Fiscal Cliff Talks Center on $2 Trillion Proposal

[democrattotheend]

Source: Political Wire/CNN/WSJ

President Obama and House Speaker Boehner "are discussing a $2 trillion framework on a deal to avert the fiscal cliff, that would include roughly a trillion in tax increases and roughly a trillion in savings from entitlement programs," CNN reports.

"Boehner and the president met in person on Monday, but sources familiar with the talks indicate that the framework under discussion is what Republicans are pushing to get to agreement, but it's unclear whether the make up of the $2 trillion framework could get support from Democrats."

Wall Street Journal: "While the White House objected to major parts of the proposal, senior Democrats described it as a tipping point that moves talks away from deadlock. Instead, it cleared the way for both sides to engage in nitty-gritty haggling over exactly where the new income threshold might be set and what should comprise the spending cuts."

Read more: http://politicalwire.com/archives/2012/12/17/fiscal_cliff_talks_center_on_2_trillion_proposal.html

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No good, IMO. The $1 trillion in revenue is OK depending on how it is structured (the president upped it to $1.6 trillion in his initial offer to start out from a high bargaining position; we never expected to actually get it). But $1 trillion in cuts is bad...way too much. They already cut $1 trillion last year, which means they probably got most of the low-hanging fruit. I don't see how you cut $1 trillion w/o seriously hurting the most vulnerable populations.

It looks like it's far from a done deal...WSJ says the White House is pushing back on major parts of the proposal. But we need to keep the pressure up, and not just regarding Social Security and Medicare. There are a lot of other important programs, such as food stamps and LIHEAP, that could be on the chopping block. Medicaid not so much, according to an article I read last week, but doesn't hurt to be vigilant.

[PoliticAverse]

1. Doesn't the President's repeatedly mentiond desire of "a balanced approach" imply

he'd accept cuts at the same level as revenue increases ?

[democrattotheend]

6. I hope not

He has pointed out many times that they already did $1 trillion in cuts last year w/o any revenue increases.

[freshwest]

2. You're right. Obama said to keep pressure on representatives of both parties to disallow changing

Social Security (except for the cap), Medicare (except eliminating excess profits) and Medicaid (the funding increased and guidelines relaxed) to achieve universal coverage.

And to resist chained CPI that hurts seniors and disabled the most, including veterans. Those are the GOP's proposals.

An expansion of the primary safety net will blunt the reduction of programs currently exist only to ameliorate the gaps before the changes the ACA made. Relaxed rules help to achieve the same standard as offered to those covered by the larger safety net programs now.

So we must stay informed and focus on the overall purpose, not necessarily the names of programs that might be cut, nor be frightened by the right wing spin in the media.

[John2]

3. This keeps

coming from the Wall Street Journal. They have an interest in cutting Entitlements.

[Myrina]

4. I think this weekend gives POTUS a whole new stance to argue from.

As he said in his speech last night, WE ARE FAILING OUR CHILDREN.
Not just in terms of safety from gun violence.
But in terms of access to schools. Teachers. Access to health care. Access to safe food & housing.
Access to clean environments.
Access to hope for a future!

He should tell the GOP to stuff their austerity up their fiscal cliff and go all LBJ/Great Society on them.
He's got the capital: now is the time.
Think big, sir.

[Dustlawyer]

5. Where is there any mention of the Pentagon's budget?

I read something here yesterday regarding the 200 plus golf courses us tax payers maintain for the military. Let them join a country club. Oh wait, they already have, the U.S. military! It may not be a country club for the rank and file, but for the almost 1,000 generals it sure is. Their hired help is paid by us. There is so much fat there we could cut half of the fat and be in the black! I believe we will be instructed to bend over real soon. We are about to get it straight up the _ _ _!!! When it comes to the money, the fix will be in everytime!

[grahamhgreen]

7. Exactly, we could cut a trillion from the pentagon and never miss it.

[mostlyconfused]

12. How do you cut a trillion from a $700 billion budget?

Or are you talking $1 trillion over 10 years? If so, is it even meaningful when the annual deficit is in excess of $1 trillion?

[grahamhgreen]

13. Over 10 years, that's what they were talking about in the article, although

I could agree with cutting it in half or more:




Our real revenue would come from taxing the rich at pre-Reagan levels, that would net us 7 trillion in 10 years.

Then, we could go after loopholes, corporate welfare, and a stet tax.....

[mostlyconfused]

14. Cutting half of the defense budget

I've heard some fairly aggressive cuts suggested to defense, but don't often hear specifics. What line items would you cut or reduce?

[grahamhgreen]

17. Off the top of my head?

#1) Wars in the ME.
#2) renegotiate interest payments on debts incurred in the past.
#3) Limit the profits that war profiteers are allowed to take.

[mostlyconfused]

15. "Our real revenue would come from taxing the rich at pre-Reagan levels"? Doubtful.

You mention 7 trillion in 10 years...which means we still have $3 trillion or more to address, based on annual budget deficits of $1+ trillion.

That aside, can you help me understand how you get to those numbers, because I don't think you can get nearly that much by raising taxes on just the rich. What kind of rates are you suggesting, and at what income levels?

[grahamhgreen]

18. Well, now we're talking about paying off the debt....

According to the President, eliminating the Bush tax cut (4% increase) will raise 700 billion in revenues in 10 years (http://www.cbsnews.com/8301-18560_162-7032813.html).

Which means a 40% increase on the top tax rate to a rate similar to the pre-Reagan rate of 79.6% would yield 7 trillion in 10 years.

Which means a 58% increase to 94% (the rate the Greatest Generation thought was best) would yield over 10 trillion dollars over the next 10 years.

And then we can institute a STET tax, close corporate welfare loopholes, and bring in revenue from tariffs, etc.....

[dkf]

26. Lets see how well that works for France.

They are losing their richest citizens.

Maybe that's the point huh? Then we will all be more equal after we get rid of rich people. Equally poorer that is.

[grahamhgreen]

29. The last time they did that, it worked out really well for them, but for the rich,

they really lost their heads over it!

Hopefully, this French revolution won't use the guillotine.

People who corrupt systems are the antithesis of democracy.

Good riddance to the banksters and their ilk, no one needs them.

No one needed Marie Antoinette, either.

[dkf]

34. No need to kill them, people who want to pay will stay and others will leave.

[plethoro]

8. I wonder if other current issues will allow significant entitlement cuts

to be passed more easily.

[JDPriestly]

9. No cuts to Medicare, Social Security or Medicaid.

Those are separately funded.


How about cutting our military budget?

President Obama. We will not support cuts to Social Security, Medicare or Medicaid.

[olddad56]

10. a trillion from the rich, a trillion from the poor. Seems a little unfair to me.

[humbled_opinion]

11. The rich never pay

ever, unless we have a conversation about confiscating wealth whcih no one will have, than the rich simply don't pay they pass their costs on to the consumers of their goods and services, they charge more, they layoff employees or cut their hours back, they hide their money, hire accountants to lie and cheat for them so they pay less and less and we the suckers in the middleclass always pay more out of our pockets because we can't hide and can't do anything except boycott and then of course we don't get the things we need either but those hurt most of all are the poor who can't afford to buy but are told they must be willing to give up more and more of their frugal existance.

[mostlyconfused]

16. Really wish they'd talk annual numbers, not 10 year numbers

1. Basing it on ten years lets them off the hook...spending and tax rates could change again in a year. New spending will be added, tax rates will go up or down. The math and the government's commitment to the plan, are completely unreliable

2. It's a bit of smokescreen that allows them to avoid the true severity of the problem. $2 trillion sounds like a huge number. But $2 trillion over 10 years. On average that leaves us with an $800+ billion deficit every year (more this year as it looks like we're on track for a $1.3 trillion deficit).

So is the basic proposal to add $8 trillion to the debt over the next decade rather than adding $10 trillion? Raising the top rate from 35% to 39% doesn't even make a rounding error's worth of difference on numbers like that.

It's like they are arguing about the place settings on the table, while the house is on fire.

[Redfairen]

19. It's just talk. I don't think Boehner can keep the Tea Party on board.

The Tea Party is about no deals at all. I think that whatever Boehner negotiates they'll throw it back in his face. They've done it before.

[grahamhgreen]

20. It's a revenue problem, NOT a spending problem (except for the bloated military, which is 60% of it)

[mostlyconfused]

21. You can't raise enough revenue to fix the problem

There is no tax rate on the top 2% which would raise enough tax revenue to address a $1 trillion annual deficit. Tax 100% of every penny earned about $250,000, and you don't come close to closing that budget gap. Yes, more revenue is needed, but how is it just a revenue problem?

[grahamhgreen]

22. Ahem, but Bull Hockey

According to the President, eliminating the Bush tax cut (4% increase) will raise 700 billion in revenues in 10 years (http://www.cbsnews.com/8301-18560_162-7032813.html).

Which means a 40% increase on the top tax rate to a rate similar to the pre-Reagan rate of 79.6% would yield 7 trillion in 10 years.

A 58% increase to 94% (the rate the Greatest Generation thought was best) would yield over 10 trillion dollars over the next 10 years.

So a deficit of 1.3 trillion would be gone in a little over a year and our DEBT would be gone in under 10 years (as we pay it down).

Simple! Done and done - and we haven't increased the 15% tax on investment income, STET tax, tariffs, inheritance, or closed corporate welfare loopholes yet.

2010 Y1: 14T - 3T (2T normal revenues plus additional 1T from tax on ultra-rich) = 11T debt
2011 Y2: 11T(debt) + 1T(deficit) - 3T = 9T debt
2012 Y3: 9T(debt) + 600B(deficit) - 3T = 6.6T debt
2013 Y4: 6.6T(debt) + 700T(deficit) - 3T = 4.3T debt
2014 Y4: 4.3T(debt) + 800T(deficit) - 3T = 2.1T debt
2015 Y5: 2.1T(debt) + 800T(deficit) - 3T = .1T debt
2016 Y6: .1T(debt) + 900T(deficit) - 3T = +2 Trillion SURPLUS!!!

[democrattotheend]

23. Sadly, that would get maybe 10 votes in the Senate

If that. Have you ever even heard Bernie Sanders call for rates that high?

[grahamhgreen]

24. Thing is, we can tax our way out of this debt that the wealthiest Americans have led us into -

simply by taxing them (by wealthiest I'm really talking about the banksters and wall street types).

Now, the greatest generation had the balls to do this, and I do too.

But that meme floating around that we can't tax our way out is incorrect.

And I consider 10 senators a good start!

[mostlyconfused]

25. Simple if we don't live in the real world, or have to do real math

"According to the President" the deficit would already be cut in half, so while we can support his goal of a fairer tax system, we really should question his math a bit.

How about according to IRS data of actual tax returns? The most recent tax year with detailed information available was 2009.
Source: http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income

The IRS data does not break out returns above $250K, so let's take returns with taxable income above $200K.

> Number of returns in that category in 2009: 723,191
> Total taxable income from those returns: $903.1 billion
> The portion from returns in excess of $250K: $722.3 billion
> Of that, the portion not from capital gains: about $500 billion

So you are increasing the tax rate on $500 billion in income. Today the rate is 33% on taxable income over $178,650 to $388,350, and 35% on taxable income over $388,350. Let's just say on average we collected 34% on all of those dollars today.

That means we already collected $170 billion on that income today. Now raise the rate on those dollars to 39%, and we would have collected $195 billion in taxes, for a net gain from that tax increase of $25 billion annually. At a 39% tax rate on incomes above $200K you'll get your $700 billion in 28 years.

[mostlyconfused]

27. One correction to my math...

I was off on my taxable revenue figure by about $35 billion, because I said let's look at taxable income above $200K, but then I subtracted $250K from each of those returns instead of $200K. Here's the corrected math...

> Number of returns in that category in 2009: 723,191
> Total taxable income from those returns: $903.1 billion
> The portion from returns in excess of $200K: $758.4 billion
> Of that, the portion not from capital gains: about $535 billion
> Tax collected on those dollars at a 34% rate: $182 billion
> Additional tax collected at a new 39% rate: $27 billion

So I was mistaken. It would take 26 years to get to $700 billion, not 28 years.

[mostlyconfused]

28. How about a 79.6% rate or a 94% rate?

Apply a 79.6% rate on taxable income above $200K
> Additional tax collected at the new rate: $244 billion, or 22% of last year's annual deficit

Apply a 94% rate on taxable income above $200K
> Additional tax collected at the new rate: $322 billion, or 29% of last year's annual deficit

Why not, tax it at 100%
> Additional tax collected at 100% rate: $354 billion, or 32% of last year's annual deficit

Then raise the capital gains rate on people in that income bracket to 100% as well. Basically capping personal incomes from all sources in this country at $200K. Nobody is allowed to make more than $200K. In other words, take the full $758.4 billion. You'll cover 69% of one year's worth of annual deficits. That's at a $1.1 trillion deficit. So far it looks like this year will be bigger. And assuming that income would be there to tax the next year and the year after (which it would not), you'd still be running $300-400 billion deficits every year and be trillions deeper in debt a decade from now.

[grahamhgreen]

30. The President's numbers come from the CBO, and have been fully vetted,

I'll trust those:

According to the President, eliminating the Bush tax cut (4% increase) will raise 700 billion in revenues in 10 years (http://www.cbsnews.com/8301-18560_162-7032813.html).

[mostlyconfused]

31. CBO also says Obamacare will cost twice as much as originally projected

Should we take that as gospel as well? My source is actual tax return date directly from the IRS.

But suppose you do take them as gospel. The government is racking up annual deficits of $1 trillion dollars. You're satisfied with taking in $70 billion each year to address that?

Actual IRS data disputes a comment made by the President in a TV interview. I always prefer to go to the source data. Based on that IRS data if we raised the rate on income above $200K to 46% instead of to 39% we'd raise $70 billion per year, or $700 billion over a decade. We'd raise enough to offset 6% of the annual deficit. Any ideas on how to address the other 94%?

The whole conversation is silly, and to suggest that it is an even remotely serious attempt at addressing the problem is laughable.

[grahamhgreen]

32. Disagree, thanks!

[mostlyconfused]

33. Disagree with tax return data direct from the IRS?

Ok. I guess you'd have to do so in order to conclude that tax increases can adequately address the deficit. But thanks for the conversation...always interested in other opinions, especially if they are based on well sourced information. If you do have a link to that CBO report I'd be quite interested to take a look to see if I can find the discrepancy between that and the IRS data. I promise to report back to the group with what I find.

[wordpix]

35. my mom with Alzheimer's gets $2200/mo Soc. Sec, her expenses are $14,000/mo

and that's with my help. When someone needs round-the-clock nursing care + food + housing, that's what it is. Yet the latest part of the deal is to cut COL increases Way to go, Pres. Obama. Don't do it!!!!

BTW, she pays $200/mo for Medicare premiums + another $200/mo for Supplemental and that's about what her meds cost out of pocket.

FU, RepubliCONS My mom just ran out of money after 5 yrs. with Alz. disease