OFF THE CLIFF!

[Townsend]

Republican Doomsday Plan: Cave on Taxes, Vote 'Present'

http://abcnews.go.com/blogs/politics/2012/12/republican-doomsday-plan-cave-on-taxes-vote-present/

Republicans are seriously considering a Doomsday Plan if fiscal cliff talks collapse entirely.  It's quite simple:  House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more:  no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes.  Congress would recess for the holidays and the president would face a big battle early in the year over the debt ceiling.

Two senior Republican elected officials tell me this doomsday plan is becoming the most likely scenario.  A top GOP House  leadership aide confirms the plan is under consideration, but says Speaker Boehner has made no decision on whether to pursue it.

Under one variation of this Doomsday Plan, House Republicans would allow a vote on extending only the middle class tax cuts and Republicans, to express disapproval at the failure to extend all tax cuts, would vote "present" on the bill, allowing it to pass entirely on Democratic votes.

By doing this, Republicans avoid taking blame for tax increases on 98 percent of income tax payers.  As one senior Republican in Congress told me, "You don't take a hostage you aren't willing to shoot."  Republicans aren't willing to kill the middle class tax cuts, even if extending them alone will make it harder to later extend tax cuts on the wealthy.

Rep. Tom Cole, R-Okla., an influential conservative House Republican, is already on record supporting extending the middle class tax cuts — with or without the upper income tax cuts.  On Sunday, he said Republicans should embrace the extension of the middle class tax cuts and take credit for it.

"That's a victory, not a loss," Cole said on This Week with George Stephanopoulos.  "And then we're still free to try and fight over higher rates, offering revenue, which the Speaker has put on the table."
Last week, Boehner said he disagreed with Cole.  But now a version of what Cole has called for looks more and more likely to happen.

Still unclear under this plan is what would happen to the automatic defense cuts — "sequestration" — scheduled to go into effect on January 1 without a deficit deal.  During the campaign, the President promised the cuts would not happen.  As part of the deal to allow the House vote on taxes, those automatic defense cuts could be put off for a year.

[Townsend]

Pressure mounts for a House vote on tax cuts

http://www.cnn.com/2012/12/03/politics/fiscal-cliff/index.html

Washington (CNN) -- The Senate passed it. President Barack Obama says he'll sign it. Polls show most Americans want it.

Now Democrats say they will try to force House Republicans to hold a vote on a proposal to prevent higher income taxes for 98% of the nation starting next year while raising the rate on income over $250,000.

With Republicans opposing any kind of tax-rate increase, the fight continues to stymie congressional negotiations on reducing chronic federal deficits and debt.

This time, the public brinksmanship comes with a looming year-end deadline for the fiscal cliff of automatic tax hikes and deep spending cuts.

Without a deal, taxes for everyone go up on January 1, when lower rates enacted during the administration of George W. Bush are set to expire.

Fresh off his re-election victory, Obama demands that the GOP-led House immediately pass a Senate measure that keeps tax rates at current levels for income up to $250,000, while allowing the rate to rise for earnings above that threshold.

A central theme of Obama's first term and re-election campaign, the plan would increase revenue by almost $1 trillion over 10 years, providing a significant portion of the $4 trillion in overall deficit reduction sought by both sides.

However, Republicans led by House Speaker John Boehner object to any increase in tax rates, even for higher levels of income earned by 2% of Americans.

Republicans, instead, propose eliminating unspecified tax deductions and loopholes to generate more revenue as part of a broader deficit-reduction plan.

For the GOP, an agreement must include major reforms of entitlement programs such as the Medicare and Medicaid government-run health care programs for senior citizens, the disabled and the poor.

On Sunday, House Democratic leader Nancy Pelosi threatened a procedural move that would, at the least, require Republicans to publicly state their opposition to avoiding the fiscal cliff tax hike on everyone.

"If Speaker Boehner refuses to schedule this widely-supported bill for a vote, Democrats will introduce a discharge petition to automatically bring to the floor the Senate-passed middle class tax cuts," Pelosi said in a statement. "We must find a bold, balanced and fair agreement to avoid the fiscal cliff. The clock is ticking and stalemates are a luxury we cannot afford."

Under a "discharge petition," a bill can be brought to the floor without going through a committee or without approval of House leadership. The bill would need majority support -- or 218 votes -- to pass.

In the current lame-duck session of Congress, there are 192 Democrats in the House, so at least 26 Republicans would have to defect for Pelosi's motion to succeed.

Some House Republicans, including Rep. Tom Cole of Oklahoma and other conservative voices, have called for passing the tax plan sought by Obama and Democrats to allow the broader negotiations to move forward.

Cole and fellow conservative Rep. Tim Scott both said last week they believed that Senate tax measure would pass if brought to a vote in the House.

However, Cole made clear he would follow the directions of the leadership, tamping down the chances of a GOP revolt against Boehner over the issue.

Boehner has so far rejected any increase in tax rates, even if only for the wealthiest Americans, saying his offer to include additional revenue by eliminating some loopholes and deductions was a major concession.

On Sunday, he described the latest Democratic proposal for a broader deficit reduction plan as one-sided and unworthy of discussion.

"The president's idea of a negotiation is, 'Roll over and do what I ask,'" Boehner told Fox News Sunday, describing himself as "flabbergasted" by the plan put forward last week by Treasury Secretary Tim Geithner. "I looked at him and I said, 'You can't be serious.'"

Such posturing on both sides reflects the mistrust built up over two years of deficit wars that have left Congress with a reputation of dysfunction.

Failure to reach a deal to avert the fiscal cliff and devise a framework for a broader deficit reduction package to be negotiated when the new Congress is seated in January would cause certain economic turmoil and threaten the U.S. credit rating.

The Bush administration tax cuts of 2001 and 2003 already were extended by two years as part of budget negotiations earlier in Obama's term.

In addition, spending cuts of $1 trillion over 10 years also kick in next year, the result of the Republican-led standoff over raising the federal debt ceiling in 2011 that led to a U.S. credit rating downgrade.

Sharp tax increases and automatic spending cuts would cut the projected federal budget deficit nearly in half -- but also would threaten millions of jobs, especially those dependent on government contracting, and risk a return to recession, according to the non-partisan Congressional Budget Office.

The non-partisan Tax Policy Center estimates middle class families would pay about $2,000 a year more in taxes without another extension of all the Bush tax cuts, as sought by Republicans.

Without a deal in the lame-duck Congress, each side wants the other to get the lion's share of public blame for higher taxes and economic uncertainty.

The plan that Geithner presented to Republicans last week called for $1.6 trillion in new taxes, including the rate hike for income over $250,000.

"There's not going to be an agreement without rates going up," Geithner told CNN in an interview aired on Sunday. "If they are going to force higher rates on virtually all Americans because they're unwilling to let tax rates go up on 2 percent of Americans, then, I mean that's the choice they're going to have to make.

Obama also wants to close loopholes, limit deductions, raise the estate tax rate to 2009 levels and increase taxes on capital gains and dividend taxes.

In addition, the Obama proposal calls for a new $50 billion stimulus package, a home mortgage refinancing plan, and an extension of unemployment insurance benefits. It also would extend the payroll tax cut passed early in Obama's administration.

In return, multiple sources told CNN that Obama is offering $400 billion in new cuts to Medicare and other entitlement programs -- with specifics decided next year.

According to a CNN/ORC International Poll released last week, 56% of people said taxes should be kept high to help lower-income people, while 36% said taxes should be kept low to create jobs.

Another survey, by ABC News and the Washington Post, showed two-thirds of respondents supported Obama's call for holding down tax rates for everyone but the wealthiest Americans.

Boehner, however, blamed Obama for what he described as avoiding the tough steps needed to achieve significant deficit reduction.

"We've put a serious offer on the table by putting revenues up there to try to get this question resolved, but the White House has responded with virtually nothing," Boehner said.

To Geithner, Republicans "are in a hard place, and they're having a tough time trying to figure out what they can do, what they can get support from their members for."

"That's understandable," Geithner said. "This is very difficult for them, and we might need to give them a little more time to figure out where they go next."

Mark Zandi, chief economist for Moody's Analytics, predicted on the CBS program "Face the Nation" that lawmakers would reach a short-term deal that would limit the economic damage, extend the U.S. debt ceiling to avoid another standoff like the one in 2011 and lay down a framework for future deficit reduction talks.

[Townsend]

BREAKING: House GOP offers fiscal cliff counterproposal

http://politicalticker.blogs.cnn.com/2012/12/03/breaking-house-gop-offers-fiscal-cliff-counterproposal/?cid=sf_twitter

(CNN) – House Republicans are making a counter-offer Monday to the White House on a fiscal cliff deal, but they continue to reject President Barack Obama's call for higher tax rates on the wealthy.

The new proposal to avoid the fiscal cliff would bring $2.2 trillion in savings over the next decade. These would include $800 billion from tax reform, $600 billion from Medicare reforms and other health savings, and $600 billion in other spending cuts, House GOP leadership aides said Monday.

[Gaspar]

I'm sure you'll bank on this one too.

Oh!  Hey!  Look! It's that time again?
http://www.washingtontimes.com/blog/inside-politics/2012/nov/30/despite-cliff-preparations-obama-hawaii-vacation/

The prospect of pitching over the federal "fiscal cliff" isn't stopping the White House from moving forward with President Obama's year-end Hawaii vacation plans.

Even as Republicans and Democrats report minimal progress so far in talks to meet a deadline to avoid sharp tax hikes and spending cuts, the White House was moving forward with the first family's and friends' $4 million vacation to Mr. Obama's native state.

Residents living near the beachfront homes in Kailua where President Obama has vacationed every year since 2008 received alerts this week about the restrictions and expected travel disruptions associated with the president and first family's visit, according to a story in the Hawaii Reporter.



http://www.examiner.com/article/kailua-hawaii-welcomes-barack-obama-5th-year-vacation

[Townsend]

Oh!  Hey!  Look! It's that time again?

Is he on vacation or are there plans being made?

There are no proposals and counters?  Nothing being said from either side?

Should there be no plans made until everything is locked and signed or should SS and the rest of the offices make plans so that all things can go as smoothly as possible?

[Townsend]

BREAKING: House GOP offers fiscal cliff counterproposal

That didn't take long:

White House: GOP offer 'does not meet the test of balance

http://www.politico.com/politico44/2012/12/white-house-gop-offer-does-not-meet-the-test-of-balance-150949.html

The White House rejected the House Republican counter offer on solving the fiscal cliff — leaving both sides in stalemate over tax rates.

"The Republican letter released today does not meet the test of balance. In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill," White House communications director Dan Pfeiffer.

Congressional GOP leaders rejected President Obama's $1.6 trillion dollar deficit reduction offer last week, proposing their own $2.2 trillion package. The House-backed package does not raise taxes on the wealthy — something that the White House has insisted on in order to bring "balance" to the overall package.

"Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve. Independent analysts who have looked at plans like this one have concluded that middle class taxes will have to go up to pay for lower rates for millionaires and billionaires.  While the President is willing to compromise to get a significant, balanced deal and believes that compromise is readily available to Congress, he is not willing to compromise on the principles of fairness and balance that include asking the wealthiest to pay higher rates," Pfeiffer said.

"President Obama believes – and the American people agree – that the economy works best when it is grown from the middle out, not from the top down.  Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won't be able to achieve a significant, balanced approach to reduce our deficit our nation needs," he said.

The stalemate leaves both sides clinging to their original negotiating positions on tax rates — with the White House demanding upper income bracket tax increases and the House Republicans refusing to cave.

Without any action by Congress, tax rates will automatically revert to 2001 rates on all tax payers.

UPDATE: "Republicans have once again offered a responsible, balanced plan to avoid the fiscal cliff, and the White House has once again demonstrated how unreasonable it has become.  If the President is rejecting this middle ground offer, it is now his obligation to present a plan that can pass both chambers of Congress," House Speaker John Boehner spokesman Brendan Buck said in a statement.

[Gaspar]

Is he on vacation or are there plans being made?

There are no proposals and counters?  Nothing being said from either side?

Should there be no plans made until everything is locked and signed or should SS and the rest of the offices make plans so that all things can go as smoothly as possible?

Well of course not, and I'm sure he wouldn't' dream of up-and-leaving without taking the reigns and getting all parties to agree on a compromise.

I mean the last few years when the budget went down to the wire he stuck around and hammered out. . .Oh! Wait!  No, he kicked the can, headed for the islands, and well here we are again.

Lets see.  So far he offered a $1.6 trillion deal with no specifics on the cuts (just a framework as he put it).  The House Countered with a $2.2 trillion dollar plan just moments ago http://thehill.com/homenews/house/270649-house-republicans-make-22t-counter-offer-to-obama-in-debt-talksklj with very specific cuts and $800 billion in new tax revenues from cutting deductions. But there was no new taxes on businesses and the evil rich, so it was flat rejected.

Now here we sit all broken hearted tried to . . .

He has nothing to lose and everything to gain from heading off the cliff.  It will be played out as the fault of congress, and it will open the door for continued campaigning for new Dem mid-term challengers.  The president will continue to be able to do what he does best, campaign, while at the same time gaining a new group to blame for EAVVVERYTHING.  It's a freekin Win/Win for him.  The only people that pay for it are the peasants.

Rejoice, your Lord and Saviour shall be exalted on Kauai! 

[nathanm]

He has nothing to lose and everything to gain from heading off the cliff.  It will be played out as the fault of congress, and it will open the door for continued campaigning for new Dem mid-term challengers.  The president will continue to be able to do what he does best, campaign, while at the same time gaining a new group to blame for EAVVVERYTHING.  It's a freekin Win/Win for him.  The only people that pay for it are the peasants.

Oh my god, a Democrat seems to have outwitted the Republicans politically! Isn't that illegal? (Welcome to 2011, glad you finally made it)

Seriously, he's doing exactly what he said he'd do when out on the campaign trail. Sorry that less than 48% of the electorate agreed with you. Given how much you complained about how little he actually said about a second term, I'm surprised you aren't commending him for following through on the thing he ran on.

[Teatownclown]

So, the President Is Standing Up to the GOP. Huh.
Monday, 03 December 2012 11:16
By John Aravosis, AMERICAblog | Op-Ed

So this is fun.
I was listening to NPR the other morning, and they were saying that the Republicans are livid that President Obama stuck to his guns on his "fiscal cliff" offer regarding phasing out the tax cuts for the rich.
You see, NPR explained, the Republicans figured the President would make an offer, then start negotiating with himself, undercutting his own position, while the Republicans just sat back and watched.
But a funny thing happened this time. He didn't. The President is sticking to his guns and demanding the GOP let the Bush tax cuts for the rich expire. And Democrats are pleasantly surprised to be able to say, "now that's the guy I voted for."
It shouldn't be a surprise in principle that the President is standing up to the GOP. The President won the election, and he was quite clear throughout that if he was re-elected, he'd get rid of the Bush tax cuts for the rich.
What's probably motivating the White House more are the polls. Not only have recent polls shown that a large majority of Americans, 67%, want tax increases included as part of the budget deal, but even Republicans support the notion 52-44, and even conservative Republicans are on board, 51-45. That means, congressional Republicans don't even represent conservatives in their party, let alone the rest of their party or the rest of the nation.
And the President knows it, and he's playing it. The poll also showed that the public at large, and independents in particular, would blame the GOP more than the President if the talks fail.
Now, the President has had polls on his side before, and not quite seemed to have taken full advantage of them. Back in 2010, the polls were showing that the public wanted Washington to cut the deficit, keep entitlements and tax the rich.
The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they're against an increase in the gasoline tax.
Peter Baker in the NYT has a delicious "news analysis" of the current standoff entitled, "Pushing G.O.P. to Negotiate, Obama Brings End to Giving In."
Obama brings end to giving in. Imagine that.
Mr. Obama, scarred by failed negotiations in his first term and emboldened by a clear if close election to a second, has emerged as a different kind of negotiator in the past week or two, sticking to the liberal line and frustrating Republicans on the other side of the bargaining table.
Disciplined and unyielding, he argues for raising taxes on the wealthy while offering nothing new to rein in spending and overhaul entitlement programs beyond what was on the table last year. Until Republicans offer their own new plan, Mr. Obama will not alter his. In effect, he is trying to leverage what he claims as an election mandate to force Republicans to take ownership of the difficult choices ahead.
His approach is born of painful experience. In his first four years in office, Mr. Obama has repeatedly offered what he considered compromises on stimulus spending, health care and deficit reduction to Republicans, who either rejected them as inadequate or pocketed them and insisted on more. Republicans argued that Mr. Obama never made serious efforts at compromise and instead lectured them about what they ought to want rather than listening to what they did want.
You know what? Bite me. The Republicans long ago taught themselves that lying is the best medicine. The only way to win over the public, the GOP figured, was to lie to them. That's why they created Fox News. And it's why they regularly lie about science (be it climate change or evolution), and pretty much every position they hold. Tax cuts won't balloon the deficit. Iraq really has WMD (and the war will be a snap). Gay marriage will force straight men to divorce their wives. And the President has always refused to compromise with Republicans.
When has the President ever refused to compromise with Republicans? If anything, Democrats have been annoyed with the President's seemingly endless efforts to compromise with both Republicans and himself. The stimulus was a compromise (and then the Republicans voted against it anyway). Health care reform was as compromise (and then the Republicans pretended it was a federal takeover of health care when it wasn't). Backing off of climate change was a compromise. Proposing off-shore drilling was a compromise. When hasn't this President compromised?
Though, the President's compromises did become less compromising in the last two years of his first term, as he grew to fully appreciate how duplicitous the Republicans really were. So now, he's actually standing up to them, full bore, and they don't like it one bit.
This is what the President refused to do at the beginning of his first term – use his electoral mandate, use the polling in his favor, and fight from a position of strength for what he thinks is right.
Oh, and I read that the President is also demanding that Republicans let Medicare negotiate drug prices with Big Pharma, so that we can stop paying the exorbitant 300% to 500% mark-up that Big Pharma charges Americans to help pay for subsidized drug prices in Europe. If the President is serious about this, this is a battle, even in the face of Big Pharma big money, that he can win (good luck explaining to the American people why they, and their government, should continue to pay 5x the price for Advair in order to subsidize cheap prices in France).
Now, will he hold firm? I dunno. And to some degree, that's our job to help hold him firm. But having the President recognize his own strengths in this negotiation is a darn good beginning to a second term, and it's just the change I've been needing.
This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source. http://truth-out.org/opinion/item/13118-so-the-president-is-standing-up-to-the-gop-huh

Off the cliff!

[Townsend]

The House Countered with a $2.2 trillion dollar plan just moments ago http://thehill.com/homenews/house/270649-house-republicans-make-22t-counter-offer-to-obama-in-debt-talksklj with very specific cuts and $800 billion in new tax revenues from cutting deductions.

Here's a simple question.  Cutting what deductions?

[Gaspar]

Here's a simple question.  Cutting what deductions?

Did you not read the letter to the president from The Boner?

It combines the 2013 budget passed by the house with the eliminations in deductions from the President's own Simpson Bowels plan.  Damn! That sounds like compromise.

Eliminate all tax expenditures—for both income and payroll taxes—except for the child credit, the earned income tax credit, foreign tax credits, a few less common preferences (retain reduced preferences for mortgage interest, employer-sponsered health insurance and reitrement savings in the third variant listed above).

Eliminate the alternative minimum tax (AMT).

Eliminate the phaseout of personal exemptions and the limitation of itemized deductions.

Replace the current six-bracket individual tax rate schedule with a three-bracket schedule with rates of 9, 15, and 24 percent (12, 20, and 27 percent in the third variant listed above).

Tax capital gains and dividends as ordinary income.

Index tax parameters using the chained Consumer Price Index.

Increase the Social Security wage base by 2 percent per year more than the growth in the average wage (making the FICA cap $140,100 in 2015).

Phase in an increase in the federal excise tax on gasoline of 15 cents per gallon (13.5 cents per gallon on average in 2015).

Eliminate corporate tax expenditures and reduce the corporate tax rate to 26 percent (27 percent in the third variant listed above).

The plan is no longer listed on the White House website, but you can find it here: http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf

MSNBC probably didn't want to post the letter, so here it is: http://www.speaker.gov/press-release/house-gop-leaders-make-new-offer-avert-fiscal-cliff

[Townsend]

The plan is no longer listed on the White House website, but you can find it here: http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf

MSNBC probably didn't want to post the letter, so here it is: http://www.speaker.gov/press-release/house-gop-leaders-make-new-offer-avert-fiscal-cliff

That plan's from 2010 and the letter doesn't outline any deduction cuts.

[Gaspar]

That plan's from 2010 and the letter doesn't outline any deduction cuts.

I suppose you would have to read it.

"With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and the Senate, and be signed into law in the next couple of weeks.  The best way to do this is by learning from and building on the bipartisan discussions that have occurred during this Congress, including the Biden Group, the Joint Select Committee, and our negotiations leading up to the Budget Control Act.

For instance, on November 1 of last year, Erskine Bowles, the co-chair of your debt commission, presented the Joint Select Committee with a middle ground approach that garnered praise from many fiscal watchdogs and nonpartisan experts.  He recommended that both parties agree to a balanced package that includes significant spending cuts as well as $800 billion in new revenue.

Notably, the new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our economy.  Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.  On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.  These cuts would be over and above the spending reductions enacted in the Budget Control Act."

[Townsend]

"With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and the Senate, and be signed into law in the next couple of weeks.  The best way to do this is by learning from and building on the bipartisan discussions that have occurred during this Congress, including the Biden Group, the Joint Select Committee, and our negotiations leading up to the Budget Control Act.

For instance, on November 1 of last year, Erskine Bowles, the co-chair of your debt commission, presented the Joint Select Committee with a middle ground approach that garnered praise from many fiscal watchdogs and nonpartisan experts.  He recommended that both parties agree to a balanced package that includes significant spending cuts as well as $800 billion in new revenue.

Notably, the new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our economy.  Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.  On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.  These cuts would be over and above the spending reductions enacted in the Budget Control Act."

How is that outlining the cuts?

Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.  On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.  These cuts would be over and above the spending reductions enacted in the Budget Control Act."

What special-interest loopholes and deductions?

[Townsend]

Gaspar, this is what I'm seeing as a descriptive of your plan:

The offer made the following proposals to achieve $2.2 trillion in new deficit reductions over 10 years:

* $800 billion in new revenue through tax reform;

* unspecified healthcare program savings of $600 billion;

* other savings from changes to unspecified mandatory spending programs of $300 billion;

* tying cost-of-living increases for federal benefit programs to the Consumer Price Index to get savings of $200 billion;

* and further unspecified savings to domestic spending programs of $300 billion.

"unspecified" seems to be there in most all of them.