Repeat after me:
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit.
Got it?
The CBO found that spending cuts in the Republican plan would be outpaced by deficit increasing tax cuts for the rich. I do NOT understand why the press doesn’t shove this fact in front of every Republican who says the debt limit cannot be raised unless their new spending cuts are put in place. The Republican plan – written by Paul Ryan – contains everything Republicans can think of in terms of spending cuts and would add more debt than we have ever seen over a 10-year period in American history! Yet Ryan and other House GOP leaders continue to make outrageous statements to the contrary – without being embarrassed and without anyone calling them on it.
In contrast to the Republican budget, the CBO said, "the economic feedback from the President’s proposals would increase their cumulative impact on deficits from 2012 through 2016 – which is estimated to be nearly $1.0 trillion excluding any aggregate economic effects – by between $10 billion and $30 billion. From 2017 to 2021, the effects of the proposals on the economy could further boost the cumulative increase in deficits – estimated to be about $1.8 trillion, excluding any aggregate economic effects – by as much as $217 billion or could reduce it by up to $8 billion" because "projected deficits fall due to the tax base increasing even when gross national product (GNP) decreases."
It is ironic that the Republicans always talk about how the Democrats are always trying to redistribute wealth. Yet you get redistribution of wealth with this plan – except the money is being redistributed from the poor and the middle class to the rich. They say it is so that the rich will create new jobs for America. Yeah, right. If you believe that, have a look at George Bush's record of job creation. We lost millions of jobs to other countries like Mexico and India during his two terms.
Robbing from the poor to pay the rich. It doesn’t make sense, does it?
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Wednesday, April 20, 2011
Friday, April 3, 2009
The joke is on us
As surely as the sun rises in the east and sets in the west, Republicans will offer tax giveaways to the wealthy as the cure-all for surpluses, deficits, boom times, and recessions. The government’s Office of Management and Budget communications director Kenneth Baer said this about the Republican alternative budget, "I have two words for you: April Fool's."
Just to give you some context, as the Center for American Progress noted, the Bush tax cuts delivered a third of their total benefits to the wealthiest 1% of Americans. Their payday was staggering. As the Center for Budget and Policy Priorities detailed in 2008, in 2007 millionaires on average pocketed $120,000 from the Bush tax cuts of 2001 and 2003. Those in the top 1% were allowed to keep an extra $45,000 a year! As a result, millionaires saw their after-tax incomes rise by 7.6%, while the gains for the middle class and poor were basically stagnate.
As the Republicans try to give away billions to those who are already living high on the hog, what do they budget for health care, research on renewable energy, natural disasters, or to bring down the deficit? Do they actually put the cost of the Iraq and Afghanistan wars in their budget as Obama did in his?
While the Democratic budget cuts taxes for middle class families, and makes critical investments in health care, education and clean energy, the Republican budget released on Tuesday called for "a marginal tax rate for income up to $100,000 of 10 percent and 25 percent for any income thereafter," which would result in a massive reduction in government revenue and another generous tax break for the wealthy. They also propose to cut taxes for business, freeze most government spending for five years, halt spending approved in the economic stimulus package, and slash federal health programs for the poor and elderly. The Republican budget plan would gradually eliminate the traditional fee-for-service Medicare program, offering a stark alternative ‘voucher’ plan so the elderly would have to buy their insurance on the open market.
But please beware, Republicans are playing a shell game with the numbers: You, the taxpayer would get to choose whether you want the new tax rate or the old tax rate. This is how the Republicans offer the tax cut without factoring it into the budget's revenue – suggesting that Americans won't actually take advantage of the lower rates. Instead, the GOP budget permanently extends President Bush's 2001 and 2003 tax cuts. A Republican budget committee aid said that the revenues assumed in the GOP budget are based on the current tax structure. In other words, in order to give you, the public, a more favorable picture of the deficit their budget would create, Republicans are making the assumption that Americans will choose the higher rate – hence, the shell game.
Under the current tax code, an individual making more than $160,850 pays a 33 percent rate; under the Republican plan, that taxpayer could choose to pay 25 percent instead. (For a family, the income threshold is $195,850.) For a family earning more than $349,700, the rate rises to 35 percent, but filers could still choose the 25 percent rate. If taxpayers did decide to pay the lower rate, government revenue would plummet by roughly $300 billion per year, said economist Dean Baker of the liberal-leaning Center for Economic Policy Research. This would effectively gut most domestic programs such as healthcare and renewable energy research.
A study by the non-partisan ‘Center on Budget and Policy Priorities’ demonstrated that the Bush tax cuts accounted for half of the mushrooming deficits during his tenure in the White House – and yet Republicans want to do more of the same. What’s worse, the Republicans have not put forward any credible deficit-reduction plans. Their main alternative to Obama's stimulus plan is a $3.6 trillion tax cut for the wealthy that will add that same amount to the national debt.
Once again Republicans want to give an overwhelming share of tax cuts to wealthier Americans. Yet the GOP plan fails to invest in high priorities such as education, infrastructure, public safety and biomedical research. And their plan for Medicare is that workers under the age of 55 would no longer be allowed to buy into the program but instead receive insurance premium subsidies. The Medicare move would gut the program and turn it into a voucher system. The Republicans are basically saying to the retired and elderly who often cannot qualify for insurance on the open market “here’s a small amount against your insurance premium – if you can find someone who will insure you.” The amount of the voucher would all too quickly fall behind the rising cost of health care.
Some of the features of the GOP budget are:
• Rescinding the newly passed economic stimulus package in 2010, except for unemployment insurance for those who have already lost their job;
• Freezing non-defense, non-veteran spending;
• Converting Medicaid into an allotment to states. Turn Medicare into an insurance voucher system. (Keeping current Medicare secure for those who are now over 55.)
• Privatize Social Security – if you lose the money in the stock market it will be your tough luck;
• Make permanent the 2001 and 2003 tax cuts while setting up a parallel, simplified tax code that taxpayers could opt-in to. Taxpayers would have a choice of keeping the current system, or choosing one that would tax couples making $100,000 (or individuals making $50,000) at a10% rate and taxing those above at 25%.
• Cutting the corporate tax rate to 25% as a “job-creating measure”;
• Increasing offshore oil drilling; no cap-and-trade;
Here is a graph from Republican Paul Ryan's Wall Street Journal op-ed on the subject, because it's a blatant exaggeration. They are saying that this is based on Congressional Budget Office's Long-Term Alternative Fiscal Scenario, but the CBO has never done an analysis that runs through 2080. This graph supposedly compares the Democratic Budget and the Republican Alternative based on spending as a percentage of GDP all the way up to 2080:
The Congressional Budget Office has scored the Obama budget only through 2019, and it looks like this:
Apparently, Paul Ryan and his staff just took the CBO projections (above) that end in 2019 and drew a random line, extending upward at about a 45 degree angle, until 2080.
Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth under Democratic and Republican presidents since World War II. Democratic presidents have produced slightly more income growth for poor families than for rich families, resulting in a modest decrease in overall inequality. Republican presidents have produced a great deal more income growth for rich families than for poor families, resulting in a substantial increase in inequality. How can the average citizen not see that Republicans are in bed with the wealthy?
OMB’s Kenneth Baer was correct – the joke is on us.
Just to give you some context, as the Center for American Progress noted, the Bush tax cuts delivered a third of their total benefits to the wealthiest 1% of Americans. Their payday was staggering. As the Center for Budget and Policy Priorities detailed in 2008, in 2007 millionaires on average pocketed $120,000 from the Bush tax cuts of 2001 and 2003. Those in the top 1% were allowed to keep an extra $45,000 a year! As a result, millionaires saw their after-tax incomes rise by 7.6%, while the gains for the middle class and poor were basically stagnate.
As the Republicans try to give away billions to those who are already living high on the hog, what do they budget for health care, research on renewable energy, natural disasters, or to bring down the deficit? Do they actually put the cost of the Iraq and Afghanistan wars in their budget as Obama did in his?
While the Democratic budget cuts taxes for middle class families, and makes critical investments in health care, education and clean energy, the Republican budget released on Tuesday called for "a marginal tax rate for income up to $100,000 of 10 percent and 25 percent for any income thereafter," which would result in a massive reduction in government revenue and another generous tax break for the wealthy. They also propose to cut taxes for business, freeze most government spending for five years, halt spending approved in the economic stimulus package, and slash federal health programs for the poor and elderly. The Republican budget plan would gradually eliminate the traditional fee-for-service Medicare program, offering a stark alternative ‘voucher’ plan so the elderly would have to buy their insurance on the open market.
But please beware, Republicans are playing a shell game with the numbers: You, the taxpayer would get to choose whether you want the new tax rate or the old tax rate. This is how the Republicans offer the tax cut without factoring it into the budget's revenue – suggesting that Americans won't actually take advantage of the lower rates. Instead, the GOP budget permanently extends President Bush's 2001 and 2003 tax cuts. A Republican budget committee aid said that the revenues assumed in the GOP budget are based on the current tax structure. In other words, in order to give you, the public, a more favorable picture of the deficit their budget would create, Republicans are making the assumption that Americans will choose the higher rate – hence, the shell game.
Under the current tax code, an individual making more than $160,850 pays a 33 percent rate; under the Republican plan, that taxpayer could choose to pay 25 percent instead. (For a family, the income threshold is $195,850.) For a family earning more than $349,700, the rate rises to 35 percent, but filers could still choose the 25 percent rate. If taxpayers did decide to pay the lower rate, government revenue would plummet by roughly $300 billion per year, said economist Dean Baker of the liberal-leaning Center for Economic Policy Research. This would effectively gut most domestic programs such as healthcare and renewable energy research.
A study by the non-partisan ‘Center on Budget and Policy Priorities’ demonstrated that the Bush tax cuts accounted for half of the mushrooming deficits during his tenure in the White House – and yet Republicans want to do more of the same. What’s worse, the Republicans have not put forward any credible deficit-reduction plans. Their main alternative to Obama's stimulus plan is a $3.6 trillion tax cut for the wealthy that will add that same amount to the national debt.
Once again Republicans want to give an overwhelming share of tax cuts to wealthier Americans. Yet the GOP plan fails to invest in high priorities such as education, infrastructure, public safety and biomedical research. And their plan for Medicare is that workers under the age of 55 would no longer be allowed to buy into the program but instead receive insurance premium subsidies. The Medicare move would gut the program and turn it into a voucher system. The Republicans are basically saying to the retired and elderly who often cannot qualify for insurance on the open market “here’s a small amount against your insurance premium – if you can find someone who will insure you.” The amount of the voucher would all too quickly fall behind the rising cost of health care.
Some of the features of the GOP budget are:
• Rescinding the newly passed economic stimulus package in 2010, except for unemployment insurance for those who have already lost their job;
• Freezing non-defense, non-veteran spending;
• Converting Medicaid into an allotment to states. Turn Medicare into an insurance voucher system. (Keeping current Medicare secure for those who are now over 55.)
• Privatize Social Security – if you lose the money in the stock market it will be your tough luck;
• Make permanent the 2001 and 2003 tax cuts while setting up a parallel, simplified tax code that taxpayers could opt-in to. Taxpayers would have a choice of keeping the current system, or choosing one that would tax couples making $100,000 (or individuals making $50,000) at a10% rate and taxing those above at 25%.
• Cutting the corporate tax rate to 25% as a “job-creating measure”;
• Increasing offshore oil drilling; no cap-and-trade;
Here is a graph from Republican Paul Ryan's Wall Street Journal op-ed on the subject, because it's a blatant exaggeration. They are saying that this is based on Congressional Budget Office's Long-Term Alternative Fiscal Scenario, but the CBO has never done an analysis that runs through 2080. This graph supposedly compares the Democratic Budget and the Republican Alternative based on spending as a percentage of GDP all the way up to 2080:
The Congressional Budget Office has scored the Obama budget only through 2019, and it looks like this:
Apparently, Paul Ryan and his staff just took the CBO projections (above) that end in 2019 and drew a random line, extending upward at about a 45 degree angle, until 2080.
Census Bureau data reveal large, consistent differences in patterns of real pre-tax income growth under Democratic and Republican presidents since World War II. Democratic presidents have produced slightly more income growth for poor families than for rich families, resulting in a modest decrease in overall inequality. Republican presidents have produced a great deal more income growth for rich families than for poor families, resulting in a substantial increase in inequality. How can the average citizen not see that Republicans are in bed with the wealthy?
OMB’s Kenneth Baer was correct – the joke is on us.
Friday, February 27, 2009
Reshaping the nation’s priorities
President Obama, proclaiming a once in a generation opportunity, has proposed a forward-looking, 10-year budget that reflects his determination in the face of recession to spend his political capital in reshaping the nation's priorities. His first budget recognizes what most Democrats have been too scared or Republicans have been too ideologically blind to admit: to recover from George W. Bush’s reckless economic policies, taxes must go up – for the wealthy. Obama said his budget breaks from the recent troubled past, attributing the current economic storm to "an era of profound irresponsibility that engulfed both private and public institutions from some of our largest companies' executive suites to the seats of power in Washington, D.C."
After years of steady increase in their share of the pie, Obama is calling for tax changes that would require high-income earners to shoulder more of the load. At the same time, he wants to ease the decades-long burden carried by the middle class. He also calls for taxing private equity partners (people living off of their dividends or trusts) just like the rest of us. Under current law, multimillionaires pay tax on much of their income at about the lowest rates in the tax code. Warren Buffet acknowledged the discrepancy in saying it is unfair that his secretary pays more in taxes than he does. Under the Obama budget, these high dividend earnings would lose favored status and be taxed the same as ordinary income. But, according to officials, there will be no increase in taxes, however, until the economy recovers.
That’s fair.
Anyone who really believes in fiscal responsibility will not object to the proposed tax increases. Yet, a political fight is brewing with Republicans over not only the slightly increased tax (just 3% more) on the wealthiest Americans, but of having an economic engine based on privilege for a few.
The President projects a fiscal 2010 budget of nearly $3.6 trillion, and a deficit for the current fiscal year of $1.75 trillion — a level not seen since WWII. He wants to shrink annual deficits through higher revenues from rich individuals by allowing the Bush tax cuts for the wealthy to expire, by taxing polluting industries, reducing Iraq war costs, and through economic growth by 2010. The proposals signal a serious attempt to tame deficits in a way that restores fairness to a tax code that has been tilted in favor of the very rich for far too long, resulting in a deficit that has disproportionately burdened everyone else.
The budget cuts Obama proposes underscore the changes he seeks. He wants to cut about $5 billion in the coming year for direct payments to large corporate agribusinesses and larger farmers with more than $500,000 in annual net income. He also wants to cut $4 billion in annual subsidies to private banks that make college loans. Instead of private bank loans, he wants to steer people toward government-provided Pell Grants for needy students, increasing the maximum yearly grant for inflation. Those two cuts alone will provoke big fights with the farm and banking lobbies and their mostly Republican supporters in Congress. While Republicans and big business condemned the tax proposals, at the same time, Robert Greenstein, director of the Center on Budget and Policy Priorities, praised the budget as "bold, courageous, and honest." He said that the new budget takes on one vested interest after another (pork). It will require all of the President's skills to get it through Congress.
The President wants to overhaul health care, arrest global warming, expand the federal role in education, and shift more of the costs to the wealthiest taxpayers and corporations, especially the corporations that have made huge profits by sending American jobs overseas or to Mexico. He wants to give tax breaks to companies that hire U.S. citizens. This budget is so ambitious that it has an advantage: Even if Obama achieves only part of his goals, it will still leave a strong record of accomplishment.
Even greater than the scale of Obama's proposals is his determination to break with the conservative laissez-faire, trickle down economic principles that have dominated national politics and policymaking since Reagan. The wealthy made their wealth in America and should, in turn, be willing to support America. Those individuals who net more that 200k or married couples who net more than 250k are being asked to pay just 3% more in federal income tax. If that breaks their budgets, then they are living too high on the hog. They should quit whining, step up to the plate, and help their country instead of complaining that they are being “punished” for being rich.
President Obama’s proposals change the whole paradigm. If he is only half successful, we will have a government that helps all citizens, not just the wealthy, to live better lives. He will have reshaped the nation’s priorities.
After years of steady increase in their share of the pie, Obama is calling for tax changes that would require high-income earners to shoulder more of the load. At the same time, he wants to ease the decades-long burden carried by the middle class. He also calls for taxing private equity partners (people living off of their dividends or trusts) just like the rest of us. Under current law, multimillionaires pay tax on much of their income at about the lowest rates in the tax code. Warren Buffet acknowledged the discrepancy in saying it is unfair that his secretary pays more in taxes than he does. Under the Obama budget, these high dividend earnings would lose favored status and be taxed the same as ordinary income. But, according to officials, there will be no increase in taxes, however, until the economy recovers.
That’s fair.
Anyone who really believes in fiscal responsibility will not object to the proposed tax increases. Yet, a political fight is brewing with Republicans over not only the slightly increased tax (just 3% more) on the wealthiest Americans, but of having an economic engine based on privilege for a few.
The President projects a fiscal 2010 budget of nearly $3.6 trillion, and a deficit for the current fiscal year of $1.75 trillion — a level not seen since WWII. He wants to shrink annual deficits through higher revenues from rich individuals by allowing the Bush tax cuts for the wealthy to expire, by taxing polluting industries, reducing Iraq war costs, and through economic growth by 2010. The proposals signal a serious attempt to tame deficits in a way that restores fairness to a tax code that has been tilted in favor of the very rich for far too long, resulting in a deficit that has disproportionately burdened everyone else.
The budget cuts Obama proposes underscore the changes he seeks. He wants to cut about $5 billion in the coming year for direct payments to large corporate agribusinesses and larger farmers with more than $500,000 in annual net income. He also wants to cut $4 billion in annual subsidies to private banks that make college loans. Instead of private bank loans, he wants to steer people toward government-provided Pell Grants for needy students, increasing the maximum yearly grant for inflation. Those two cuts alone will provoke big fights with the farm and banking lobbies and their mostly Republican supporters in Congress. While Republicans and big business condemned the tax proposals, at the same time, Robert Greenstein, director of the Center on Budget and Policy Priorities, praised the budget as "bold, courageous, and honest." He said that the new budget takes on one vested interest after another (pork). It will require all of the President's skills to get it through Congress.
The President wants to overhaul health care, arrest global warming, expand the federal role in education, and shift more of the costs to the wealthiest taxpayers and corporations, especially the corporations that have made huge profits by sending American jobs overseas or to Mexico. He wants to give tax breaks to companies that hire U.S. citizens. This budget is so ambitious that it has an advantage: Even if Obama achieves only part of his goals, it will still leave a strong record of accomplishment.
Even greater than the scale of Obama's proposals is his determination to break with the conservative laissez-faire, trickle down economic principles that have dominated national politics and policymaking since Reagan. The wealthy made their wealth in America and should, in turn, be willing to support America. Those individuals who net more that 200k or married couples who net more than 250k are being asked to pay just 3% more in federal income tax. If that breaks their budgets, then they are living too high on the hog. They should quit whining, step up to the plate, and help their country instead of complaining that they are being “punished” for being rich.
President Obama’s proposals change the whole paradigm. If he is only half successful, we will have a government that helps all citizens, not just the wealthy, to live better lives. He will have reshaped the nation’s priorities.
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