The Wall Street Journal has an article about the provisions of the Gang of Six proposal.
Basically, the plan would cut taxes $1.5 trillion relative to what would happen if all current laws (such as the Bush tax cuts and Alternative Minimum Tax) were maintained, but would raise them $1 trillion relative to current policy.
It supposedly ends credits, deductions, and preferences and closing loopholes in the tax code and simplifies the tax code into three different low-rate brackets for income. That would lower marginal rates and those are the worst kind of taxes in terms of helping/hurting the economy.
All that seems reasonable to me, insofar as I've always said a flat tax is the best way to tax and this moves at least a little closer to that.
In every year since Obama became president, we've had annual deficits of roughly $1.5 trillion added to our national debt. We've gone from $10 trillion in cumulative debt when W.Bush left office to almost 14.5 trillion, in just 2 and 1/2 years.
What they're proposing is to go back to "2006-level" deficits, where we're still adding about 400 billion a year in unfunded spending to the national debt. And really, that's not good enough. The "Gang of Six" proposal doesn't get us where we need to be. I think in terms of political reality of what can be bipartisanly passed, it might be the best that can be done. But it's not enough.
We need to make cuts to the point that we cease to have annual deficits, and even have enough surplus to start paying down the $14.5 trillion cumulative debt. The interest alone is now over 400 billion. The Gang of Six plan just allows it to keep snowballing.
I saw Boehner interviewed yesterday on Fox News Sunday, and he said he remains committed to "Cut, Cap and Balance" or some variation of it.
And I think that's the right course. A major step toward reigning in federal spending has to be taken, or we'll be right back here in a year or so, raising the debt limit yet again. And at that point the U.S.'s credit rating will be downgraded.
Of course, the pro-Obama media is demonizing the Republicans for not caving in to Obama's demands, for Republicans holding fast to demanding fiscal responsibility along the lines of the Bowles-Simpson plan --the recommendations of Obama's own debt commission-- that Obama has ironically rejected, even as the Republicans responsibly push for enacting its recommendations.
The Republican-majority House has already passed "Cut,Cap and Balance". And then Democrat Senate majority leader Reid tabled it, and wouldn't even allow a debate in the Senate!
The "Gang of Six" plan was, I believe, just a Democrat ploy to delegitimize and bypass the "Cut Cap and balance" plan, and that belief is reinforced by the fact that its specifics were never even disclosed. It was another plan like Obamacare, Stimulus and TARP bills, where in a state of panic the Senate was just supposed to rush it through unread.
At present, Obama has still offered no budget plan, and both he and the other Dems limit their input to demonizing whatever the Republicans offer.
And, of course, the pro-Obama news media likewise ramps up the panic of impending doom if Obama doesn't get his way, and stacks all blame on the Republicans
Well the democrats have a plan now. Probably not enough cuts to make the GOP happy probably but enough that I think most people would support it.
The GOP isn't going to get what it wants nor should it. We have elections for a reason. For such drastic measures they need to win some more seats and the presidency instead of this harmful game playing.
It seems as if congressional leaders on both sides would like to cut a deal but Obama is throwing a tantrum because he thinks he can use a crisis to his advantage in 2012.
It seems as if congressional leaders on both sides would like to cut a deal but Obama is throwing a tantrum because he thinks he can use a crisis to his advantage in 2012.
That's a popular talking point with the GOP but Boehner has walked out on everybody at this point. Essentially we're going to go into default not because everybody doesn't agree that cuts need to be made but that the cuts were not big enough or fast enough to suit the tea party.
Btw, I don't see the democrats looking too good either. These last couple of years they've been just sort of letting republicans lead the debate.
It seems as if congressional leaders on both sides would like to cut a deal but Obama is throwing a tantrum because he thinks he can use a crisis to his advantage in 2012.
That's a popular talking point with the GOP but Boehner has walked out on everybody at this point. Essentially we're going to go into default not because everybody doesn't agree that cuts need to be made but that the cuts were not big enough or fast enough to suit the tea party.
Btw, I don't see the democrats looking too good either. These last couple of years they've been just sort of letting republicans lead the debate.
That's not accurate.
Boehner negotiated a deal they agreed on for 800 billion, then at the last minute Obama's team tried to play poker for an additional 400 billion in "additional revenue" (i.e. higher taxes) at which point Boehner's group walked away.
If Obama would agree to accept what they already negotiated, Boehner has already said he would accept it. MediaMatters spin notwithstanding, it is Obama, not the Republican leadership, that is holding out and stalling a deal.
M E M, you act like the Republicans are doing something "extreme" and unreasonable, when in truth they are pushing for responsible policy that the GAO, CBO, the bipartisan Bowles-Simpson committee's recommendations, Standard& Poor's and all the financial rating groups, and even China have urged as the only responsible fiscal policy for us to pursue. Even many of the Democrats are reluctant and pushing Obama to concede.
On the other side is Obama and the liberal media, demonizing the Republicans for simply doing the right thing. As opposed to raising the debt cieling yet again with no reforms, in which case they'll be back in 7 months asking for another raise of the cieling, downgrading our national credit rating, higher interest rates, and no end in sight.
Obama up to this moment still has no budget plan, even as he condemns every plan offered by Republicans.
The last day or two, Obama's people allege he has a plan, still un-announced. According to White House spokesman Jay Carney, simply asking what plan Obama has is dismissively shouted down as a right-wing "talking point".
Ed Henry of Fox News asked the question, but Carney's response was audibly rejected by the entire White House press corps.
It seems as if congressional leaders on both sides would like to cut a deal but Obama is throwing a tantrum because he thinks he can use a crisis to his advantage in 2012.
I love O'Reilly but not a big fan of raising the debt ceiling as long as democrats "cut spending" and agree this is going to be the "last time."
I would even be in favor of raising taxes and cutting spending to help curb and pay off the nations debt.
Does China still own most of the U.S. economic debt? That thought worries me!
China owns about a trillion of our federal debt, Japan almost a trillion, followed by the U.K. and OPEC states, Brazil and Russia. But the majority of our debt is privately funded by domestic investors.
I agree that it's absolutely a bad idea to raise the debt cieling further, but would be okay with it one last time, if it is with the rock-solid condition that this is absolutely the last time, with conditions in the bill to have a balanced budget beginning next year, and begin paying down the debt in years following.
Regarding raising taxes: Absolutely not, until the cuts are implemented first. Then and only then raise taxes, with that revenue explicitly ONLY used to pay down the debt. No more tax-and-spend.
So what happened with Boehner's plan that allegedly had all that support WB?
It passed in the House, and when sent to the Senate was tabled by Democrat majority-leader Reid who refused to allow it to be debated.
I think initially non-Tea-Party republicans were cautious to be absolutist in supporting "Cut Cap and Balance" due to the fragility of the U.S./global economy and the potential ramifications of holding out, but are increasingly emboldened as they further understand the plan. And the inevitable future crisis that is just delayed by a few months or years if "Cut Cap and Balance" is not implemented now, and deficit spending is allowed to continue.
I saw that Blankfein and the rest of the heads of the major banks had the audacity to warn Congress about the debt ceiling and fiscal irresponsibility today. The entire spectacle felt like irony walked right up to me and kneed me in the nuts.
Yeah, that's equally true of credit rating agencies such as Standard & Poor's and Moody's, who gave triple-A ratings of investment firms despite their being heavily invested in mortgage-backed securities. Still given AAA ratings, right up until the 2008 collapse.
