Budgets

The $1 Trillion Tax Battlefield Takes Shape

By Massimo Calabresi | April 13, 2011 | +

President Obama didn’t offer a lot of specifics about how he intends to close the federal budget deficit in his speech at GW Wednesday, but he did make one thing clear: he intends to go head-to-head with Republicans over taxes.

That makes political sense. If he’s going to go after $2 trillion in spending, as his aides say he will in coming negotiations, he’s going to have to give Democrats, for many of whom that spending is sacred, some red meat. That red meat is $1 trillion in tax hikes aimed at primarily at the rich.

Obama teed up tax increases as a matter of morality and contrasted them with the proposals of House Budget Chair Paul Ryan. About tax cuts for the rich envisioned in Ryan’s plan, Obama said,

Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes?  They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.

It was the first and only applause line of the speech.

Even before the president spoke today, the distance between Obama and Republicans over taxes came into focus.

A senior administration official briefed reporters Wednesday morning that the president’s plan would call for tax increases over 12 years that would boost revenue $1 trillion, though he declined to say how much would come from the expiration of the Bush-era tax cuts for the wealthiest Americans and how much would come from elsewhere. The president in his speech said much would come from so-called “tax expenditures” or credits and deductions in the tax code. He suggested he would protect the popular home mortgage deduction, but maybe not for the rich, and was otherwise unspecific.

For their part, Republican leaders on the Hill said taxes were off the table. “We will not be discussing raising taxes,” said Senate GOP leader Mitch McConnell at a press conference an hour before Obama spoke.

Related Topics: Budgets

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  • http://elvisberg.wordpress.com Elvis Elvisberg

    It’s worth noting that the Republican position is completely insane.
    -
    Under the 1990s tax levels, we had pretty great conomic performance.
    -
    Ronald Reagan repeatedly raised taxes (after his initial cuts, and overall he still did cut revenues), because he cared about the deficit. Eisenhower thought that Congressional Democrats were downright unpatriotic for proposing a tax cut in a time of deficits.
    -
    Dick Cheney said “Reagan proved deficits don’t matter.” Paul Ryan voted for Medicare part D, refused to try to lower costs on it later on, supported the invasion and occupation of Iraq, and supported the Bush tax rates. The post-Bush Sr. era GOP simply doesn’t care about the budget.
    -
    Ronald Reagan and Dwight Eisenhower would be chucked out of the GOP as RINOs. Today’s GOP is a completely, 100% insane and unserious.

  • Art Pepper

    “red meat”

    It’s never about substance, is it?

  • 53_3

    I don’t often repost, but here it is, because it speaks directly to this issue:
    .
    Let’s hope that Obama draws the line just as firmly as Boehner did.
    .
    My point is this:
    .
    Most Americans don’t like the idea that a trainwreck is going to occur. I understand that. The problem is that one side (the GOP) has made it clear that people making over 250k a year won’t have to help carry the burden of reducing the deficit. They’ve said it already: they will not even talk about it.
    .
    Ok, fair enough.
    .
    So if Obama, who has previously stated that his primary goal is to ensure that the American people (read middle class) doesn’t get hurt, how will he handle it?
    .
    After all, Boehner made their position clear; everyone knows what the GOP position is, but because Obama has been giving ground steadily in the past on budgets and taxes, know one knows when or where he will really draw the line.
    .
    There are several things to consider:
    .
    1. Reelection
    He can position himself for reelection, but if he does not do so in a manner that will make Americans proud to be Democrats he will not have any help whatsoever in serving out a second term.
    .
    2. Equity
    We are now approaching the point where equity is an issue; tax reform won’t take place overnight, but budgets will and revenues have to come from somewhere. The choices are now clear: The GOP says I will have to pay more. The richest Americans won’t. It is now clear, and it is time for Obama tonight to draw his own lines in the sand.
    .
    3. Politics of Opinion
    There really are no more choices; the GOP has staked out one, and the only way to address the equity issue described above is for the POTUS to make known his position, make it known forcefully, and do not surrender the territory marked out. This is important, perhaps the most important of all, because if the GOP refuses to move from their position, there will eventually come a time where we will necessarily have to have this trainwreck. He will have to risk it, and let the American people decide the outcome.
    .
    I don’t expect Obama to attack the GOP, he never does, but I think a good idea might be to watch how forcefully he draws the lines, because that is going to indicate whether he is poised to give in or not.
    .
    Obama needs to give us Democrats something we can take home, otherwise, of what use is a second term?

  • m0mentom0ri

    “That’s not right, and it’s not going to happen as long as I’m President.”
    .
    Riiiiiiight. Unless ‘its the best we can do’ or ‘its a bi-partisan approach’ and besides, the Dems don’t have a filibuster proof majority in the Senate anymore, and…and….but…
    .
    Talk is cheap. I’ll believe it when I see it.

  • http://grapemusing.blogspot.com/ grape_crush

    All horse race, all the time.

  • kbanginmotown

    Jon Stewart compared Ryan’s “Spending Cuts” plan to repealing the Bush Tax Cuts last night to great effect:
    .
    http://www.thedailyshow.com/watch/tue-april-12-2011/ryan-s-private-savings—path-to-prosperity

  • charlieromeobravo

    ““We will not be discussing raising taxes,” said Senate GOP leader Mitch McConnell”
    .
    Keep sticking to that sci-fi economic policy there guys. Yeah, spending needs to be addressed but ridiculous tax cuts are a big reason we’re in this mess. You can’t be sincere about solving this problem if you refuse to address fully one half of the cause.

  • charlieromeobravo

    Yeah, it’s amazing how far we can go towards correcting this problem when we just roll back Republican era irresponsibility.

  • waynebernard

    So far, the proposed cuts are a tiny fraction of what is needed to reach balance over the coming decades as unfunded entitlement program expenses rise to the $100 trillion level.

    Here’s an article that examines what might trigger a debt crisis in the United States and when that could occur:

    http://viableopposition.blogspot.com/2011/04/trigger-point-for-united-states-debt.html

  • nflfoghorn

    As long as polls stick BO’s way, he should be able to insist that taxes are on the table. If he gives up on this, too, then he’s not the man I thought he was.
    .
    Get it right, Rocky.

  • http://grapemusing.blogspot.com/ grape_crush

    It’s a good thing that not all bajillionaires are greedy pr!cks.

    It’s also a good thing that nothing has to pass and we will still shrink the deficit.

    It’s unknown whether or not Obama realizes that he has the upper hand in these negotiations.

  • freeinpa

    Obama has a career in farming given the manure he continues to shovel. He could not man-up and say 2 things; I am going to raise your taxes but “reduce spending in the tax code” and call “investments what they are spending!
    .
    For all the deniers out there, if you still believe Obama is not taking us toward socialism your either not paying attention or just lying to yourself. He believes all the money is the government and they get to decide who gets it. The government is not a creator of wealth of a user.

  • nflfoghorn

    Fitty, he doesn’t have to “attack” them per se, but he can state that he’s got one position back by the people, and the GOTP is on the other.

  • nflfoghorn

    Whatever you say, Freep. You’re 100% correct, yessiree. Komrade Obama compels you to live like a slave, just like Muslim Brotherhood.

  • 53_3

    I didn’t hear the speech. What’s your take on it? Did he draw the line on taxes?
    .
    If he did, and it sounds like that is what MC is saying, then it’s good. Wishy washy is bad.
    .
    Did he sound strong on his positions? I’m not concerned with the presence or lack of specifics.

  • 53_3

    But I thought it was the New Black Panthers that were trying to enslave the likes of freeinpa?
    .
    After all, with Rusty as their newest member, they need to get those numbers up somehow…

  • shepherdwong

    “President Obama didn’t offer a lot of specifics about how he intends to close the federal budget deficit in his speech at GW Wednesday…”
    .
    Proving, once again, that he’s not crazy.

  • shepherdwong
  • np042

    I still would really love to see the thought process that is “Obama talks about potentially raising taxes (by a couple percent, at most)” –> SOCIALISM!!!

  • nflfoghorn

    Haven’t heard it and I don’t think it would change my opinion any if I did. Talk is cheap. I don’t expect any different from the GOTP but BO hasn’t been taking advantage of his populism. Time for playing nice has long passed.

  • 53_3

    I”m skeptical too but I’m hoping that Obama far to intelligent to verbally put his head in a noose leaving the GOP with only one simple task:
    .
    Slap the horse (either end will do)…

  • Ivy_B

    That’s an excellent article, as usual, by Digby.
    .
    Didn’t hear a lot of discussion about the fact that there were a lot of specifics that Ryan left out as well.

  • nflfoghorn

    Suggest that taxes should be raised
    .
    Not MY taxes!
    .
    I HATE YOU, YOU HALF-BLACK MAN
    .
    SOCIALISM
    .
    .
    There you have it, NP. ;)

  • 53_3

    Did the USA suddenly stop being socialist when GWB enacted his tax cuts?
    .
    I sure didn’t feel anything. No bumps. No loud bangs, or the screeching of steel on steel. No “Trump”ets. And especially, not a single vuvezuela! Did you notice it?

  • 53_3

    You know what is only slightly funnier, foghorn?
    .
    Yesterday, I was at the post office and lo and behold, the LaRouchies were out! All two of ‘em.
    .
    They were hating on Obama, too.
    .
    I think twenty years from now will be about the right time frame to look back on this hatefest. You’re damned if ya do and yer damned if ya don’t but either way yer D A M N E D!

  • 53_3

    Yup. If we have to say stuff like this, then BO really isn’t getting it.
    .
    What point is getting reelected if all the sojers needed to help him fight his battles are swept from the stage?
    .
    We’d be the first country to put new meaning in the word “sockpuppet”.

  • 53_3

    I do have a really serious question though:
    .
    Is it his Black half or his White half that wants to take freeinpa’s money?

  • Ivy_B

    I did hear it and thought it was good. Stuart on Twitter had a lot of compliants about the health care points – that they were all old Third Way positions – but I’m not as versed in that as he is. Certainly way better than anything else I have heard him say recently.

  • freeinpa

    And the parade of knuckleheads continues. Keep lying to yourselves. He is becoming a bigger joke by the day and you guys are driving the clown car.

    You try to deflect but you can’t defend or refute

  • 53_3

    I guess what I’m hoping for is that Obama made his positions clear and that he has intentionally stuck his political neck out on this.
    .
    Putting his political neck on the block would be, next to actually having done it already, the best guarantee that he intends to see it all the way through.

  • http://shortplaysaboutrealpeople.wordpress.com Michael Maiello

    It’s also entirely ridiculous. “Red meat” describes something that partisan voters really hold dear. Democrats don’t hold tax increases in that regard. We consider it a pragmatic solution to the current problem. But obviously if we could lower tax rates to 2% for everyone and still maintain a civil society with attendant social programs, we would.

  • swissArmyBrainBETA

    also, tax increases never make good “red meat” anyway, but to call them that, in the context of a deficit reduction speech?! does massimo have any clue at all when it comes to policy?

  • shepherdwong

    “Didn’t hear a lot of discussion about the fact that there were a lot of specifics that Ryan left out as well…
    .
    It wouldn’t Very Serious to criticize a Republican. Besides, “conservatives” say mean things about you when you do that. Really mean things.
    .
    Posted this on Digby’s previous thread at Hullabaloo:

    A solid defense of government, the social compact (he actually said those words), the social safety net, progressive taxation and investment spending and a strong rebuke of austerity, Republican style. The liberal apologies should be pouring in at any moment, right after they admit that Obama can’t do a goddamned thing about unemployment against the elite establishment forces.

    Any liberals around here can get the ball rolling…if they wish.

  • m0mentom0ri

    “if you still believe Obama is not taking us toward socialism your either not paying attention or…”
    .
    …you actually know what the word ‘socialism’ means.

  • 53_3

    I don’t think you can see the trees for the forest, freeinpa.
    .
    You want us to bask in your gloating, but really, I don’t think any of us are interested in that.
    .
    You see, you have entirely different reasons than we do for questioning Obama. You question because you hate him. Nothing more and certainly, nothing less.
    .
    As for your inane comments about socialism. I refer you to the implications at 10.5 as evidence against such. We question him because he has been too willing to compromise.
    .
    The fact that we are both facing east only means that all of us are looking for the sun to rise…

  • liberalmeltdown

    So Obama rolled out his one great idea: Raise taxes. What else is new?
    .
    Oh no, he’s not a liberal, nope, no way.
    .
    The rest is smoke.

  • 53_3

    Just so that implicit commentary isn’t wasted within the confines of freeinpa’s rather tweensy thought-nodule:
    .
    If, by rolling back the Bush tax cuts, Obama is making our country “socialist” then, by any standards, the US must have been socialist prior to GWB’s enactment of the tax cuts.
    .
    Is this clear enough? Do I have to hold freeinpa’s hand every time an explanation escapes him? Is the screeching whine of the verbal potshots to high above his shoulder pustule too hear? Do I have to fire ‘em past his right ear before he figures it out?
    .
    Stu tanyed….

  • 53_3

    Raise taxes. Yup. If I have to pay, then the rich do too.

  • np042

    Keep lying to yourselves.

    Generally, Freeper, if you’re going to call someone a liar, it’s a good idea to point out how they’re lying. Saying “Obama is a socialist” doesn’t really cut it.

  • http://tisias.wordpress.com tisias

    I would love to see an extension bill come up in 2012 and have Obama veto it, or better yet, do the classic presidential ignore move.

    I doubt that will happen, because the Senate still has some sense.

  • freeinpa

    “You question because you hate him. Nothing more and certainly, nothing less.”
    .
    Don’t hate the man. Don’t know him. I hate his policies which are nothing more than wealth re-distribution and a distorted sense of fairness from someone who has never really held a job

  • nflfoghorn

    10.6: As if he ever was, LaRouche isn’t alive still, is he?
    10.7: Unclear. The Black Half has his hand out, the White Half has his wallet. What to do, what to do? :)

  • freeinpa

    “If, by rolling back the Bush tax cuts, Obama is making our country “socialist” then, by any standards, the US must have been socialist prior to GWB’s enactment of the tax cuts.”
    .
    Re-distributing wealth through the tax code is only part of socialism. It’s picking winners & losers in industries, its controlling industries, its forcing folks to buy HC insurance and on and on. And we have been on a long downward slide toward this since FDR

  • freeinpa

    They already do. In fact the top 10% pays over 70% of them. You like Obama say they will willing pay more. And yet you (or he) do not.

    The best action by liberals –talking!

  • freeinpa

    Fine. Believing that taxing the “wealthy” and spending , sorry investing more money will balance the budget or reduce debt.

  • fhmadvocat

    freeinpa,
    I didn’t know Pete Domenici was such a liberal . . . . .

    Statement by Former Senate Budget Committee Chairman Pete Domenici on President Obama’s Debt Reduction Framework

    Washington, D.C. – The following is a statement by former Senate Budget Committee Chairman Pete Domenici, a Senior Fellow and co-chair of the Debt Reduction Task Force at the Bipartisan Policy Center, on the debt reduction proposals put forth by President Barack Obama today:

    “I commend President Obama for laying out his specific proposals for deficit reduction today, and I believe that his leadership marks a crucial moment in the ongoing debate about our nation’s debt and fiscal situation. Although there is much work to be done, the president has shown that he understands the magnitude and urgency of the problem and is willing to take immediate action to solve it by putting forth specific targets, including his goal to reduce our deficit by $4 trillion in 12 years or less, and ideas on process and tax reforms, including a debt failsafe trigger.

    “I agree with the president that ‘any serious plan to tackle our deficit will require us to put everything on the table,’ including Medicare and Medicaid. While I prefer the Medicare proposal put forth by the Bipartisan Policy Center, the president’s willingness to tackle the largest drivers of our debt shows that members of both parties are willing to have a straightforward, constructive debate about this problem.

    “Now the parties must come together to find solutions. I believe that convening a bipartisan, bicameral congressional group to lead the negotiations on a legislative framework is precisely the right thing to do. It is my hope that those negotiations will pave the way for the upcoming debate about the nation’s debt ceiling.

    “As he said today, ‘we will all need to make sacrifices,’ and I hope the president continues to clearly explain and educate the American people about the catastrophic size of our nation’s debt and the reforms that will be needed to get us back on a path of economic growth and job creation.”

    Read more: http://thepage.time.com/2011/04/13/domenici-dog-kisses-man/#ixzz1JRSSiaLO

  • fhmadvocat

    freeinpa,

    The people who keep lying to themselves are the Republicans who believe that a change in the marginal rate of taxes will trully affect the economy.

    Clinton gave us tax hikes and the economy did not go in the tank like Republicans predicted.

    Bush gave us tax cuts and the economic growth was the lowest since WWII.

    That does not mean tax hikes spur the economy and tax cut hurt the economy. What it means is that tax hikes and tax cuts are OVERRATED.

    As far as our “Socialist” President, please name one time he has actually raised taxes. Actually he has signed on to tax cuts.

    As far as his socialism, listen . . . . . can you hear it? It is the sound of the Dow Jones rising during his administration . . . . . . . . evidently Wall Street likes socialism.

  • 53_3

    “And we have been on a long downward slide toward this since FDR”
    .
    Well I don’t think anyone has ever suggested that you stop mangling the hand that feeds you, but I guess the Dust Bowl and rural penury are yours if you want ‘em. Sh!t, you won’t be even able to watch FOX!
    .
    I rest my case…

  • 53_3

    …and, of course, let me say this without a ROFLMAO guffaw:
    .
    The GOP isn’t picking winners and losers?!?!

  • 53_3

    No, instead I have to pay more for everything plus higher taxes!
    .
    And my income is decidedly limited. Unlike some people here…

  • 53_3

    It will certainly balance the budget! Good thing too. The rich have plenty of money, we don’t. Stop whining and pull your freight. Live life a little closer to the edge. Don’t worry, we’re a lot closer to that edge, but hell, that’s the way it is. I just want you high income whiners to face facts and help the country.
    .
    So when the country needs help, go to the deepest well.
    .
    Anything else is un-American.

  • 53_3

    foghorn @ 10.13:
    .
    Hmmm. A quandary indeed. But wait. The black half might try to steal the white half’s wallet. There’s gonna be a fight.
    .
    But that brings up another question:
    .
    Which half throws like a girl?

  • 53_3

    foghorn @ 10.13 in re 10.6: (this could get ugly)
    .
    Do you think that one of the LaRouchies has his preserved body in a basement somewhere with his acolytes giving him round-the-clock mouth to mouth resuscitation?

  • freeinpa

    “Clinton gave us tax hikes and the economy did not go in the tank like Republicans predicted.

    Bush gave us tax cuts and the economic growth was the lowest since WWII.”
    .
    Amazing how liberals look at everyhting in a vacuum. I guess complex issues are too much to consider. How convenient it is to forget that a Repub Congress restrained the spending to balance a budget. And the Clinton economy was easy money by Greenspan which led to the NASDAQ bubble.
    .
    And of course for the Bush economy, the NASDAQ crash and 9/11 had no impact on the economy, it was tax cuts that caused the poor economy
    .
    “The rich have plenty of money, we don’t.”
    .
    And there we have it- Class envy!!! I or I want mine

  • allthingsinaname

    I thought he made himself clear, he certainly attacked Ryan’s plan, I was very surprised, and pleased.
    .
    He was willing to talk SS, but I think he was talking strengthening it not reducing benefits, like maybe raising the Cap, but politicians one never knows for sure.
    .
    Medicare I am not sure what he thinks, he mentioned using purchasing power to reduce drug cost, I think that is what he wanted to do was control the cost of drugs.
    .
    Taxes he was on the offense let us hope he stays there.

  • http://mizclay.wordpress.com mizclay

    the repubs always say they’re doing what the people want….They are ? dont they have poor-mid class people living in their kingdoms? if so, are they representing you? do you know what they are doing? how about a little participation. and dont think its cool to act rich when you aint. what is the definition of democracy and socialisiam? arent we supposed to be doing what is best for everyone. isnt there a “one for all-all for one” on that” in god we trust “dollar? you are sheep .THINK, PEOPLE. obama needs to stand up to the republicans, and you need to stand behind him.

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