Tax Deal: In VA, Jim Moran big winner, Perriello big loser, deficit hawks big talkers

    190
    12
    SHARE

    by Paul Goldman

    By voting against the tax deal because it added nearly $1 trillion to the skyrocketing national debt, Congressman Jim Moran has to be considered the big winner. It was a principled vote, for the polls show his area, one of the wealthiest in the nation, overwhelming favored the legislation. A cynic might say he knew the bill would pass anyway, and so his vote was actually a matter of political calculation based on internal Capitol Hill politics. There is no way to disprove the latter, but it deserves to be considered a principled vote until proven otherwise. Sooner or later, there is no way to keep saying YES to more red ink, and at the same time say NO to a higher deficit. At some point, a serious fiscal person will have to vote against what is popular in the polls, or vote for what is unpopular. History says it isn’t easy. So give Moran credit, he has put his toe in the water: let’s see if he is willing to go swimming, right now alone.

    In that regard, does anyone doubt Tom Perriello, based on his claim of being a principled politician, would have voted NO but for the fact he is now under consideration for a job at the White House? The most anti-Bushonomics Congressional candidate last year, in Virginia at least, Mr. Perriello and his followers basically mocked others in the state and country who didn’t have his principled “guts.” How does this square with breaking the pledge made to citizens in running and winning in 2008? It doesn’t. This  doesn’t make Tom a bad guy, just human. But it does say he needs to leave the High Horse in the barn in Albemarle County before riding off to political events. Don’t worry Tom, the air down here where us mortals live is safe to breathe, and after awhile, you will find that we aren’t all that bad, not purists for sure, but we still do manage to do a good thing every now and then. Tom makes a good choice for the White House. But not Mt. Rushmore anymore.

     

    As for the deficit hawks, they were reduced to the old crows that use to gather at Ebbets Field in Brooklyn after the Dodgers lost to the Yankees in the World Series, providing the musical backdrop to the cry: “Wait ’til next year.” They say the bad economy left them no choice but to add a $1 trillion to the national debt. But they promise when their medicine works next year, they will be on the front lines in 2011 and 2012 willing take the tough votes required of deficit hawks.

    Baseball wise, the crows in Brooklyn were eventually right, the Dodgers beat the Yankees once. The President’s Deficit Commission, whose proposals were considered very tough, only promised to cut the deficit by a few trillion dollars in the near term. The deficit hawks just raised it by yet another $1 trillion.

    So the question is: When all is said and done, is it not possible the “deficit hawks” just might wind-up trying to take credit for reducing the deficit by the very amount, or nearly so, they just raised it?

    Eventually, the “deficit hawks” will be able to do more than just emulate those Ebbets’ Field crows. But the bigger winners were always at House Ruth Built.        

    • Teddy Goodson

      ends up goosing the economy so that we avoid a double dip recession, then Obama looks like a genius in 2012. On the other hand, if QE2 (and QE3?) plus the enhanced deficit from The Deal end up creating hyper-inflation, the dollar tanks forever, and Social Security goes bye-bye, well, this tax cut exercise has all been in vain. We have to wait to see who really are the longer-term winners, or losers, and the two may exchange places back and forth as time goes on. Please see my earlier analysis on 9 December of The Deal: http://www.bluevirginia.us/dia

    • Jim B

      It seems to me the democrats as whole did all this to themselves by waiting so late to make a deal. The MSM and repug spin machines will give the repugs credit if the economy improves and if it fails it belongs to Obama. The democrats have taken themselves out of the loop so to speak.

    • FreeDem

      Hey Paul, you’re more than welcome to come out to the 5th District of Virginia and get off your own high horse. This tax package includes a significant extension of unemployment benefits, benefits needed by people in places like Martinsville. It’s fine for Moran to vote against the package when he knows folks in Arlington don’t have to worry about finding a job.  

    • on a key amendment to raise the estate tax rate and lower the threshold. I give him a huge amount of credit for that, especially since three Virginia House Democrats – Boucher, Connolly, Nye – all voted the wrong way.

      As for Tom being a “high horse,” I can’t disagree with you more on this one, Paul.  Remember, Tom is a person who has spent much of his life fighting, often at great personal risk, for justice and against some really bad actors in the world. Tom is also one of the most humble politicians I’ve ever met, and no that’s not a backhanded compliment. 🙂  Seriously, though, it’s pretty hard to argue that a Congressman willing to hold dozens (hundreds?) of townhall meetings, many of which went on for hours – and featured angry constituents venting at Tom – is on any kind of “horse” – low, medium, or high. I hope you’ll reconsider your view of Tom, because it’s simply not true.

    • Roland the HTG

      Is there any way to recommend/request that mindless crap like this be taken off the front page of the blog?

    • sallybee

      Not sure why it bothers me, but I’m not sure why folks can’t get it right.

      Secondly, anyone who knows Tom Perriello, knows there is nothing phony about him.

    • Tom

      One commenter referred to the likelihood of a rise in inflation, which automatically means a rise in interest rates. In fact, interest rates are already rising. In the past 3 weeks, mortgage interest rates have already risen in some markets (including NoVa) by more than half a percentage point from the historically low rates. My own Navy Federal Credit Union had to rise the Home Equity Line of credit rate from 3.25% to 3.99% between the time I first spoke with them about refinancing until I was ready to make a decision, which was a period of just a week.

      And I had also considered refinancing my main home mortgage when the interest rate had dropped more than a full percentage point from when I took out the current mortgage in 2003; but at the time I was talking to the NFCU advisor she said the re-financing processing time had reached about 6-7 months so I decided not to pay the large re-financing closing cost (about $7.5K) and now the interest rate is starting to go up fairly rapidly. There are thousands of homes in foreclose, but not enough people are able to secure a loan and with rates now going back up, it will be a long time before the foreclosure home backlog is cleared and home prices begin to reach reasonable levels.

      The above last paragraph may seem to be a bit off topic, but what I’m trying to emphasize is that both inflation and interest rates are now moving upward just like happened in the 1980s when we reached 10% unemployment, 10% inflation rate and 10% interest rate simultaneously. I’m not suggesting that between now and the 2012 election we will see 10% interest rates, but if we have reached just a 5% level the debt service alone (meaning paying only interest, nothing against the 14-trillion dollar principle) will consume nearly 30% of tax revenue. If you think the debt service with a prime rate under 1% is high, think about what programs will have to be cut and how much taxes will have to be raised just to avoid banckruptcy. Quadrupling of the interest payment on the national debt is a recipe for disaster, and adding another one trillion dollar to the national debt for just to avoid a small increase in tax is the classic definition of fiscal irresponsibility. And for what ? Just avoiding continuation of a small tax reduction in the top-tier incremental rate has never caused any business to hire more people or caused anyone to spend more money; most people who have significant debt either have already spent the little bit of money they saved on taxes or will just use it to pay down a small part of their existing debts (usually credit card debts) so there is nothing left of the tax savings that gets pumped back into the economy. This is NOT another stimulus bill, it’s does not provide ADDITIONAL income that they can spend freely as if it were a gift. But when the interest rates go up the higher taxes that will be needed to begin paying down the additional debt will be several times what little people think they are “saving”.

    • cvllelaw

      The one thing that I have noted, in three years of working with and for Tom Perriello, is that there is nothing knee-jerk about him.  And this has sometimes led people to misunderstand his votes.  The knee-jerk Democratic vote on a food safety bill was to vote for it; what self-respecting Democrat isn’t for food safety?  Tom voted “no” because it did not adequately take care of small farmers, like those in the 5th District.  He got marked down on some liberal/progressive ratings because of it, though his reasoning was at least as “liberal” or “progressive” as those on the other side.

      I haven’t talked with Tom on this one, but the “liberal” or “progressive” argument here is by no means monochromatic.  Perfectly reasonable and principled liberals may have voted for the bill because they were not willing to play chicken with millions of unemployment checks.  Tom having represented a lot of people who are getting those checks, it would not surprise me if he thought to himself, “For the past two years, I have fought for the well-being of people at the bottom of the economic ladder in the Fifth District. Am I going to make my last vote on an economic issue a vote to cut them off right before Christmas, with the snow falling and the heating bills coming due?”

      And tell me, Paul Goldman, what would YOU have Tom Perriello say to the unemployed father whose check stopped coming?  “Suck it up, dad, because I stood on principle?”