The Tea Party's First Victory

[onthebottom]

I've tended to shy away from posting oped articles of late but this one I agree with completely and thought it would allow the usual suspects to get their hyperbole off.....

OTB

The Tea Party's First Victory
Obama opposes spending cuts right up to the time he calls them historic.

This is getting to be a habit. President Obama ferociously resists tax cuts, trade agreements and spending cuts—right up to the moment he strikes a deal with Republicans and hails the tax cuts, trade agreements and spending cuts as his idea. What a difference an election makes.

This is the larger political meaning of Friday's last minute budget deal for fiscal 2011 that averted a government shutdown. Mr. Obama has now agreed to a pair of tax cut and spending deals that repudiate his core economic philosophy and his agenda of the last two years—and has then hailed both as great achievements. Republicans in Washington have reversed the nation's fiscal debate and are slowly repairing the harm done since the Nancy Pelosi Congress began to set the direction of government in 2007.

***
Yes, we know, $39 billion in spending cuts for 2011 is less than the $61 billion passed by the House and shrinks the overall federal budget by only a little more than 1%. The compromise also doesn't repeal ObamaCare, kill the EPA's anticarbon rules, defund Planned Parenthood, reform the entitlement state, or part the Red Sea.

On the other hand, the Obama-Pelosi Leviathan wasn't built in a day, and it won't be cut down to size in one budget. Especially not in a fiscal year that only has six months left and with Democrats running the Senate and White House. Friday's deal cuts more spending in any single year than we can remember, $78 billion more than President Obama first proposed. Domestic discretionary spending grew by 6% in 2008, 11% in 2009 and 14% in 2010, but this year will fall by 4%. That's no small reversal.

The budget does this while holding the line against defense cuts that Democrats wanted and restoring the school voucher program for Washington, D.C. for thousands of poor children. Tom DeLay—the talk radio hero when he ran the House—never passed a budget close to this good.

The political gains are also considerable. When Mr. Obama introduced his 2012 budget in February, he proposed more spending on his priorities in return for essentially no cuts. Two months later, the debate is entirely about how much spending to cut and which part of government to reform. Democrats were forced to play defense nearly across the board, obliged to defend programs (National Public Radio) that were once thought to be untouchable shrines of modern liberalism.

Republicans also showed they are able to make the compromises required to govern. We realize that "governing" can often be an excuse for incumbent self-interest. But this early show of political maturity will demonstrate to independents that the freshmen and tea party Republicans they elected in November aren't the yahoos of media lore. A government shutdown over a spending difference of $7 billion and some policy riders would have made the GOP look reckless for little return.

Now the battle moves to the debt ceiling increase and Paul Ryan's new 2012 budget later this year, and there are lessons from this fight to keep in mind. One is to focus on spending and budget issues, not extraneous policy fights. Republicans have the advantage when they are talking about the overall level of spending and ways to control it. They lose that edge when the debate veers off into a battle over social issues.

We certainly agree that, amid a $1.5 trillion deficit, taxpayer funding for Planned Parenthood is preposterous. Let George Soros or Peter Lewis spend their private fortunes to support the group's abortion counseling. But Mr. Boehner was wise to drop the provision on Friday rather than let Mr. Obama portray a shutdown as a fight over abortion rights. If Republicans want to win this fight in the coming months, they need to convince voters that Planned Parenthood funding is a low fiscal priority, not make it seem as if they want to use the budget to stage a cultural brawl.

This point is especially crucial in the looming showdown over increasing the debt limit. Mr. Obama will marshal a parade of Wall Street and Federal Reserve worthies predicting Armageddon if the debt limit isn't raised as early as mid-May. Republicans will play into his hands of they seek to load up any debt limit increase with policies unrelated to spending and debt reduction.

The best advice we've heard is from former Senator Phil Gramm, who says Republicans should agree that families and nations should always honor their debts. But in doing so they should also make sure they won't pile up new debt. For a family, that means cutting up the credit cards. For Congress, it means passing budget reforms that impose hard and enforceable limits on new spending and debt.

We are not talking here about that hardy perennial, a balanced budget amendment to the Constitution, that would easily become a lever for Democrats to push for higher taxes. Far better would be statutory limits on spending increases and debt as a share of GDP, sequesters that automatically cut spending if Congress exceeds those limits, supermajority rules for replacing those limits, and revisions of the budget baseline so that each year's budget begins at last year's spending levels, not with automatic increases.

This is the kind of reform the public will understand is directly related to the debt limit, and one that Senate Democrats and Mr. Obama will find hard to oppose. Republicans should waste no time starting to explain their debt-limit terms, so voters also understand the GOP isn't toying with default as a political ploy.

***
One of the ironies of Friday's budget deal is that it is being criticized both by Ms. Pelosi and some conservative Republicans. We can understand Ms. Pelosi's angst. But conservatives are misguided if they think they could have done much better than Mr. Boehner, or that a shutdown would have helped their cause. Republicans need to stay united for the bigger fights to come this year, and for now they and the tea party can take credit for spending cuts that even Mr. Obama feels politically obliged to sell as historic.



http://online.wsj.com/article/SB10001424052748704390604576253281066078842.html?mod=rss_opinion_main

 

[blackrock13]

Can you say Saw Off. That's all, that's it.

 

[onthebottom]

Can you say Saw Off. That's all, that's it.

Wha....

OTB

 

[Scarey]

I see the Tea Party as a minus for the Republicans.Tea Partiers can't be moved to the right-centre and independants can't be moved to the far right.The whole concept is a vote splitter.Republicans gain small but lose big.

 

[Asterix]

Wha....

OTB

Maybe he meant, sod off. Hard to say.

 

[onthebottom]

The crickets have been deafening..... I think the rate of denial on the left is at record levels, which is saying something.

OTB

 

[blackrock13]

Maybe he meant, sod off. Hard to say.

To OTB, one of my favorite curmudgeons, noooooo.


It will be a bigger clusterfuck not too far down the road. This one was easy.

 

[onthebottom]

To OTB, one of my favorite curmudgeons, noooooo.


It will be a bigger clusterfuck not too far down the road. This one was easy.

Yes the next show should be much more entertaining.... during this little cut they incurred more debt than they cut in the 5 days they spent talking about it.....

As the speaker said, this was about Billions, the next negotiation will be about Trillions.

OTB

 

[blackrock13]

As long as ignorant stupid US citizens buy the big lie of tax cuts creates jobs, there is no hope in hell solving this problem.

From; http://djangomango.tumblr.com/post/4257505873/ten-giant-u-s-companies-avoiding-income-taxes-sen

WASHINGTON—-With federal income taxes due in a few weeks, Sen. Bernie Sanders, the Vermont independent allied with Democrats, on Sunday released a list of ten big profitable U.S. companies paying little or no taxes. Sanders wants to close the loopholes that make this tax avoidance legal. Some people call the income tax system with generous loopholes for big companies corporate welfare or corporate entitlements. As Congress returns to work this week—after yet another break—to negotiate over big budget cuts—with social safety net programs facing reductions—Sanders is pushing for corporations to pay more of a fair “share.”

The Bernie Sanders Ten, per release….


1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

BURLINGTON, Vt., March 27 - While hard working Americans fill out their income tax returns this tax season, General Electric and other giant profitable corporations are avoiding U.S. taxes altogether.

With Congress returning to Capitol Hill on Monday to debate steep spending cuts, Sen. Bernie Sanders (I-Vt.) said the wealthiest Americans and most profitable corporations must do their share to help bring down our record-breaking deficit.

Sanders renewed his call for shared sacrifice after it was reported that General Electric and other major corporations paid no U.S. taxes after posting huge profits. Sanders said it is grossly unfair for congressional Republicans to propose major cuts to Head Start, Pell Grants, the Social Security Administration, nutrition grants for pregnant low-income women and the Environmental Protection Agency while ignoring the reality that some of the most profitable corporations pay nothing or almost nothing in federal income taxes.


Sanders has called for closing corporate tax loopholes and eliminating tax breaks for oil and gas companies. He also introduced legislation to impose a 5.4 percent surtax on millionaires that would yield up to $50 billion a year. The senator has said that spending cuts must be paired with new revenue so the federal budget is not balanced solely on the backs of working families.

“We have a deficit problem. It has to be addressed,” Sanders said, “but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.”

 

[blackrock13]

Who paying the price and feeling the pain; not the UScorporatiion.

How about this one;

From; http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-idUSN1249465620080812

Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.

 

[blackrock13]

Then again, households don't do much better. if i didn't know better I would think the US was trying to run the country like Greece and we all know what we think of Greece. What do the US electorate think the country runs on.

From; http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

That’s the portion of American households that owe no income tax for 2009. The number is up from 38 percent in 2007, and it has become a popular talking point on cable television and talk radio. With Tax Day coming on Thursday, 47 percent has become shorthand for the notion that the wealthy face a much higher tax burden than they once did while growing numbers of Americans are effectively on the dole.

Neither one of those ideas is true. They rely on a cleverly selective reading of the facts. So does the 47 percent number.

Given that taxes are likely to be one of the big political issues of the next few years — and maybe the biggest one — it’s worth understanding who really pays what in taxes. Once you do, you can get a sense for our country’s fiscal options. How, in other words, will we be able to close the huge looming gap between the taxes we are scheduled to pay and the services we are scheduled to receive?

The answer is that tax rates almost certainly have to rise more on the affluent than on other groups. Over the last 30 years, rates have fallen more for the wealthy, and especially the very wealthy, than for any other group. At the same time, their incomes have soared, and the incomes of most workers have grown only moderately faster than inflation.

So a much greater share of income is now concentrated at the top of distribution, while each dollar there is taxed less than it once was. It’s true that raising taxes on the rich alone can’t come close to solving the long-term budget problem. The deficit is simply too big. But if taxes are not increased for the wealthy, the country will be left with two options.

It will have to raise taxes even more than it otherwise would on everybody else. Or it will have to find deep cuts in Medicare, Social Security, military spending and the other large (generally popular) federal programs.

All the attention being showered on “47 percent” is ultimately a distraction from that reality.

The 47 percent number is not wrong. The stimulus programs of the last two years — the first one signed by President George W. Bush, the second and larger one by President Obama — have increased the number of households that receive enough of a tax credit to wipe out their federal income tax liability.

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.

Focusing on the statistical middle class — the middle 20 percent of households, as ranked by income — underlines this point. Households in this group made $35,400 to $52,100 in 2006, the last year for which the Congressional Budget Office has released data. That would describe a household with one full-time worker earning about $17 to $25 an hour. Such hourly pay is typical for firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers, according to the Bureau of Labor Statistics.

Taking into account both taxes and tax credits, the average household in this group paid a total income tax rate of just 3 percent. A good number of people, in fact, paid no net income taxes. They are among the alleged free riders.

But the picture starts to change when you look not just at income taxes but at all taxes. This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family’s total federal tax rate was 14.2 percent.

I realize that it’s possible to argue that payroll taxes should be excluded from the discussion because they pay for benefits — Social Security and Medicare — that people receive on the back end. But that argument doesn’t seem very persuasive.

Why? People do not receive benefits equal to the payroll taxes they paid. Those who die at age 70 will receive much less in Social Security and Medicare than they paid in taxes. Those who die at 95 will probably get much more.

The different kinds of federal taxes are really just accounting categories. At the end of the day, the government has to cover the cost of all its operations with revenue from all its taxes. We can’t wish our deficit away by saying that it’s mostly a Medicare and Social Security deficit.

If anything, the government numbers I’m using here exaggerate how much of the tax burden falls on the wealthy. These numbers fail to account for the income that is hidden from tax collectors — a practice, research shows, that is more common among affluent families. “Because higher-income people are understating their income,” Joel Slemrod, a tax scholar at the University of Michigan, says, “We’ve been overstating their average tax rates.”

State and local taxes, meanwhile, may actually be regressive. That is, middle-class and poor families may face higher tax rates than the wealthy. As Kim Rueben of the Tax Policy Center notes, state and local income taxes and property taxes are less progressive than federal taxes, while sales taxes end up being regressive. The typical family pays a lot of state and local taxes, too — almost half as much as in federal taxes.

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

So why are those radio and television talk show hosts spending so much time arguing that today’s wealthy are unfairly burdened? Well, it’s hard not to notice that the talk show hosts themselves tend to be among the very wealthy.

No doubt, like the rest of us, they don’t particularly enjoy paying taxes. They are happy with the tax cuts they have received lately. They would prefer if other people had to pick up the bill for Medicare, Social Security and the military — people like, say, firefighters, preschool teachers, computer support specialists, farmers, members of the clergy, mail carriers, secretaries and truck drivers.

 

[papasmerf]

Then again, households don't do much better. if i didn't know better I would think the US was trying to run the country like Greece and we all know what we think of Greece. What do the US electorate think the country runs on.

No matter how you look at it you can not tax your way out of anything.

 

[blackrock13]

No matter how you look at it you can not tax your way out of anything.

........ but when you'er not getting money coming in, the system is broke. How do you suggest the money come in to run the country?

 

[papasmerf]

........ but when you'er not getting money coming in, the system is broke. How do you suggest the money come in to run the country?

Reduce expenditures below the level of income.

Same thing you have to do when you borrow.

 

[blackrock13]

Reduce expenditures below the level of income.

Same thing you have to do when you borrow.

The difference is so great at this point in time and with the sacred cows of;

869 Billion is military (244B is the Army, 179B the Navy, 171B the air force, 160B is war on terror)
Social Security is 730B
Income Security through the department of labor (wealthfare) 580B
Medicare 491B
Medicaid 297B

that not being touched in any great amount, it a pipe dream that minor changes will makes a difference

Then there's the dead money for interest payments on the national debt at 251B. Everyone has to bare the pain, not like they tried in Wisconsin.

Anything that doesn't touch any or all those areas is just lip service.

 

[papasmerf]

The difference is so great at this point in time and with the sacred cows of;

869 Billion is military (244B is the Army, 179B the Navy, 171B the air force, 160B is war on terror)
Social Security is 730B
Income Security through the department of labor (wealthfare) 580B
Medicare 491B
Medicaid 297B

that not being touched in any great amount, it a pipe dream that minor changes will makes a difference

Then there's the dead money for interest payments on the national debt at 251B. Everyone has to bare the pain, not like they tried in Wisconsin.

Anything that doesn't touch any or all those areas is just lip service.

Let us consider just a few of ways to save money

In my area cable plus internet service run around 100 dollars per month and under no circumstances is either considered a life necessity.
Survey welfare households and cut benefits by 100 dollars per month for all welfare household with them.

Eliminate all government funded public programs that provide fee cell phones.

Locally public housing is not by any account at 100% occupancy yet it is staffed as though it is. Belmont and Section 8 are programs that provide private landlords direct payment for welfare tenants. Suspend these programs until such time there is a waiting list for public housing.

These simple measures enacted nationally could save a hell of a lot more then people think.

 

[blackrock13]

Let us consider just a few of ways to save money

In my area cable plus internet service run around 100 dollars per month and under no circumstances is either considered a life necessity.
Survey welfare households and cut benefits by 100 dollars per month for all welfare household with them.

Eliminate all government funded public programs that provide fee cell phones.

Locally public housing is not by any account at 100% occupancy yet it is staffed as though it is. Belmont and Section 8 are programs that provide private landlords direct payment for welfare tenants. Suspend these programs until such time there is a waiting list for public housing.

These simple measures enacted nationally could save a hell of a lot more then people think.

From what I understand the welfare rate inthe US is approximately $400/month. Do you expect someone to live on $300/month?

From; http://findarticles.com/p/articles/mi_m1272/is_n2622_v125/ai_19217177/

The amount of AFDC benefits ranges from $923 per month in Alaska to $120 in Mississippi. The national average is $399 a month. 40 million Americans, mostly women and children, are on welfare. That's $4 billion a year from citizen who can least afford it. Can you live on $330/month? I doubt it some how.

The only people up here getting f(r)ee phone are in-danger women.

So the people that work in the jobs that involve public housing are to be told they're going to be employed on a need to basis. If we aren't at capacity then you will be laid off, but if we get more residents, you will be called back. When the weather's nice you won't be working as not as many people will be living in public housing, so don't complain, enjoy the sun. This winter you'll be hired back just in time for Xmas. Have a nice day.

Riiiiiight!

Sorry PS.

 

[papasmerf]

From what I understand the welfare rate inthe US is approximately $400/month. Do you expect someone to live on $300/month?

From; http://findarticles.com/p/articles/mi_m1272/is_n2622_v125/ai_19217177/

The amount of AFDC benefits ranges from $923 per month in Alaska to $120 in Mississippi. The national average is $399 a month.

I believe you might be mistaken because if it were 400 per month they could never find a rental, electric and heat

You are also not taking into account the food stamps.

 

[kupall]

Im a center right guy, but looking at all these corporate profits and seeing that no significant hiring is happening, then yes i think these people must be taxed, everyone is sacrificing something at this point, i agree with cutting everything thats not needed, but its not enough, the money has to come from somewhere.

Unless these companies start reinvesting in jobs, not buying back stocks, then Obama does have a point about these reenacted tax cuts.

 

[blackrock13]

I believe you might be mistaken because if it were 400 per month they could never find a rental, electric and heat

You are also not taking into account the food stamps.

The reference says otherwise. As far as food stamps goes, that's peanuts.

see http://blogs.wsj.com/economics/2010/11/04/some-14-of-us-uses-food-stamps/


What was your families food budget last month.

Food stamps account for how much of the US dficit. Any ways since 1994 welfare has dropped a lot

From; http://usgovinfo.about.com/od/federalbenefitprograms/a/welfarereform.htm

According to the independent Brookings Institute, the nationwide welfare caseload declined about 60 percent between 1994 and 2004, and the percentage of U.S. children on welfare is now lower than it has been since at least 1970.