God, I wish Mark Warner were up for re-election this year. When the time comes, primary the man. Somebody, please. Come to think of it, though, as we learned in Virginia previously, North Carolina this past year, and in South Carolina this week, voters can be as stupid as hell, voting against their interests over and over. Early polls show Virginia voters may be poised to redefine stupid ever more downward. How else can one explain that some voters actually think Kookinelli preferable in the VA governor's race or that Mark Warner is actually on their side? There is simply no Democrat more in the pocket of austerity emperor Peter Peterson. You recall, this buddy of the Koch brothers and 20th/21st Century co-conspirators against the American people for decades, is also co-architect of a plutocracy organized to enrich the 1% (and squash the rest like bugs). And it is time everyone understand what that means.
The discredited austerity emperors have been shown to have no clothes. The economic data since the 1980s show trickle down voodoo "economics" does not work. (So now the House GOP is considering legislation to end the collection of economic data so we cannot know the truth.) Similarly, the "research" supporting austerity does not exist. The infamous (Peterson-linked) Harvard duo just made the shit up and dropped data inconvenient to their preordained results. Ooops. But Mark Warner persists. (More commentary and the text of his remarks follows.)
Emerging like a cicada from whatever hole he's been hiding in, Ken Cuccinelli this morning announced what he calls his "jobs plan for Virginia". Instead, based on the Washington Post's summary, it looks like Cuccinelli's plan would simply do what Republicans love doing the most: rewarding wealthy individuals and corporations with huge tax cuts, while blowing a massive hole in the budget and saddling the rest of us with the bill. Specifically, Cuccinelli "calls for cutting the corporate income tax rate from 6 percent to 4 percent over four years, and reducing the individual income tax rate from 5.75 percent to 5 percent over that period." The result: "those cuts would cost state government about $1.4 billion a year."
How would Cuccinelli recoup that $1.4 billion a year it? He claims he'll do it by eliminating "tax exemptions and loopholes," but far more likely is that he'll have to do one or more of the following: 1) slash education spending; 2) slash spending on health care; 3) raise taxes on the working and middle classes; 4) screw Virginia's localities; and/or 5) destroy Virginia's AAA bond rating. Unless, of course, you believe that there really are $1.4 billion a year in "tax exemptions and loopholes" that realistically could be cut. And if you believe that one...
Also, see the following statement from the McAuliffe for Governor campaign, which sums it up nicely:
While Ken Cuccinelli has focused his career on divisive social issues like restricting women's health, his new foray into economic issues shows that he puts ideology ahead of sound fiscal management in Virginia. Cuccinelli's proposal would lead to a budget crisis that could undermine education, force localities to dramatically raise property taxes, and threaten the Commonwealth's bond rating. Under Governors Warner, Kaine and McDonnell, Virginia has maintained its reputation as a well-managed state but Cuccinelli's unrealistic and ideological plan would undermine that tradition. Virginians know there is no such thing as a free lunch.
Equally unrealistic is Cuccinelli's bizarre attempt to claim that he supported the recent work of Governor McDonnell. Cuccinelli's attempts to claim credit for McDonnell's signature transportation compromise have been mocked in the past since it is well-documented Cuccinelli was one of the extremists who tried to derail the bipartisan plan.
Terry McAuliffe has proposed realistic, mainstream solutions to make Virginia the best for business including responsible local tax reform, strengthening workforce training, streamlining economic development and diversifying Virginia's economy. While Cuccinelli tried to stop Governor McDonnell's transportation plan at each and every step, Terry was proud to encourage passage of the bipartisan compromise that will reduce gridlock and improve competitiveness.
You have heard at least a part of this story, but there is so much more beneath the surface. With their supposedly seminal 2011 work, "Growth in the Time of Debt," Carmen Reinhart and Kenneth Rogoff were gurus to austerity hawks. Reinhart was, according to the NY Times, "the most influential female economist in the world." Indeed Paul Ryan lapped up the faux austerity "results." The same authors had burst onto the international stage in 2010 when they "found' grounds for austerity in another study.
"The authors purported to show that once county's gross debt to GDP ration crosses the threshold of 90%, economic growth slows dramatically," according to an Alternet article.
It turns out that that was a crock. Influential, you see, is not the same as correct. Another research team couldn't replicate the original authors' findings. So it requested the raw data.
Wonder why the President doesn't give a damn about his base, the folks who worked to put him in office?Yeah,it is because of Citizens United. Yeah, it's his personal flaw that he would sell us out to Wall Street and Big Oil, who are behind all the deficit Chicken Little. And Yeah, he is the worst negotiator ever. Of course that is assuming that he ever cared about ordinary Americans at all. And it bears mentioning he has given far less attention to creating jobs than creating austerity, or anti-jobs. He can't have it both ways.
So, he offers up massive "deficit reduction" after previously offering up trillions (2.6 trillion to be specific). He knows this will be recessionary, but he doesn't care. And then there are the cost-of-living adjustments (COLAs). They will affect each and every one of us over time. And they have an escalating effect on other things, such as tax brackets, as ElaineinRoanoke illustrated in her otherwise excellent diary today. Frankly, I do not understand the sanguine reaction expressed in that post. Here is a more appropriate reaction, imho. The cuts will eventually cause significant harm to most Americans. And the harm ought not to be shrugged off. We should be speaking out, loudly! We should be organizing! We should be on the mall in Washington. If only we could primary the president...Not that it would matter.
Primaries matter, of course, but even those of us who worked for him and donated something have little power. We have zero actually. 132 people pretty much run our political universe. As Lawrence Lessig illustrated in his Lesterland TED Talk, the US is Lesterland. The Lesters are the .05 percent (.05 percent, not 5 percent, of Americans). There are 144,000 Lesters in America's Lesterland. They gave the maximum personal contribution. They could afford thousands. BTW, only .25 percent of Americans give $200 or more to presidential campaigns. Guess who's never going to do that again?
[Read about the real purse strings below the fold.]
Just as Terry McAulliffe and even the President dutifully and publicly filled out their NCAA March Madness brackets, there was NPR telling listeners yesterday that it is all for naught. After all, any individual's chances of getting the brackets right is 9 quintillion to one for the 64 teams, which is way, way worse odds than the chance of getting struck by lightening. Getting it right is just too random to waste your time on "bracketology." It is a useless enterprise. But (almost) everyone does it. The widespread perception that one can actually get the entire March Madness brackets right is based on a misunderstanding of statistics, probabilities, and (yes) reason. But then we all misperceive probabilities, even those who know better. Regardless, all manner of sportscasters, celebrities and just plain folks occupy their time dutifully filling out their brackets.
So, I have to ask, is this useless enterprise more important than, say, defending seniors, kids and more against Paul Ryan (don't look now but an even worse version of his budget just passed the House today)? And do not citizens everywhere make better use of their time writing to the President and telling him to not throw us all (seniors, kids, workers, the sick, the poor, and more) under the bus or on "the table"? Wouldn't it be a better use of time to call Nancy Pelosi and tell her to stop caving before the negotiations even take place? The odds would be vastly better than 9 quintillion to one if every single citizen who cares got on the phone and on the email system of Congress. You can even do it while you watch!!!!!! Why, if every Democrat told their representatives her or she will withhold support if they don't stop the caving to the 1%, imagine how things might change!
See below for Rep. Jim Moran's statement on House passage - on totally partisan lines - of Paul Ryan's "ideological" budget that benefits the wealthy and screws the rest of us big time. Guess which Virginia Congresscritters voted for this monstrosity? That's right: Can'tor, Goodlatte, Griffith, Hurt, Rigell, Wittman, Wolf. The usual suspects, in other words. Get these guys outta here!
Congressman Jim Moran, Northern Virginia Democrat, released the following statement on H.Con.Res. 25, the Republican Fiscal Year 2014 Budget Resolution introduced by Congressman Paul Ryan (R-WI). The budget passed the House of Representatives by a vote of 221-207.
The budget proposed by the Republican majority today is an ideological document that lays out a path to prosperity for only the wealthiest Americans, while undermining our recovery and long term economic strength through deep cuts to investments in our infrastructure, education, and research.
The American public resoundingly rejected Paul Ryan's ideological budget when he introduced roughly the same document last year. It would cost two million jobs next year alone, and includes more than $5 trillion in tax cuts and giveaways to the wealthiest Americans.
The Ryan Budget devastates the federal government's ability to invest in our nation's future by drastically cutting social safety net programs. According to the Center on Budget and Policy Priorities, 66 percent of its $5 trillion in non-defense budget cuts over ten years come from programs that serve low and moderate income Americans.
By contrast, the Democratic proposal, introduced by Rep. Van Hollen, puts 1.2 million more people to work this year than the GOP budget, invests in education, energy, research, and infrastructure.
The Ryan budget resolution reflects a Republican Party's vision for an America where only the wealthy are given the resources and opportunities to thrive. It is a vision that has already been rejected by the American people.
During the Cold War, America capitalism was a positive influence, both as an idea and as a political force. The alternative was communism. The relative virtues were obvious.
Compare Eastern Europe, under the sway of the Soviets, with Western Europe -- the brightness of democracy contrasted with the grimness of dictatorship, the prosperity of the West contrasted with the deprivations of the East.
In that context and in that time, we Americans were justified in seeing our capitalist system as the good guy.
Over the past generation, capitalism has continued to strive to extend its dominion. But now the alternative against which it is fighting is no longer the failed system of communism, which collapsed in some places, was abandoned in others, and was discredited worldwide. The alternative that American capitalism battles politically now is the kind of mixed economy that virtually every market society in the world -- including the United States -- found to be preferable to unbridled capitalism for creating a decent society and providing a good life for people generally.
In that system, the market and its powerful actors are understood to be but one of several legitimate claimants in determining the destiny of a society.
In the 1950s, corporate America was more accepting of the idea of a mixed economy. American capitalism granted that in addition to big business, big labor and big government had important roles in advancing values other than those of corporate wealth and power.
But in these times, the political power of American corporate capitalism is marshaled to weaken other competing forces in the American power system, and thereby sweep aside considerations other than those of financial profit.
The American corporate system used to recognize -- albeit sometimes grudgingly -- the rights of workers. Now it uses political clout to erode the rights to organize and to get a fair share of the abundance that capitalism produces.
Earlier today, Paul "Lyin'" Ryan released the latest version of his all-cuts, all-harm-to-the-middle-and-working-classes, voucherize-Medicare, screw-seniors, give-a-big-sloppy-wet-kiss-to-the-top-1% budget. Not surprisingly, it sucks. Big time.
First, see ThinkProgress for "The 5 Worst Things About The House GOP's New Budget" (highlights: cuts food stamps and health care coverage, "gives huge tax cuts to the rich and corporations"). Blech.
Next, see the White House statement (on the "flip"), which explains that Ryan's "math just doesn't add up," that his budget "asks nothing from the wealthiest Americans has serious consequences for the middle class," etc. I mean, if this heartless, corporate tool is what passes for a "thought leader" in the Republican Party these days, it's truly a frightening time for our country.
That crazy "socialist in the White House" (that was snark; in reality, of course, Obama's about as middle of the road as you can get) and his wild-eyed economic policies are at it again!
While more work remains to be done, today's employment report provides evidence that the recovery that began in mid-2009 is gaining traction. Today's report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 246,000 jobs in February. Total non-farm payroll employment rose by 236,000 jobs last month. The economy has now added private sector jobs every month for three straight years, and a total of 6.35 million jobs have been added over that period.
The household survey showed that the unemployment rate fell from 7.9 percent in January to 7.7 percent in February, the lowest since December 2008...
In other words, the Obama recovery continues, in spite of the best efforts of Republicans to derail it. Latest example: the brain-dead sequester, which was a direct consequence of the Teahadists' wild irresponsibility in holding the nation's credit rating hostage in July 2011. In addition to the adverse impacts of the sequester in the short term, including a potential reduction in the U.S. economic growth rate for 2013, there's also the long-term adverse impact of reduced investment in the things we should be investing in - our infrastructure, clean energy, education, etc. In other words, it's Obama and his middle-of-the-road, balanced approach versus the discredited trickle-down/supply-side voodoo economics of John Boehner, Mitch McConnell, Eric Can'tor et al. I know which one I prefer; how about you?
P.S. Another reason to be thrilled that Willard lost the election in November is that he'd now be taking credit for a recovery that has occurred 100% on a Democratic president's watch.
After being off the blog for a few weeks, I had planned to write a different diary tonight. However, tonight I was reading a diary posted a few days ago by Lowell about a progressive "Grand Bargain." I rarely disagree with our "blogfather." But this time I wanted to offer another view. Here goes:
First, there is no need for a Grand Bargain at this time. The deficit is shrinking. If we focus on jobs and rebuild that sector, the deficit will shrink even further and we can fairly easily make progress paying down the debt. Indeed not only is there no need for a Grand Bargain now, but also it is contraindicated as a means to stimulate growth.
Additionally, I believe that Progressives should not use the language of hucksters Peter Peterson, Alan Simpson, and Erskine Bowles. Those and other deficit hawks don't really care about the deficit or the debt at all. Their intent is to eliminate earned benefits, all of them. And it is our job not to let them get away with it.
But let's say that at some point there were a need to make cuts. Let's say we don't get the job growth we need. And let's say we have tried for two more years or so to do just that, and have given it a real try this time, not just an anemic fraction of a real "stimulus."
The solution is to use the Progressive Caucus's budget, aka The People's Budget. Here's is the plan. Indeed it does so fairly and reasonably we could put it in place without harming most Americans as any of the Grand Bargain proposals would.
Don't like the Progressive Caucus plan? Here are just a few ways we can make headway. BTW, these ideas are sure to tick a lot of people off.
Multiple news reports, as well as comments on this morning's talk shows, are indicating the potential exists for a bipartisan "grand bargain" on a long-term deficit reduction deal. Reuters quotes White House senior economic official Gene Sperling that President Obama is "reaching out to Democrats who understand we have to make serious progress on long-term entitlement reform and Republicans who realize that if we had that type of entitlement reform, they'd be willing to have tax reform that raises revenues to lower the deficit." For its part, Roll Call reports that a long-term deficit reduction bargain "could blunt the effects of the $85 billion in automatic spending cuts now in place."
I have no idea how serious any of this is, but it's certainly sounding live a live possibility. With that in mind, I've got a few thoughts on what might constitute a progressive "grand bargain," one that would not just reduce the long-term, structural deficit, but also move our country forward and allow us to move on to other, pressing issues.
1. Far from slashing non-defense discretionary spending, we need to be drastically increasing our investment in America - both its physical capital and "human capital." That means restoring full funding to programs which help educate our people (not just kids, but lifetime learning), massively upgrade our transportation and power grids, kick-start the transition to a clean energy economy, invest in cutting-edge research and development, and basically put money into anything that provides a positive ROI (return on investment) to our nation. It's important to emphasize that although many people confuse "spending" and "investment," they're actually quite different, as "investment" results in stronger economic growth and, in many/most cases, more revenue into the system than has gone out for the investments.
2. We need to raise revenues. Badly (note: current tax revenues are the lowest as a share of GDP "in more than 60 years). To do this, we don't have to raise tax rates (although I would have gotten rid of the Bush tax cuts for anyone who's not truly "middle class" or below). Instead, we can do it by slashing tax expenditures. As David Brooks writes, "[t]hese tax expenditures are hidden but huge...in 2007, they amounted to $600 billion." These expenditures include the exclusion for employer-sponsored health care ($171 billion a year), the mortgage interest deduction ($87 billion), and preferential treatment of capital gains ($66 billion). Then there are all the wasteful subsidies, on things like corn-based ethanol and fossil fuels, which add up to tens of billions of dollars per year. It goes on and on, and basically blows a huge hole in the budget, while making the tax code overly complicated, and also wildly unfair. So...simply the tax code, eliminate, or at least pare back, a lot of these tax expenditures - especially for wealthy corporations and individuals. This idea should have appeal to both Democrats and Republicans.
3. A truly progressive "grand bargain" would shift the tax code so that we are making the things we want to have less of (e.g, pollution) more expensive, while making the things we want to have more of (e.g., productive investment) less expensive. On this front, the Washington Post (of all people) nailed it this morning in its editorial calling for a carbon tax. As the Post points out, this would accomplish multiple goals: reducing carbon emissions, reducing the deficit, allowing for cuts in taxes that discourage investment in the US, etc. This one's a no brainer.
4. There's no doubt in my mind that we need to reform entitlements, which increasingly are taking over our entire budget (turning us into an "insurance company with an army," as the quip goes). Clearly, we need to maintain a social safety net, and clearly we need to protect benefits for people who really need them. But we also need a lot more stringent "means testing" on entitlements so that we're not essentially transferring money from young people (and the future) to well-to-do/rich retired people who really don't need all that money. While we're at it, we need to raise the cap on the payroll tax, which exempts wages over $110,000 from the tax. Why someone making $100 million a year should only be subject to the payroll tax on the first $110,000 of their income, while the remaining $99,890,000 is not subject to the payroll tax, makes no sense to me.
Anyway, those are just a few ideas, not a comprehensive plan. That's nuts. Still, it seems to me that if we did these things, we'd slash and/or completely eliminate the deficit, simplify our tax code, strengthen our nation's future, protect our environment, and reduce the massive inter-generational inequities in our current system. We also would be able to move on from this debilitating debate/self-generated crises over the deficit, and get back to a focus on creating jobs, building a 21st century economy that's "built to last," and dealing with the many other issues - immigration reform, guns, you name it - that have languished over the past few years.
P.S. It should go without saying that we should NOT be doing brain-dead, across-the-board cuts to the tiny slice of the budget known as non-defense discretionary spending. We also should do nothing that would hurt anyone who is truly in need, or that shreds our social safety net (we should be strengthening that for decades to come).
Rep. Bobby Scott makes several excellent points here.
1. You can't cut $1.2 trillion out of the budget "in any intelligent kind of way," as non-defense discretionary spending is already "at the lowest point we've been as a percentage of GDP since before Medicare...You can't make $1.2 trillion in cuts make sense."
2. "If you're not going to have new revenues to help achieve a $1.2 trillion deficit reduction, then the mindless, painful, across-the-board sequester is about the only way to do it." And the reason why we can't get any revenue increases is, very simply, because of one party: Republicans. End of story.
3. The problem is that "people think that you can cut taxes and it doesn't have any effect on the budget...well, if we had cut taxes a little less, we wouldn't have to worry about the sequester, and that's really what we're paying for right now."
4. If we try to fix the sequester, we might have to cut Social Security, which would be even "worse" than the sequester itself.
Steven Brill has a must-read cover story in Time this week detailing how the federal government's refusal to set rates for procedures, services and products means we all pay more for health care. I found this out first-hand last fall when my doctor tried to charge me $95 for a flu shot.
I was in for a routine physical and mentioned, "One of these days I need to go to CVS and get a flu shot." She said, "Oh, I can give you one right now." She grabbed a vaccine and gave me the shot - the whole process lasted about a minute. There was no discussion of price - I assumed it was either free or they'd charge me what the pharmacy does, about $25.
In this article I just published at the Roanoke Times, I explain just how badly Virginia will suffer if Sequestration kicks in, particularly from cuts to the Defense Budget. Our Senators Kaine and Warner have been very willing to compromise, and obviously so has President Obama, to prevent the cuts. Even some Republicans have been willing to compromise in the past (I note some from neighboring states).
But House Majority Leader Eric Cantor continues to lead the hard-line faction that could single-handed, prevent a deal and directly result in over 120,000 Virginians being thrown out of work this year. Then, EVERY year for the next ten,
According to George Mason University, DoD-related sequestration cuts would cost Virginia 136,191 jobs, and annually would suck almost $12billion (nearly 3percent) from Virginia's total economy.
See the "flip" for a transcript. The bottom line is that Democrats have offered a compromise plan to avoid the sequester, one that is balanced between revenue increases (e.g., by closing tax loopholes which benefit the wealthiest Americans and corporations) and smart - not meat cleaver, like the current sequester calls for - spending cuts.
Unfortunately, Republicans are being...well, the usual (for them, that is): rigidly (anti-tax, anti-government) ideological, refusing to raise revenues one dime, no real plan of their own to rein in entitlement spending (unless you count Paul Ryan's plan to gut/privatize Medicare a "plan"). '
Anyway, I'm happy to see President Obama dispensing with the false equivalence and "both sides" nonsense, and instead calling out Republicans for their wildly irresponsible, reckless, harmful behavior. Now, if only the Bob McDonnells of the world would do the same, and stop pretending that this problem isn't overwhelmingly the fault of his own party, beholden as it is (and as HE is!) to Grover Norquist, the Koch brothers, etc.
The two main things I'd like to point out in the press release below are: 1) who signed (all of Virginia's Democratic U.S. Representatives and Senators, plus Republican Representatives Wittman, Rigell, Forbes and Wolf); and 2) who did NOT sign (Republican Representatives Robert Hurt, Bob Goodlatte, Eric Can'tor, and Morgan Griffith). That's right, Republicans Can'tor, Goodlatte, Griffith and Hurt put their far-right-wing ideology ahead of the wellbeing of Virginia's citizens to such a degree that they wouldn't even sign onto a letter urging "immediate action to avert the devastating impacts of sequestration" that will be " particularly devastating to Virginia." Apparently, they've got their priorities - allegiance to Grover Norquist, for instance - and it trumps their oath of office. I urge everyone to keep that in mind the next time these jerks are up for reelection.
WASHINGTON, DC – Members of Virginia’s Congressional Delegation today sent a letter to President Barack Obama, Speaker John Boehner, and Senate Majority Leader Harry Reid expressing their unity for immediate action to avert looming cuts set to hit March 1, stressing the disproportional impact to the Commonwealth of Virginia. The bicameral, bipartisan group of members also stressed the enormous impacts on the country’s national security and federal government, and the ripple effect on Virginia’s economy.
Virginia Senators Mark Warner and Tim Kaine, and Representatives Rob Wittman (VA-1), Scott Rigell (VA-2), Robert C. "Bobby" Scott (VA-3), J. Randy Forbes (VA-4), Jim Moran (VA-8), Frank Wolf (VA-10), and Gerry Connolly (VA-11) wrote, in part:
“As a bipartisan delegation of Virginia lawmakers representing wide-ranging interests and viewpoints, we write to show unified support for immediate action to avert the devastating impacts of sequestration. The Commonwealth of Virginia, with its long history of contribution to our national defense and to the federal government, will bear a disproportionate amount of the pain imposed by these arbitrary cuts should they come to pass.”
(Also, make sure you sign the petition by Sen. Herring and Del. Hope to demand Medicaid expansion now! - promoted by lowkell)
After an eventful week in Richmond, the General Assembly has been working furiously to wrap up the business of this session. There are many issues to consider, with transportation issues, redistricting plans, and the issue I am fighting for, Medicaid expansion.
The Senate overwhelmingly voted to move forward with expansion in their budget this week, after Lt. Bill Bolling (R) explained why he supported expansion and Secretary Bill Hazel addressed the Senate. With the Senate voting to do the right thing for Virginia, we now await action from the House of Delegates. If the House and Senate can agree on expansion in their conference committee, to work out their differences in their budget blueprints, it will be up to Governor Bob McDonnell to decide if he wants to allow Virginians to continue to pay taxes while forfeiting the benefits of Medicaid expansion to other states who chose expansion. With the Chamber of Commerce supporting Medicaid expansion, is there any other choice for the House and Governor?
If the House of Delegates comes around, we can move forward with Medicaid expansion on January 1, 2014 and begin to help 400,000 Virginians gain health insurance, create 30,000 jobs in the Commonwealth, and avoid the masochistic choice to have Virginians continue to pay their fair share of Federal Taxes and leave that funding for other states to benefit.
Time is running out for the Virginia General Assembly to accept the Medicaid expansion prescribed in the Affordable Care Act.
Yesterday, Republican Lt. Governor Bill Bolling came out and urged Virginia Republicans to accept Medicaid expansion, in sharp contrast to his GOP colleagues Governor McDonnell, AG Cuccinelli and Speaker of the House Bill Howell.
We cannot allow this opportunity to be missed. We cannot afford to ignore the 400,000 Virginians who would gain health insurance from expansion. We cannot afford to turn down the $2 billion per year increase in Federal Funding for our Medicaid program - funding that comes from the taxes Virginians will continue to pay regardless of the GA decision! We cannot afford to pass up the estimated 30,000 new health care jobs for the Commonwealth.
Last week I submitted this piece to the Washington Post articulating the strategy I think President Obama should use in dealing with the problem of the debt-ceiling and the Republicans. In the days since, it has become clear that -- although the President has made many of the same rhetorical points that I recommended -- he will not be taking the approach I proposed. Overtaken by events, this piece will therefor not be appearing in the Post.
But I'd like to share it here with you anyway. Time will tell how well the President's decision on strategy works out.
Republicans in Congress are once again poised to damage their country with a threat to default on the nation's debt. It's time for President Obama to neutralize this threat with one of his own.
First, President Obama could remind Americans of some basic points about the debt ceiling:
• The debt ceiling isn't about spending. The money has already been spent (by Congress). This is about paying our bills.
• Responsible people -- and responsible nations -- pay their bills.
• The United States benefits from an impeccable record for paying its bills. That's why the U.S. can borrow at low interest rates.
• If Republicans carried out their threat and made us default on our credit, they would seriously damage America's financial standing, thereby costing American taxpayers billions of dollars. That irresponsibility could also damage the world economy and plunge us back into recession - adding to the federal deficit, which they claim to care about.
• Last time Republicans used the debt ceiling to extort concessions, the mere threat damaged our economic recovery.
Mitch McConnell says revenue is off the table. That is the heart of the problem. Already the fixes which were purported to raise revenue actually increase the deficit by $4 trillion. That's because beneath the surface of the recent tax "reform" was its opposite hidden from plain view.
Yet both before and after the "reform" we do not have a deficit problem as much as we have a revenue problem. More specifically, we have a tax avoidance problem, a profligate tax-cutting problem, and a tax unfairness problem. This is one estimate of how much the rich avoid paying taxes, most legally. But some relatively easy fixes could make a huge difference. For example:
1. Reduce tax "expenditures" (i.e., tax breaks and tax preferential treatment): $1.25 trillion
2. Go after tax underpayments: $450 billion
3. Close illegal tax havens: $250 billion (probably a huge underestimate because between $21 and $32 trillion are parked in offshore accounts).
4. Corporate taxes, the bite (for those paying any at all) has dropped on average 12%: $250 billion.
5. Add a half-cent financial transaction tax: $500 billion. Let those churning the market pay a tax for doing so.
6. Remove the payroll tax cap: $300 billion*
7. Keep the estate tax. $100 billion
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