Tag Archives: Bush Tax Cuts

January 5, 2013 · 6:17 PM

What The GOP Doesn’t Want You To Know About The Deficit

The Huffington Post

1.   The Deficit Has Grown Mostly Because Of The Recession

The deficit has ballooned not because of specific spending measures, but because of the recession. The deficit more than doubled between 2008 and 2009, as the economy was in free fall, since laid-off workers paid less in taxes and needed more benefits. The deficit then shrank in 2010 and 2011.

2.   The Stimulus Cost Much Less Than Bush’s Wars, Tax Cuts

Republicans frequently have blamed the $787 billion stimulus for the national debt, but, when all government spending is taken into account, the stimulus frankly wasn’t that big. In contrast, the U.S. will have spent nearly $4 trillion on wars in the Middle East by the time those conflicts end, according to a recent report by Brown University.  The Bush tax cuts have cost nearly $1.3 trillionover 10 years.

 3.   The Deficit Grew Under George W. Bush

When George W. Bush took office, the federal government was running a surplus of $86 billion. When he left, that had turned into a $642 billion deficit.

4.   The Deficit Is Shrinking

Last year’s federal budget deficit was 12 percent lower than in 2009, according to the Office of Management and Budget.The deficit is projected to shrink even more over the next several years.

5.   Investors Are Paying Us To Borrow Money

The interest rate on 10-year Treasury bonds is negative, according to the Treasury Department. Investors are even paying us for 30-year Treasury bonds, when adjusted for inflation.

 6.  Investors Are Not Running Away

Conservative commentators have been warning for years that investors will run away from Treasury bonds because of the national debt. So far it’s not happening. Interest rates on Treasury bonds continue to hover at historic lows.

7.  Health Care Reform Reduces The Deficit

Republicans have blasted the Affordable Care Act as “budget-busting.” But health care reform actually reduces the deficit, according to the Congressional Budget Office.

8.  The U.S. Is Borrowing Less From China

The U.S. government is borrowing much less from foreign countries than before the recession, according to government data cited by Paul Krugman. That is because the U.S. private sector is financing our bigger deficits.

9.   We Spend A Lot On Defense

Defense spending constituted 20 percent of federal spending last year, or $718 billion, according to the Center on Budget and Policy Priorities. This adds up to 41 percent of the world’s defense spending, according to Bloomberg TV anchor Adam Johnson. Mitt Romney has vowed to not cut defense spending if elected president.

10.   We Spend A Lot On Health Care

Health insurance, including Medicare and Medicaid, constituted 21 percent of federal spending last year. In contrast, education constituted 2 percent of federal spending. Meanwhile, Mitt Romney and Paul Ryan have promised not to change Medicare for Americans age 55 and older.

11.   Republicans May Want Large Deficits For Now

The federal budget deficit ballooned under Ronald Reagan, and that may be just the way Republicans like it. Some Republican thinkers have proposed “starving the beast”: that is, cutting taxes in order to use larger deficits to justify spending cuts later. Since Republicans ultimately want lower taxes and a smaller government, what better way is there to cut spending than to make it look urgent and necessary?

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December 6, 2012 · 8:22 AM

5 political realities about the ‘fiscal cliff’

It’s rather difficult to keep up with all the rhetoric about the “fiscal cliff”.  The Week attempts to put it all in to perspective…

The Week

As you wade through the often confusing political posturing over the impending expiration of the Bush tax cuts and the automatic budget “sequester,” consider the following political dynamics that will determine the outcome.

1. President Obama’s swagger. More than just a post-election glow, Obama has actual leverage over Republicans, and he is not going to waste it. Some pundits say that Obama’s newly confident negotiating posture is the result of lessons learned during the first term wrestling over the debt limit and budgets: He could offer the farm for free and Republicans wouldn’t accept it. But Obama was genuinely constrained by the political realities of the time, much more so than he is today. The economy was in a more precarious state; the options Obama had for stimulus were few; his own party was under assault from the Tea Party movement over deficit spending, and the health care battle had exhausted Hill Democrats. Today, Obama can afford to be more confident. He has no re-election ahead of him; his time threshold for action is much longer. The economy is better.

2. Americans support Democratic policies. To be fair, Americans supported Democratic policies during the last round of these fights; a balanced approach to deficit reduction that supported taxing the wealthy more while slowly reducing the deficit relative to the size of the economy. But the election was in many ways an explicit referendum on economic policy. The Democratic candidate ran on the issue of raising tax rates (or letting the Bush rates for upper-income earners expire), where Republicans ran on significantly cutting spending.  Obama could not marshal public opinion that was already in his favor before; it is much easier for him to do so now.

3. John Boehner wants a decent legacy. If Boehner were to retire today, he would be an historical irrelevancy: a decent man in over his head who could not herd cats, much less his own conference. A decent legacy means a deal. A deal means compromise in the end.  Boehner has a lot to do before he can compromise. He will absolutely be within his rights to represent the opinions of Republicans until the last minute; at that point, he will either become a Speaker with a legacy worth recognizing, or he will be redundant.

4. Democrats have more wiggle room. Where Republicans are constrained by the Norquist tax pledge and by the unpopularity of their specific tax cut proposals, Democrats have the following political/policy factors working in their favor: (a) Obamacare slowed the growth of Medicare spending, as Mitt Romney knows full well; (b) the Democratic caucus is more amenable to further adjustments to Medicare and Medicaid than they are willing to publicly admit; and (c) the tax cuts expire automatically.

5. Obama’s  proposal is not that radical. The economy needs continued stimulus, and Obama has merely proposed very, very creeping austerity. The expiring tax cuts will raise revenue, but aside from unemployment insurance extensions and arguing for a renewal of his payroll tax cuts, he’s proposed only $50 billion worth of additional immediate spending. The rest of the “more” will come in very slowly and it will be offset by cuts. Republicans can take some solace knowing that the table they set in 2010 (or, you could argue, by hastening the economic collapse in 2008), Obama’s best option is probably adequate at best from an historical perspective.

So — what do these factors tell us about the chances of a deal? I’d say there’s a pretty decent chance of one. It is hard to see Republicans rolling over and becoming Keynesians, agreeing to significant new stimulus and abandoning their appetite for spending reductions. But it is hard to see how the year begins with a $2,000 tax hike for middle class Americans.  It is true that Washington knows what to do; they haven’t figured out how to do it just yet.

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June 14, 2012 · 5:02 PM

5 Reasons Americans Are Right To Blame Bush For The Economy

I’m not sure why this hasn’t been addressed by conservative or progressive news media before now.  However, better late than never…

Think Progress

Sixty-eight percent of Americans — including 49 percent of Republicans — say President George W. Bush is responsible for the state of today’s economy, a new Gallup poll finds.

Indeed, the country is still reeling from Bush’s disastrous economic stewardship. His irresponsible tax cuts and deregulatory policies have contributed significantly to the slow recovery and are partly responsible for the nation’s economic plight. Here are 5 reasons why:

1. Deregulated Wall Street: It was a great time to be a Wall Street executive during the Bush administration. Sweeping financial deregulation helped build the housing bubble and allowed financial institutions to pursue risky trades unchecked. In fact, Bush eliminated the rules that allowed Wall Street to cause the financial crash that plunged the nation into the Great Recession.

2. Cut Taxes For The Wealthy: The Bush tax cuts — over 50 percent of which benefited the richest 5 percent of American taxpayers — cost about $2.5 trillion over the decade after they were enacted. Ten years later, Bush’s tax cuts are still the main driving factor of the national debt:

3. Ran Up A Tab On Two Wars: The wars in Iraq and Afghanistan have cost the country trillions of dollars. Combined with Bush’s tax cuts, war spending was amain factor in blowing up the deficit and spending the surplus accumulated under Clinton. Lawmakers now use the deficit as an excuse for inaction.

4. Left Homeowners In A Lurch: While Bush was happy to help out the banks in the wake of the housing crisis, he did little to assist struggling homeowners.Hope For Homeowners, Bush’s proposal to assist those struggling with their mortgages, was a colossal failure; in its first six months, it helped just one homeowner renegotiate his mortgage. Many mortgage holders — 15.7 million or, one in three — are still underwater today.

5. Weakened Workers: Bush weakened worker safety regulations and collective bargaining rights under the Occupational Safety and Health Administration (OSHA) and the Department of Labor throughout his time in office. Today, corporations are back to making record profits, while workers’ incomes are falling.

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June 10, 2012 · 5:13 AM

Why 2012 Matters

NYR Blog

Republican operatives describe this year’s presidential election in apocalyptic terms. It will determine our future. It will seal our national fate. Well, they are probably right, but not for the reason they give. They tell Republican voters that President Obama, in a second term where he does not have to face re-election, will reveal and follow the full socialist agenda he has been trying to hide.

Only the gullible will swallow that. But the right does know that the future is at stake. That is because this election year gives Republicans one of their last chances—perhaps the very last one—to put the seal on their plutocracy. They are in a race against time. A Democratic wave is rising fast, to wash away the plutocracy before it sets its features in concrete, with future help from the full (not just frequent) cooperation of the Supreme Court.

It may seem odd to speak of the plutocracy as endangered. Surely it has established itself in every important political arena. Wealth is concentrated in a small fraction of the populace, the cosseting of whom with the Bush tax cuts plunged us into the great recession. Yet while the rest of the populace was suffering, the rich just got richer. In 2009 and 2010, years in which millions were unable to find work, the top one percent reaped 93 percent of the “recovery” income, and corporations are making more than they ever did. And the Republicans can still propose even further cuts in the taxes of “job creators” whose only job creation has been for their own lawyers and lobbyists.

Continue reading here…

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April 3, 2012 · 3:28 PM

Repealing ‘Obamacare’ Would Explode Debt, Says Government Auditor

Repealing ‘Obamacare’ Would Explode Debt, Says Government Auditor

I just wonder how the GOP in Congress can be so myopic when it comes to the Affordable Care Act and its overall capacity to insure millions of Americans?  In an effort to make Barack Obama a “one-term president” they seem to not care about the debt and what repealing the ACA would do to it.

TPMDC

A new report by an independent government auditor concludes that implementing President Obama’s health care law as intended will make a significant dent in the long-term debt forecast.

The report comes as Supreme Court justices weigh striking some of “Obamacare’s” central provisions — and perhaps the law in its entirety — and as the Republican Party remains committed to repealing the law if it seizes control of government in November.

“[I]f the Patient Protection and Affordable Care Act (PPACA) is implemented as intended it would have a major effect on the [fiscal] gap but would not eliminate it,” the Government Accountability Office wrote in a Monday report — a conclusion in line with its own past research and similar research conducted by other government and non-government analysts.

GAO doesn’t isolate PPACA’s stand-alone contribution to long-term budget consolidation. But it does conclude that if key cost-control measures in the law, and other automatic cuts to Medicare spending baked into current law, are ignored, or overridden by Congress, the implications for the national debt are vast.

If “Obamacare” is implemented as intended, and other measures, such as automatic payment cuts to Medicare physicians, take effect, “spending on Medicare and Medicaid grows from 5 percent of GDP in 2010 to over 7 percent by 2030.”

By contrast, if Congress overrides those provisions, “[s]pending on health care grows much more rapidly under this more pessimistic set of assumptions,” according to the report. “Absent changes to these programs, spending on Medicare and Medicaid under the Alternative simulation grows to over 8 percent of GDP by 2030.”

Congress has consistently passed temporary legislation to prevent Medicare doctors from experiencing a pay cut baked into current law. But the current patch expires on Jan. 1 — along with the Bush tax cuts and the payroll tax holiday — just as other automatic cuts to Medicare are set to take effect as a penalty for the Super Committee’s failure to pass deficit-cutting legislation.

The confluence of these fiscal triggers suggests lawmakers will be forced to act quickly after the election to put the country’s budget on a more sustainable path. But if Republicans win big in November and move ahead with their plan to repeal the health care law, they’ll only make matters worse.

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February 29, 2012 · 5:26 AM

Four Fiscal Phonies

The amazing hypocrisy of the remaining GOP candidates is astonishing.

They all tout their tax plans as being better than Obama’s and each praises their tax plans as being fiscally responsible and will save money in the long run…NOT!

The New York Times – Paul Krugman

The Committee for a Responsible Federal Budget – not my favorite people, but they can do their arithmetic – has put together evaluations of the four remaining GOP candidates’ tax and spending plans. Annoyingly, however, they compare these plans to a so-called “realistic baseline” that assumes, among other things, that all the Bush tax cuts are made permanent. So for all the talk of the urgency of deficit control, the need to cut basic social insurance programs, the CRFB is in effect willing to accept as a fait accompli the biggest, most gratuitous budget-busting action of the past couple of decades.

How to fix this? One way would be a current-law comparison, which would involve allowing all the Bush tax cuts to expire. But it also seems to me useful to compare the Republican plans with the Obama administration’s plan, which would at least allow the high-end tax cuts to expire. How does debt under this plan compare with the four Republicans?

Well, here’s debt as a percentage of GDP in 2021 (using the OMB numbers(pdf) for Obama and CRFB for the others):

Yep: as Republicans yell about Obama’s deficits and cry that we’re turning into Greece, Greece I tell you, all of them, all of them, propose making the deficit bigger.

And for what? For reverse Robin-Hoodism, taking from the poor and the middle class to lavish huge tax cuts on the rich.

And I believe that all of them know this, too. It’s pure hypocrisy – and it’s all in the service of class warfare waged on behalf of the top 0.1 or 0.01 percent of the income distribution.

Edit: Emphasis are mine

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February 15, 2012 · 7:45 AM

Ten Facts About The Obama Budget

Let’s see how the GOP will respond to “The Obama ‘populous’ Budget”.

Think Progress

President Obama unveiled his budget for fiscal year 2013 this morning in Virginia, touting it as a budget that took a balanced approach toward investigating in American economic growth now while reducing the nation’s deficit over the long-term. The budget is a step in the right direction, using both tax increases and spending cuts to cut the deficit and investing in infrastructure and other job creation measures to continue the economic recovery.

Like any budget, Obama’s is complicated, containing investments and cuts to various programs. With that in mind, ThinkProgress compiled 10 facts about the Obama budget based on the White House fact sheet and other reports:

1. The budget includes $350 billion in short-term measures to encourage job growth, including $50 billion in immediate infrastructure investment, $30 billion to rebuild schools, and year-long extensions of the payroll tax holiday and unemployment insurance.

2. The implementation of the Buffett Rule and the repeal of the Bush tax cuts for the wealthy helps reduce the deficit by $1.5 trillion over the next 10 years.

3. For every $1 in new revenue from those making more than $250,000 per year and from closing corporate loopholes, the budget has $2.50 in spending cutsincluding the deficit reduction enacted over the last year.

4. The total budget reduces the deficit by $4 trillion over the next decade.

5. Obama preserves the maximum Pell Grant award, a key difference from the GOP budget, and makes permanent then Americans Opportunity Tax Credit, which helps 9 million families afford the costs of college.

6. Unlike the last two GOP budgets, Obama’s budget protects Medicare and Medicaid from structural changes, and through small tweaks, saves $360 billion from those programs.

7. States will receive $30 billion in aid to prevent further layoffs of firefighters, teachers, and police officers, some of the hardest-hit workforces in the nation.

8. The budget eliminates 12 tax breaks to oil, gas, and coal companies, saving $41 billion over 10 years.

9. Obama preserves planned cuts to the Defense Department negotiated in the debt limit deal last August.

10. The budget maintains goals of putting one million electric vehicles on the road by 2015; doubling share of electricity from clean energy sources by 2035; and reducing buildings’ energy use by 20 percent by 2020.

As the Center for American Progress’ Michael Linden notes, Obama’s budget is far from perfect. It’s spending caps are too low, it’s defense cuts are too small, and it contains less new revenue than bipartisan plans like Simpson-Bowles and Rivlin-Domenici. But it prioritizes job creation and economic development and keeps America on the path to recovery, something Republican plans, unfortunately, fail to do.

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January 29, 2012 · 9:26 PM

Norquist: Republicans Will Impeach Obama If He Doesn’t Extend Bush Tax Cuts

This is absurd.  The GOP will stop at nothing to harass, humiliate and blackmail President Obama into conceding to their demands.

However, throwing around the word “impeachment” is mere hyperbole since they would need a majority in the Senate to succeed and although it may be by the narrowest of margins, the GOP do not have that majority and won’t have it in the near future.

Think Progress

Anti-tax activist Grover Norquist has long held a tight grip on the marionette strings of the GOP. Wielding undue influence as the head of the Americans for Tax Reform, Norquist ensures that Republican lawmakers sign his anti-tax pledge and threatens them with electoral defeat  should they even think of deviating from it. Norquist has marked a successful few years, killing the deficit super committee agreement,batting down  a tax increase on millionaires, and, of course, ensuring the extension of the Bush tax cuts.

Pleased with his headway, Norquist is now mapping out how he can ensure further anti-tax victories by securing Republican majorities. In an interview with the National Journal, he mused that a GOP mandate would obviously enact an extension of the Bush tax cuts, work to maintain a repatriation holiday for corporate profits, and even pass House Budget Chairman Paul Ryan’s (R-WI) plan that jeopardizes Medicare. But when asked what Republicans should do if faced with a Democratic majority that won’t keep the tax cuts, Norquist had a simple answer: “impeach” Obama .

NJ: What if the Democrats still have control? What’s your scenario then?

NORQUIST: Obama can sit there and let all the tax [cuts] lapse, and then the Republicans will have enough votes in the Senate in 2014 to impeach. The last year, he’s gone into this huddle where he does everything by executive order. He’s made no effort to work with Congress.

Norquist certainly revels in his power , but suggesting Republicans impeach the president over tax cuts is wildly outlandish. According to the constitution , the president, vice president, or public officials can only be impeached for “treason, bribery, and other high crimes and misdemeanors.” Preserving a tax cut that gives more to the top 1 percent than the average income of the 99 percent hardly qualifies. But if Norquist’s only goal is to “crush the other team ,” it seems he’ll stop at nothing to do so.

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November 2, 2011 · 3:09 AM

CHART OF THE DAY: Rick Perry Proposes A Tax Plan Aimed At The One Percent

TPMDC

Recall that Rick Perry’s so-called “flat tax” plan isn’t flat at all, but rather an alternative tax system that would constitute a massive tax cut for the rich. For people above a certain income, his plan would be worth opting into, and for the rest of earners, it would make sense to stay in the current tax system.

The Tax Policy Center has posted data neatly illustrating this bug (or feature, depending on your point of view). Here it is in handy graph form.

(H/T: Kevin Drum)

Above about $200,000 a year in income, Perry’s plan would be hard to refuse. Once you exceeded that threshold, your effective tax rate would actually drop modestly, falling below people who make less money than you, and more still the richer you get. It would be like codifying the opposite of the Buffett Rule.

That’s true whether you assume the current Bush tax rates and other tax policies remain in effect permanently for the non-rich, or whether they expire, as scheduled by law.

Continue reading here…

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August 27, 2011 · 9:17 PM

Constituents Jeer Rep. Dan Lungren’s (R-Ca) Support Of Bush Tax Cuts For The Rich

New official photo of Rep. Dan Lungren (R-CA 3rd).

Image via Wikipedia

It’s good to see the American People shedding their myopia and getting to see what the real GOP/Tea Party is like…

Think Progress

 At a town hall last Wednesday attended by ThinkProgress, Rep. Dan Lungren (R-CA) was asked why he supports the Bush tax cuts for the wealthy since America has lost millions of jobs since its passage. When Lungren deflected, saying that everyone benefits from the Bush tax cuts and that Obama supported extending them, several people began jeering him. Lungren, who at one point threatened to leave the Carmichael town hall, said he doesn’t know of any economists who support raising taxes during a recession. Ironically, that same day the National Association for Business Economics releaseda study showing nearly three quarters of business economists stating they support raising revenues through taxes:

LUNGREN: Obama extended the tax cuts for several more years [...]

CONSTITUENT: You use the deficit ceiling to blackmail! That’s what you did. [...]

LUNGREN: I know of no economists who suggest we ought to raise taxes in the midst of a down turn in the economy.

Watch it:

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