Michael Tomasky's Blog, page 8
April 11, 2011
Jan Schakowsky's tax plan | Michael Tomasky
Some of our US readers will be familiar with Congresswoman Jan Schakowsky of Illinois, a liberal firebrand and a very sharp human being. Some weeks ago, she proposed a tax plan I've been meaning to write about, and now there appears a write-up by Nancy Folbre at the NYT's Economix blog to spur me finally to action.
Folbre describes the plan thus:
Consider, for instance, the Fairness in Taxation Act introduced by Representative Jan Schakowsky, Democrat of Illinois, which would increase the top federal marginal income tax rate to 45 percent for married couples earning more than one million dollars a year and to 49 percent for billionaires, from the current rate of 35 percent.
Historically unprecedented? Hardly. The top marginal tax rate was 50 percent in the mid-1980s and even higher in the 1950s...
Such a boost could raise an estimated $78 billion, more than the current Republican budget-cut goal. Even if it fell far short it would avert proposed cuts for many valuable programs, including Head Start, which provides early childhood education, and Pell Grants, which help low-income families send their children to college.
Some outspoken millionaires, including the billionaire Warren Buffett, have long advocated increased taxes on the rich.
Plenty of ordinary Americans favor this policy as well. An NBC News/Wall Street Journal poll conducted in February offered 26 different ways of reducing the federal budget deficit. The most popular option, considered acceptable by 81 percent of respondents, would place a surtax on federal income taxes for those who make more than $1million a year.
You'll recall perhaps that last December, when we were talking taxes, Chuck Schumer presented the idea of a millionaires' surtax, which I liked a lot. But it never went anywhere.
People talk a lot these days about "frames" and "narratives" and who's setting up the general parameters of debate. And the tax issue is one on which the Democrats have allowed the frame to be entirely Republican-driven. The idea that $250,000 is the highest level we discuss wasn't struck in tablets on Mt. Sinai. It was in the Bush tax cuts. There's no reason on earth that we can talk only about that level as the highest threshold.
Schakowsky's plan includes no cuts. It's one thing for a liberal member of Congress from Evanston to do that. Quite another for a president. Obviously, Obama can't propose a revenue-only way out of our mess. He'd be crucified and would be certain - certain - to lose the election. And anyway he's obvioulsy not going to.
But if the only revenue in his plan is to move those above $250,000 back up to the 39% of the Clinton era, I think that will be a badly missed opportunity. The $1 million threshold polls very well, as you can see above. And it's a bargaining chip, right? That is, ask for 45, take 42, whatever. You've won a point of principle.
The bottom line is, we're going to be fighting about taxes anyway, and Republicans are going to be screaming anyway. Adding one more top marginal rate for households above $1 million is not going to alter the basic terms of debate, except possibly to the Democrats' advantage in that they would then be able to say Republicans are defending millionaires, or the top .5%.
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Obama v. Ryan and the t-word | Michael Tomasky
There is consternation in professional liberal circles over some of David Plouffe's remarks as he made the rounds of the news shows yesterday. Plouffe announced that Obama will lay out his own spending plan Wednesday and will take, in the usual Washington parlance, a "scalpel" rather than a "machete" to Medicare and Medicaid, as GOP House Budget Chairman Paul Ryan is doing.
We don't know details yet, but we do know that the biggest difference between Obama and Ryan is going to be on taxes. Ryan cuts taxes by $4.5 trillion over a decade, lowering the top marginal rate on the higher brackets to 25% (it's now about 35%). Obama campaigned on returning the upper brackets to the Clinton-era 39%, so in theory he's for that, although I guess we'll see.
The consternation has to do of course with whether Obama is accepting too many Ryan premises (i.e., the idea that Medicare and Medicaid should face cuts at all), and in response to Obama's decision to embrace and praise the budget deal worked out last week, which I took issue with on Saturday (the post right below this one). This point of view is expressed today by Krugman:
Among other things, the latest budget deal more than wipes out any positive economic effects of the big prize Mr. Obama supposedly won from last December's deal, a temporary extension of his 2009 tax cuts for working Americans. And the price of that deal, let's remember, was a two-year extension of the Bush tax cuts, at an immediate cost of $363 billion, and a potential cost that's much larger — because it's now looking increasingly likely that those irresponsible tax cuts will be made permanent.More broadly, Mr. Obama is conspicuously failing to mount any kind of challenge to the philosophy now dominating Washington discussion — a philosophy that says the poor must accept big cuts in Medicaid and food stamps; the middle class must accept big cuts in Medicare (actually a dismantling of the whole program); and corporations and the rich must accept big cuts in the taxes they have to pay. Shared sacrifice!
One presumes however from the things Plouffe said that a challenge will indeed be mounted on the question of taxes, especially for the well-off. This is a fight we've been needing to have in the US for years. As I've said a gajillion times - yes, the current course is unsustainable, but revenues have to be part of the sustainability conversation.
Every poll I've ever seen on the subject suggests that Democrats and most independents are on the Obama side of this question and not the Ryan side. Polls are one thing when an issue is just sort of lying there in an inert state. When the issue occupies the spotlight and everybody is talking about taxes on TV every day, there's a chance those numbers can change. The GOP has been pretty adept these past 30 years at persuading middle-income people that massive tax cuts for the well-off are in their interests, so we'll just see.
Not touching the big entitlement programs just won't sell politically. It doesn't seem to me that it should be so difficult to say, now, if we're asking seniors and the poor to accept some sacrifice, then we have to ask our better-off citizens to accept some too. I'll be watching this week for how Obama says that and how much emphasis he places on it. If he tries to gloss over it, he'll be sending the signal that he's, uh, "open-minded" on the tax question. He has to put the revenue question at the heart of his package and presentation. Sometimes the only way to win to be willing to lose.
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April 9, 2011
No government shutdown, but what do we have instead? | Michael Tomasky
So we have a deal and a government, and the eighth-graders visiting Washington (by tradition in the US, it's in the eighth grade, or form as you call it, when students take their field trips to the capital) can go to the Smithsonian today. That's all nice.
Also nice is that the offensive (and offensive it was) against Planned Parenthood failed, so at least we haven't yet reached the point as a society that poor women must die of cervical cancer to satisfy the ideological itches of a few men, although fear not, we're getting there.
But the $38 billion cut is the largest single-year cut in the history of the country, according to the president, who taped a three-minute video statement shortly after 11 pm Friday night, when the deal was announced by Speaker John Boehner.
It'll be next week, I'd reckon, before we know exactly what was cut and by how much. As those details come out, an already disgruntled liberal base is just going to get angrier.
I understand what Obama is doing when he talks, as he does in the video, about the government needing to live within its means. I'm sure it polls well with independents, and as I've said many times, he needs to rebuild his standing among independents. We all get this.
But but but: to hear Obama kinda-sorta boasting about overseeing a domestic spending cut on a scale that even Ronald Reagan never managed leaves one wondering where and over what he might someday draw a line in the sand.
Last December, he signed George W. Bush's tax cuts. Then he introduced his own budget, which include a five-year pay freeze for federal employees and cut funding for a couple of subsidy programs for poor and elderly people.
Finally, during this whole process, he never once that I can remember made a forceful public statement singling out a GOP cut as severe or unwise, never defended family planning initiatives, never pointed to one thing and said, this I will not brook.
Yes, I understand, liberals are outnumbered. I'm more understanding of that than most liberals I know, believe me. And Republicans have power now, and they're extreme, and this is the way it's going to be for a little while at least. But any skillful politician can find ways to communicate to the middle and his base simultaneously. He just has to want to.
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April 8, 2011
Government shutdown blame game | Michael Tomasky
I confess, dear readers, that I have in part turned my attention to The Masters. Rory McIlory is amazing. Is he Catholic or Orange, does anyone know?
NBC is playing its poll from yesterday as a statement that a plurality of people blame Republicans, and technically that's true, but:
A plurality of 37 percent say they would blame congressional Republicans if the current budget disagreement leads to a shutdown of the federal government, while 20 percent say they would blame President Obama and another 20 percent would blame congressional Democrats.
Uh...that actually sounds like 40-37 to me. But it may be a fishy poll. I know that I would say this. But still. If respondents were given three choices, it's natural that blame would be distributed among the three. But it's true that even in polls where people are given two choices, the blame is spread pretty evenly.
But the real question is, where will blame fall if a shutdown actually happens? Because this is all hypothetical. I think the Dems have pretty good messaging on the abortion question, and the idea that the GOP is willing to shut the government because of this social issue, but I am aware that I would think that. In today's hyper-partisan environment, people's answers on these polls are probably mostly likely to reinforce their partisan predispositions.
So I wouldn't expect much fluctuations in these polls if a shutdown actually happens. But the small and calibrated fluctuations that do appear will be very important, because the fluctuations will represents how swing voters see things. There's about an 8% or 10% voting bloc in the middle that goes one way or the other, and their verdict on this is probably what will decide who gets the blame.
The verdict will have very little to do with the truth, per se, but with the message each party puts out, and how that message reinforces the party's known brand. Whether it makes intuitive sense to people.
In any case, this is not going to be a 60-40 slam dunk for Democrats. Prediction: The GOP will bear slightly more blame if it happens. The key thing in medialand is that "slightly." Will it be enough so that news shows say the GOP is at fault, or narrow enough that they'll say people blame both sides?
And one more question: Why haven't the Senate Democrats passed a bill saying they'll take no pay if a shutdown happens? Why haven't House Democrats pressed loudly for such a bill? Why hasn't Obama, a sorta-multi-millionaire, announced that he will take no pay if a shutdown happens? That would guarantee a huge spin victory. Sigh....
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Government shutdown updates | Michael Tomasky
Jon Kyl, Republican Senator of Arizona, is confused:
KYL: Everybody goes to clinics, to doctors, to hospitals, so on. Some people go to Planned parenthood. But you don't have to go to Planned Parenthood to get your cholesterol or your blood pressure checked. You go to Planned Parenthood to get an abortion, and that's well over 90 percent of what Planned Parenthood does.
Of course the opposite is the case. I wrote yesterday that abortion services amount to 10% of PPFA's services. Today they're saying it's 3%. Whichever, 10% or 3%, it's small. Kyl said the exact opposite. I'm sure that once he's made aware of the truth, he'll take to the Senate floor and correct the record, right?
Meanwhile, the Senate Democrats are indeed passing their own one-week continuing resolution sometime today:
Republicans in the House passed a one-week measure Thursday that would slash another $12 billion in spending and fund the Pentagon for the rest of the fiscal year.
Leadership sources say the Democrats' proposed bill will maintain the levels of the continuing resolution set to expire Friday at midnight, a measure that contained $6 billion in cuts. It will likely include military funds, the details of which are not yet decided.
Likely? I'd have thought that that was the whole point, to insulate themselves from GOP charges that they don't care about the troops. According to The Hill, Chuck Schumer says the Democratic bill will include funding for the front-line troops in the hot spots, but not a full Pentagon appropriation for the rest of the year, as the GOP bill did. Politically, covering the front-line soldiers is enough.
Note also that the Democratic CR still contains budget cuts, $6 billion worth. So even the Democrats are making cuts.
Note also, and this is important for perspective's sake, that the number they've now agreed on is $38 billion, which is $6 billion more than the original Republican budget cuts requested back in February. They've won. But they want to lose. So let 'em.
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Magic in Wisconsin | Michael Tomasky
Do you believe in magic in a young girl's heart? How the recanvass can free her, whenever it starts? And it's magic, if the new totals are groovy...
Yes! The "girl" in question is Republican County Clerk Kathy Nickolaus of Waukesha County, Wisconsin. From Think Progress:
Last night, Republican Waukesha County Clerk Kathy Nickolaus rocked Wisconsin's Supreme Court election by claiming that she had suddenly found 14,315 lost votes in the most conservative county in the state. If these newly discovered votes are legitimate, they give incumbent conservative Justice David Prosser a more than 7,500 vote lead — a number that almost exactly matches the margin he needs to avoid a recount at the state's expense.
Interesting, no? Wait! More interesting: Prosser is Nickolaus' former boss. The magic never stops.
Statement from state assembly minority leader Peter Barca, a Democrat:
The way Waukesha County Clerk Kathy Nickolaus revealed her discovery of 14,300 previously uncounted votes raises disturbing questions, particularly in light of her past partisan history. She has been the subject of multiple complaints from other Waukesha officials on how she handles elections and keeps public information to herself outside the official county system where others can verify it.
The new Supreme Court race vote totals she "discovered" during canvassing not only swung the election but also put the race just barely past the amount needed to trigger a state-financed recount.
It is especially troubling that she waited more than 24 hours to report the startling discovery and then did so at a press conference and only after she verified the results. This makes it all the harder to challenge and audit the integrity of the vote.
The partisan, political history of Ms. Nickolaus and the serious concerns about the quality of her performance found in an audit raises the question of whether an investigation is warranted. The public deserves to know that the votes were counted properly.
Barca, probably a typical secular liberal, clearly doesn't believe in miracles.
Maybe it was an honest mistake. And if so, Prosser won. Partisanship aside I would not want the good people of Brookfield, Wisconsin not to have their votes counted. If that's what happened, that's what happened.
I don't want to be a conspiracy theorist. But you have to be a dedicated coincidence theorist to believe that there's nothing odd that it just so happens that the found votes exist in precisely the amount that would moot a recount.
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The shutdown and tax revenue and the top 400 | Michael Tomasky
As we discuss thirty-odd billion in cuts that will largely impact poor people most directly, let's step back and permit ourselves to be reminded of the big picture, with help from Jesse Drucker of Bloomberg Business Week:
For the 400 US taxpayers with the highest adjusted gross income, the effective federal income tax rate – what they actually pay – fell from almost 30% in 1995 to just under 17% in 2007, according to the IRS. And for the approximately 1.4 million people who make up the top 1% of taxpayers, the effective federal income tax rate dropped from 29% to 23% in 2008. It may seem too fantastic to be true, but the top 400 end up paying a lower rate than the next 1,399,600 or so.
That's not just good luck. It's often the result of hard work, as suggested by some of the strategies in the following pages. Much of the top 400's income is from dividends and capital gains, generated by everything from appreciated real estate – yes, there is some left – to stocks and the sale of family businesses. As Warren Buffett likes to point out, since most of his income is from dividends, his tax rate is less than that of the people who clean his office.
A 17% effective rate. That's less than I pay, and I'm pretty sure it's less than you pay. I really wonder, conservative commenters, does this strike you as fair? Does this not bother you even a little?
Trillions of dollars have been sacrificed over these last three decades to an economic theory (supply-side) that has demonstrably not worked as advertised, ever: Ronald Reagan grasped this by 1983 and started raising taxes, which he did seven or 11 times, depending on what you count. George W Bush would not acknowledge it, and the deficit skyrocketed as revenues did indeed drop, and dropped significantly. Here's the skinny, from Bruce Bartlett.
Bear in mind also last December's tax deal, keeping the Bush-era rates in effect for all categories of payers. Keeping the Bush rates for the upper-bracket payers cost us (yes - us!) $40bn this year. Funny, no? Just about the same amount that's being cut this week. The GOP would still be pushing for cuts, of course, but having that extra $40bn would nevertheless come in handy and at least signal that there was a certain reciprocity in play.
Ngavc and other conservative commenters like to thunder that the current course is unsustainable. I agree with that. But I say that revenue is a part of getting to sustainability. Washington won't discuss revenue. Warren Buffet shakes his head, and continues, understandably, to pocket the dough.
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Government shutdown: tick tock, tick tock... | Michael Tomasky
Well, it's the eleven-and-a-halfth hour here on the government shutdown. Politico has a piece about Barack Obama's penchant for stepping into negotiations at the last minute and getting things all sorted out, as he's done on healthcare and the tax deal last December. Which raises the question: do he and his people really think those were fantastic outcomes? HCR was a win, but a highly pyrrhic one, and the tax deal was horrible.
I'm surprised that the conventional wisdom so far seems to be that the House GOP budget passed yesterday doesn't matter very much. That bill would fund the Pentagon for the rest of the year, but the non-Pentagon government for just one week, while cutting $12 billion out of it for that single week (pro-rated, a $624 billion cut, or about $100 billion more than the entire 2010 non-defense discretionary budget, which you can see here). It passed 247-181 with 15 moderate and conservative Democrats voting for it, and six interesting Republicans voting against; otherwise, party line.
I think it was a very clever move, and here's why.
In the event of a shutdown, soldiers, even those on the front lines, don't get pay. They have to keep "going to work" of course. They'll be paid retroactively once there's a deal, which is better than most civil servants might have it (although in fact, 1995-96, your typical "non-essential" federal worker wasn't supposed to get retroactive pay, but Congress eventually decided to pay everyone).
I don't know whose brilliant idea it is that front-line soldiers not be paid. Just civil-service rules I suppose. Still, it's damn smart of the Republicans to think of it, and it permits to caterwaul about how Obama and the Democrats hate the troops etc. Do you think anyone in the Democratic Party will stop and remind voters that back in December 2009, in order to stop the progress of the healthcare bill, Senate Republicans filibustered a bill providing funding for troops, thereby "playing politics with our soldiers' lives"? Why am I even asking that question?
And why didn't the Senate Democrats think of this two days ago, say, and pass a bill that funded the troops for the rest of the year without any cuts, so they'd have put it on the table? For that matter, they can still do it today if they want to, and they'll be insulated from the anti-troops charge. But maybe they assume voters will see the House GOP bill as a gimmick. Maybe. But today, Obama is going to veto a bill funding the troops, and he has to argue that it came with unacceptable conditions and explain what those conditions were. [Update: This last part is wrong, as smartypants54 points out in comments. The Senate won't pass this, so it won't reach Obama's desk. Not enough coffee, writing too fast. Apologies.]
It won't matter if there's a deal, obviously. The two sides aren't that far apart in money terms. It's the Planned Parenthood question, and the one about whether the Environmental Protection Agency can regulate carbon. Those will never fly with the Democrats, especially the former. A cut to PPFA would be one thing. But total elimination of federal funding? Never. If that really is a condition of a deal as far as the R's are concerned, then shutdown here we come.
And if it isn't really a condition and we get a deal, then Boehner will have a mini-mutiny on his hands. You may already have seen this poll, which made the rounds yesterday afternoon. Democrats and independents surveyed here would rather that the D's strike a deal than stick to their principles. Republicans surveyed would rather that GOP lawmakers stick to their guns. Explains a lot. Explains everything really.
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April 7, 2011
Government shutdown and...abortion? | Michael Tomasky
Why is the government maybe about to shutdown over...abortion and clean air? What?
The abortion question is Indiana Republican Jihadist Mike Pence's war on Planned Parenthood. A while back, you see, he introduced a resolution defunding Planned Parenthood's participation in federal family planning initiatives (a set of laws that date back to Republican Richard Nixon). These services treat 5 million women a year, about three-quarters at or below 150% of the federal poverty line. Planned Parenthood Federation of America provides, yes, abortion services, but loads of other things: cervical cancer screening, breast cancer screening, general reproductive health. Six in 10 women who visit a PPFA clinic don't have a family doctor. PPFA is it.
PPFA received federal money for these things. It does not allocate any federal money to abortion services. Joan Walsh in Salon today, in response to Pence's statement on morning TV that he'd personally shut down the government over PPFA funding:
Pence is lying, and he knows it. Not a dime of government funding goes to Planned Parenthood to provide abortions. The group has a separate organization, with separate staff in separate buildings, all with private funds, to provide abortion services.
Abortion services, incidentally, account for about 10% of what PPFA does. The rest, as I said, falls in the broad category of women's preventive health. No sane person disagrees that we need more preventive healthcare in the US. One of the truly messed up things about our employer-based healthcare system is the way an individual is passed off from this employer (and insurer) to that one as he changes jobs. In other words, the company that insures the person when he's 28 has zero incentive to provide preventive care because the company knows it is unlikely to be insuring the person when he's 58 - that is, the company won't reap the long-term benefits of shelling out for preventive care. But PPFA doesn't worry about that. You walk in their door, you get healthcare, and you don't pay a thing if you can't.
Defunding PPFA will in fact increase abortions in all likelihood. The group provides family planning and birth control counseling and services for 2.5 million mostly poor women a year. Without that service, does it not stand to reason that some of those women will make the mistake of having unwanted pregnancies, and that they will abort? Of course it does. PPFA calculates that in 2009 it helped prevent 612,000 unwanted pregnancies.
It makes no sense but it's not supposed to. It's just part of a ideological crusade. Pence has been after PPFA for years, and now he's got a cohort of ideological fellow travelers willing to back him up.
I also see this as part of a wider war not only against abortion per se, but against groups that tend to be identified with the Democratic Party and its candidates. PPFA's political activity doesn't amount to huge dollars but of course it's almost all done in support of Democrats.
Not so long ago I had the opportunity to sit down with Cecile Richards, PPFA's president, who laid out the stakes and described the many ways in which GOP success here would damage healthcare for working-class and poor women in the US. "It's impossible to overstate the havoc it will wreak in the healthcare system if they take Planned Parenthood out of women's healthcare," she said. "It's terrible healthcare policy, and it's terrible fiscal policy." This is true too: a dollar of spending on preventive healthcare typically saves $3 or $4 down the road.
It's disgraceful. And I think, and hope, it's stupid politics. I just don't think it would make sense to your average middle-of-the-road person that the budget couldn't pass because of abortion.
But this really is one of those cases where the politics is secondary. Thousands of women a year walk into PPFA clinics, learn they have breast or cervical cancer or some other issue, and have it treated. In Pence world, they won't.
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Government shutdown, the (non) fine print | Michael Tomasky
It appears that the two parties are about $10 billion away from a deal to avert a government shutdown. WashPost:
The two sides have already approved $10 billion in reductions, and Democrats have identified about $13 billion more, aides said. The biggest sticking point: Democrats have demanded that some of the cuts come from one-year reductions in such programs as Pell grants and farm subsidies. Republicans have resisted because such cuts would not permanently reduce the size of the government.
To reach his new request for $40 billion in cuts, however, Boehner will eventually have to go along with at least some one-time reductions, aides from both parties said.
These so-called "one-shots" are a budgeting trick that go back at least 25 or 30 years. Usually one-shots are about revenue - a one-time fee on some commercial enterprise or real-estate condemnation or something like that. But in Washington we don't discuss revenue, so now they're about stealing opportunity away from working-class kids to get to college so millionaires can pay less in taxes.
The other disturbing thing about the above excerpt is that the second paragraph seems to imply that the Dems are ready to give John Boehner $40 billion in cuts. I say, what? The deal was $33 billion. Then Monday night Boehner changed that unilaterally. So the D's are going to cave on that?
Finally, there's the question of the "riders," the things that have little to do with money per se and everything to do with ideology. This mostly means the GOP attack on Planned Parenthood. This is truly a scandal. I will write a post about why later today.
It's hard to get details out of newspapers, which are at their most frustrating in situations like these. By the conventions of newspaper writing, you still have to use up your first six grafs quoting pols blowing smoke. What public purpose do those gaseous quotes serve? They enlighten no one. Get to the facts, say I. Those two grafs I quote above from today's WashPost piece are the only two that have anything resembling actual facts, and they're the last two grafs of the article.
Anyway, I guess it's nice to think that maybe a shutdown is avoidable, but if the final number is $40 billion, the Democrats got taken to the house, and it's doesn't matter how the number was arrived at.
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