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Even as the economy continues to expand and add jobs four years into the nation’s recovery from its worst recession since the Great Depression, Americans at the middle of economic ladder haven’t regained lost prosperity.

The economy grew at a 1.8 percent rate during the first three months of the year, more slowly than its 2.5 percent average pace during the last two decades. The unemployment rate, at 7.6 percent in June, remains above its 6 percent average over the past 20 years.

While the benchmark Standard & Poor’s 500 stock index is up more than 18 percent this year and has almost doubled since Obama took office in 2009, the median household income of $51,500 in May is 5 percent lower than in June 2009, the official end of the recession, according to estimates by Sentier Research.

President Obama’s ‘grand bargain’ for the middle-class

By Jamelle Bouie, Washington Post

Published: July 30 at 11:04 am

The details of the proposal are straightforward: For Republicans, he offers a cut to corporate income taxes, from 35 percent to 28 percent, along with fewer loopholes and a preferred rate for manufacturers. And to gain Democratic support, he includes a series of projects meant to “invest” in the middle-class and boost the economy.

While it’s hard to say how much ordinary Americans would gain from the proposal if it were to become law, what is apparent is the extent to which this “grand bargain” is a boon for business, which wants tax cuts and new investments in infrastructure (which makes it easier to conduct business). Indeed, if Amazon is any indication, the kinds of jobs that might come out of this “better bargain for the middle class” aren’t great.