It's simple, taxes must either increase substantially or we must spend a lot less...

Still a progressive tax system, but minus the exemptions, deductions, and other loopholes that people use to reduce their tax liability.

 

Anyone else finding it face-palm inducing that Obama caved on the Bush tax breaks to a republican congress demanding deficit expansion, yet is now proposing tax increases to a republican congress demanding deficit reduction? I can't decide if it's politically r****ded or brilliant.

 

You have no sense of humor, glad.

 

Question is, why did $400,000 a week guy throw money at politicians who intentionally enacted policies making it more difficult (or killed policies making it easier) for $400 a week guy to take care of his family and pay for his house?

 

DCkid,

Do you own your own home? Have any rental properties? How well-versed are you in tax laws?

 

All I know is that at this moment, I'm just voting for Obama in 2012. I'm not contributing or volunteering.

 

I know how you feel. The man is maddening.

 

Isn't Obama a part of the 'system'

Same guys at the Fed, the same lobbyist, the same military complex, the same corporate power over the govt, the same Wall Street, Bankers, Party powers etc.

I like his speeches and his humble and thought out responses to criticism, he seems like a very down to earth and nice man, but he certainly seems like just another lackey for corporate global power- ie those with great wealth and power.

 

Only if you ignore the details. The details, in this case, are that he traded a 2-yr tax break extension for a whole array of things he wanted - START, DADT repeal, middle class tax cut, etc. The things he got were permanent, while the things he gave up were temporary. Now that the GOP wants a balanced budget, he's arguing to take back what he gave up as an alternative (and popular with the public) strategy to cut the deficit vs what the GOP proposed.

This line, in particular, was a brilliant way to define the GOP plan:


Worst of all, this is a vision that says even though America can't afford to invest in education or clean energy; even though we can't afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that's who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that's paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That's not right, and it's not going to happen as long as I'm President.

The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan's own budget director said, there's nothing "serious" or "courageous" about this plan. There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There's nothing courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill. And this is not a vision of the America I know.

He's now attempting to use that wedge issue - one that the public supports Dems on - as a noose around the GOP on what's the going to be the defining issue of the next two years: deficit reduction. I'm not sure Dems are good enough at messaging to make it work, but in theory, it's a brilliant strategy. Every time the GOP suggests a cut, the Dems can make that comparison of "why should x pay for your continued tax cuts for the wealthy" and force the GOP to keep defending those cuts.

If the tax cuts had been killed last year, it would undoubtably have been better for our long term economy. But since they weren't, it provides a perfect wedge issue for the Dems to use in their messaging.

 

I do understanding this view from Krugman - one mistake Obama makes is offering what he thinks is the best end result from the start:


"I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no -- better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire."

I don't agree with the idea that it's better to do nothing - and I don't know that Obama could credibly present a viable deficit reduction plan while only pushing the Dem view of things - but I think he'd have been wise to push the proposal a little to the left to give him room to maneuver more back to the middle. But the proposal itself is the first serious one we've had. It touches taxes, defense, Social Security, Medicare, and Medicaid - you have to hit each of those to make this work.

 

That tune is soooo 2008. Got lots of airplay back then too. Two full year's worth. And people didn't dance.

Is he going to add a verse that says "And this time we really mean it. Really we do. If that's OK with you."

 

But politically, it worked very well - Obama cleaned up in that election (that wasn't the only reason, but people supported the Obama economics over McCain economics). At the time that it finally came up for a vote (December 2010), there was no election nearby and we were in a very ugly economic situation. And, as noted, he used a 2-yr extension of it to accomplish long-term Dem priorities that people said could never be done (like DADT).

Here is full Krugman on the Obama proposal - and keep in mind, he's basically universally been an Obama critic:


The Budget Speech

Style: I liked the way Obama made a case for government at the beginning. I liked the way he accused Republicans of pessimism, of abandoning a hopeful vision of America. Good that he went after the Ryan plan — and good that he went after the cruelty of that plan. If you ask me, too many percentages. Oh, and whichever speechwriter came up with “win the future” should be sent to count yurts in Outer Mongolia.

Substance: Much better than many of us feared. Hardly any Bowles-Simpson — yay!

The actual plan relies on some discretionary spending cuts, this time including defense — good, although I think too much is being cut from domestic spending. It relies on letting the Bush tax cuts for the rich expire — finally! — plus unspecified reductions in tax expenditures.

The main thing, though, is the strengthened role of and target for the Independent Payment Advisory Board. This can sound like hocus-pocus — but it’s not.

As I understand it, it would force the board to come up with ways to put Medicare on what amounts to a budget — growing no faster than GDP + 0.5 — and would force Congress to specifically overrule those proposed savings. That’s what cost-control looks like! You have people who actually know about health care and health costs setting priorities for spending, within a budget; in effect, you have an institutional setup which forces Medicare to find ways to say no.

And when people start screaming about death panels again, remember: you can always buy whatever health care you want; the question is what taxpayers should pay for. And compare this with a voucher system, in which you have insurance company executives, rather than health-care professionals, deciding which care won’t be paid for.

Overall, way better than the rumors and trial balloons. I can live with this. And whatever the pundits may say, it was much, much more serious than the Ryan “plan”.

Update: I should probably say, I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no — better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire.

Update update: I don’t want to step too much on the administration’s selling point, but progressives upset by the claim that there are three dollars of spending cuts for every dollar of tax increases should be aware that there’s a bit of creative labeling going on. As I understand it, they’re counting both interest savings and reductions in “tax expenditures” — subsidies through the tax code — as spending cuts. It’s a much more balanced plan if you look at the balance between revenue increases and non-interest outlays.

 

Social Security and Medicare and giants compared to defense which is a giant itself compared to taxes.

I didn't hear anything in Obama's speech about those.

 

Whoops, here's the link:

http://krugman.blogs.nytimes.com/2011/04/13/the-budget-speech/?smid=tw-NytimesKrugman&seid=auto

 

He mentioned SS, though briefly. But did you miss this massive chunk of the speech on Medicare/Medicaid? He talked more about that than he did defense or taxes. The Krugman piece also expounds on what exactly this approach means.

The third step in our approach is to further reduce health care spending in our budget. Here, the difference with the House Republican plan could not be clearer: their plan lowers the government's health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government's health care bills by reducing the cost of health care itself.

Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on these reforms. We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare's purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid. We will change the way we pay for health care - not by procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results. And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services seniors need.

Now, we believe the reforms we've proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional one trillion dollars in the decade after that. And if we're wrong, and Medicare costs rise faster than we expect, this approach will give the independent commission the authority to make additional savings by further improving Medicare.

But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.

 

It came up earlier then that. But he was too timid to bring it to vote. Because of the election nearby. Bush's cuts were temporary too....

Sorry....I love the man. But he took one in the gut when he agreed to extend the cuts he'd campaigned, and spoken out so consistently against.

 

To be fair, it was the Senate and House that bailed on that vote. Obama was pushing for it (at least publicly - who knows what he did behind the scenes). And I completely 100% agree that it was a stupid move for the Dems to bail on taking that vote before the 2010 elections. That was the one issue that Dems could have run on, and they ran away from it.

 

So use purchasing power to reduce drug costs, reduce fraud, and subsidies? Do you seriously think that is even close to enough?

I don't.

 

Of course it's not - it's also not all that he suggested.