Tag: Federal Budget

The Department of Homeland Security was created  a year after the attacks on the US by Arab militants on September 11, 2001. It was obvious to many of us that it was a knee jerk reaction to bolster the Bush administration’s new “war on terror.” that, eventually, led to the illegal overthrow of the sovereign government of Iraq and the current state of chaos in the Middle East, Near East and parts of Africa.

The newly Republican led congress decided to separate the funding for DHS from the omnibus bill to attempt to use it as a bargaining chip to block President Barrack Obama’s policies on undocumented immigrants. That has led to a stand off that may result in the shut down of most of DHS when funding runs out on Saturday.

GOP leaders are arguing that the three-week funding bill would keep the agency open. They’re also asking their members to vote to go to conference with the Senate. But Senate Democrats say they’ll refuse that request.

Without language overturning Obama’s actions, the GOP may not have the 218 votes necessary to approve the bill – especially with House Democratic leaders urging their members to vote against it.

Democrats are demanding a more permanent funding measure.

The Senate on Friday voted 68-31 to fund the department through the end of the fiscal year. That bill might pass the House, but only if GOP leaders are willing to accept a vote on legislation that would divide their party.

There are many reasons that this may not be the disaster that fear mongering politicians on both sides of the aisle are claiming. There are some who feel that after 14 years, this trillion dollar boondoggle needs to go.

In a commentary at The Guardian, Trevor Timm argues that the department is “George W Bush’s creation is too inefficient, wasteful and disrespectful of privacy to keep around. If Republicans want to shut it down, Democrats shouldn’t stop them.”

Besides the cost to American tax payers of $38.2 billion this year alone, there are these major issues with DHS:

Consider the DHS’ so-called “fusion centers”, which are little more than spying hubs that vacuum up information from federal and local authorities and store it for indefinite amounts of time. A scathing Senate report on the centers, which have cost the DHS at least $1.4 billion dollars, concluded that they produce “predominantly useless information” – one employee was quoted as calling it “a bunch of crap” – and that they also “run] afoul of departmental guidelines meant to guard against civil liberties” and are “possibly in violation of the Privacy Act”. While they’ve spied on many people who [were engaged in purely First Amendment protected activities, they’re not known to have stopped a terrorist attack.

The department has also been a treasure trove for local police departments, giving them millions in military grade gear and specialized spying equipment without accountability. This has lead to some very serious violations of the people’s constitutional rights.

For example, they have a program to hand out funds for local police to buy surveillance drones and give grants to cops for controversial Stingray surveillance devices, which are fake cell phone towers that allow the police to spy on entire neighborhoods at once.

They also have their own Predator drones program (without the missiles like in Pakistan and Yemen) that they fly along the US border as well. A government report released in January derided DHS’s Predator drones as almost entirely ineffective and a giant waste of money. The report didn’t even cover the alarming privacy concerns of having sophisticated spying machines constantly flying over large parts of the country.

Some of the harshest criticism of the DHS has come from within the agency. The Office of Intelligence and Analysis has been mocked by it’s own current and former employees for churning out “intelligence spam” and producing “almost nothing you can’t find on Google.”

The article also noted that the department was criticized for its inability to secure its own buildings from hackers let alone any other government offices and another Senate report that called the DHS cybersecurity “incompetant.” On top of that there is the department’s over paying by hundreds of thousands of dollars for border patrol housing, millions wasted on vehicles that were purchased without any internal oversight or guidelines and misuse of government credit cards for personal expenses to the tune of tens of thousands of dollars.

So if the Republicans can’t figure out how to pass a clean funding bill, the Democrats should just let the DHS close, doing the American tax payers a great favor.

Over the last three elections, the Democrats have lost their majorities in the House and, now, the Senate. The most likely reason is that they think a “reasonable compromise is the screw the 99% of Americans they’re suppose to represent. Prime example is the last omnibus bill to fund the federal government through September 2015. The bill negotiated by Republicans and Democrats behind closed doors over the last week is a 1600 page travesty that hands a whole mess of goodies to banks and corporations. This has caused a cry of foul by House and Senate Democrats that now endangers the bills passage.

Susie Madrak at Crooks and Liars highlighted the worst of the bill from the Washington Post article

One of the most notable changes includes dramatically expanding the amount of money that wealthy political donors could give the national parties, drastically undercutting the 2002 landmark McCain-Feingold campaign finance overhaul. Top donors would be allowed to give three times the annual cap on national party donations to three additional party committees set up for the purposes of the presidential conventions, building expenses and election recounts. [..]

For the first time, Congress also would allow the benefits of current retirees to be severely cut, part of an effort to save some of the nation’s most distressed pension plans. [..]

At domestic agencies, the EPA’s budget would be cut by $60 million, and the IRS would lose $345.6 million. The nation’s tax agency also would be banned from targeting organizations seeking tax-exempt status based on their ideological beliefs. [..]

About those pensions:

   The measure, attached to a massive $1.01 trillion spending bill, would alter 40 years of federal law and could affect millions of workers, many of them part of a shrinking corps of middle-income employees in businesses such as trucking, construction and supermarkets. [..]

The idea is reluctantly supported by some unions and retirement fund managers who see it as the only way to salvage pensions in plans that are in imminent danger of running out of money. But it also has stirred strong opposition from retirees who could face deep pension cuts and from advocates eager to keep retiree pensions sacrosanct, even in cases when funds are in a deep financial hole. The advocates argue that allowing cuts to plans would open the door to trims for other retirees later.

Marcy Wheeler, emptywheel, also found this:

the powers that be (largely Barb Mikulski and AlabamaKentucky’s Harold Rogers) stripped out the Massie-Lofgren Amendment that would have prohibited back door searches of Section 702 information and required back doors on software [..]

First, it defunds only the NSA. The original might have defunded anything that involved DOD, including FBI and CIA. [..]

That is, this replaces real legislation, supported by a huge majority in the House, with the same word games NSA has been hiding behind for over 18 months.

But the crowning insult that may very well sink the bill is the clause that essentially guts Dodd-Frank allowing big banks to engage in the same risky trading that toppled the economy in 2008.

en. Elizabeth Warren on Wednesday sought to rally opposition to the $1.1 trillion government funding bill, spearheading a revolt on the left that has put her influence in the Democratic Party to the test.

The Massachusetts liberal pleaded for House Democrats to withhold support for a government funding package due to a provision she said would change the Dodd-Frank financial reform law to let “Wall Street gamble with taxpayer money.” [..]

The provision would no longer require that big banks separate trades in financial derivatives from traditional bank accounts, which are backed by the government through the Federal Deposit Insurance Corporation (FDIC). The derivatives played a key role in the financial collapse.

Critics argue the change would leave taxpayers on the hook if trades explode. Former Rep. Barney Frank (D-Mass.) called it a “stealth attack” on his namesake achievement.

It figures that this part of the bill was written by Citicorp.

Why Representative Paul Ryan (R-WI) decided to release his latest budget proposal on April 1 will most likely not be answered except with some guffaws. Calling it the Path to Prosperity is another joke, or prank if it even gets to the House floor for a vote. It’s more like the Road to Ruin except for the 1%. His proposal cuts government spending over the next 10 years to the tune of $5.1 trillion dollars mostly on the backs of the middle class but mostly the poor. It will increase military spending:

In his plan, military spending through 2024 would actually rise by $483 billion over the spending caps established in the 2011 Budget Control Act “consistent with America’s military goals and strategies,” while nondefense spending at Congress’s annual discretion would be cut by $791 billion below those strict limits.

In all, Mr. Ryan says, spending would be cut by $5.1 trillion over the next decade. More than $2 trillion of that would come from repealing Mr. Obama’s health care initiative, the Affordable Care Act, a political move that has become much more difficult with the closing of the first enrollment period. As many as 10 million Americans have gotten health insurance through the law, either through private policies purchased on insurance exchanges, through expanded Medicaid or private policies purchased through brokers but subsidized by the law.

As with past budget proposals, Mr. Ryan seeks to eliminate the Affordable Care Act’s Medicaid expansion, then turn the health care program for the poor into block grants to the states – saving $732 billion over the decade. He would also cap and block-grant food stamps, starting in 2020, cutting that program by $125 billion in five years. The budget relies on imposing new work requirements on food stamp and welfare recipients.

Some of the headlines from The Hill tell most of the story for the rest of Ryan’s fantasies:

Ryan budget sets sights on Dodd-Frank and Ryan budget attacks Obama’s climate agenda.

Talking Points Memo‘s Sahil Kapur shines light on the biggest contradictions that will have politicians twisting to explain on the campaign trail:

The new Republican budget will adopt cuts to Medicare under Obamacare that the party is attacking Democrats for ahead of the 2014 congressional elections.

And it won’t include cuts to Social Security that Republicans bashed President Barack Obama for omitting from his budget proposal just six weeks ago.

The blueprint, to be unveiled Tuesday by House Budget Chair Paul Ryan (R-WI), will shine a light on stark contradictions in the GOP’s stance on these two programs. Slashing the retirement safety net is an overarching goal for wealthy donors and party elites, but their elderly voting base strongly opposes any cuts. While Republicans warn of a looming debt crisis if Medicare and Social Security aren’t scaled back, they’re knocking Democrats for Obamacare’s $700 billion in Medicare payment cuts to hospitals, private insurers and other providers.

A difference between this budget fantasy and Ryan’s other dreams is that it was scored by the Congressional Budget Office before its release. At FDL Action, Jon Walker points out another problem, it won’t achieve what the GOP says it wants, eliminating the deficit and a balanced budget:

The problem is that the CBO has recently downgrade its revenue projections making it harder for Ryan to meet his goal of eliminating the deficit in 10 years. If the deficit was really a top priority for Republicans they could have made the tough decision to raise taxes or put forward even more cuts spending. Instead they decided to basically cheat to get a better CBO score. [..]

This budget is a purely statement of principle by Republicans since it has no chance of becoming law or even being the starting point for a negotiation. In this statement of principle Republicans had to choose between a real plan to balance the budget or their other priorities like tax policy and defense spending. By going this route they made it clear the national debt is at best a second tier concern for them. [..]

Republicans have repeatedly had to the chance to choose between reducing the deficit and keeping taxes low for rich people and once again they proved they will pick rich people every time.

Ryan would like everyone to think he’s serious. The truth is that the is just a very bad running April Fool’s joke.

Journalist David Dayen, explains how Illinois and other states are breaking contracts with workers and slashing pensions, why workers won’t be protected by Social Security, how large are the cuts workers are facing, why public sector workers are demonized, why public pensions funds are financially safer and more politically active, how the Murray Ryan budget deal slashes federal workers pensions, why federal workers are paying the price for small reversals in sequestration and why we are almost at the Ryan far right budget.

Dayen gave a detailed explanation how these cuts hurt not just military pensions but the pensions of every federal employee who inspects our food, works in veterans hospitals, investigates crimes at the FBI and generally ensures the smooth functioning of essential government services.

What you won’t hear about this new deal: Public workers will get eviscerated, to achieve “deficit reduction”

2013 has not been a pleasant year if you work for the federal government. You’ve been subject to pay freezes, furloughs and shutdowns. One of you got yelled at by a Tea Party Republican at the World War II memorial. And if Congress passes the budget deal announced Tuesday night by Rep. Paul Ryan and Sen. Patty Murray – a big if – you will get a final Christmas present: You’ll have to pay more into your pension, an effective wage cut that just adds to the $114 billion, with a “B,” federal employees have already given back to the government in the name of deficit reduction.

The deal between House and Senate negotiators Ryan and Murray would reverse part of sequestration for 2014 and 2015, itself a major source of pain for federal workers. But negotiators want to pay for that relief in future years, with the overall package cutting the deficit by an additional $23 billion. And one of the major “pay-fors” is an increase in federal employee pension contributions. President Obama’s 2014 budget included such a proposal, which would have raised the employee contribution in three stages, from 0.8 percent of salary to 2 percent. Congress had already made this shift for new hires; the Obama proposal would affect all workers hired before 2012.

That proposed increased contribution translated to a 1.2 percent pay cut, and a total of around $20 billion in givebacks over 10 years. Negotiators were pressured by the powerful Maryland Democratic delegation, including Minority Leader Steny Hoyer, House Budget Committee ranking member Chris Van Hollen and Senate Appropriations Committee chairwoman Barbara Mikulski, into softening the blow on federal employees, many of whom live in their districts. According to Sen. Murray, the increase in contributions now equals about $6 billion over 10 years. But negotiators traded some of the cuts to federal employee pensions with different cuts to military pensions, also totaling $6 billion. So whatever the occupation, people who work for the government will bear the brunt of the pain.

It would seem the Republican Rep. Paul Ryan (WI) thinks that that he knows more about what the Defense Department needs to spend than the Generals that run the Pentagon:

   House Budget Committee Chairman Paul Ryan (R-Wis.) expressed skepticism Thursday that U.S. military leaders were being honest in their budget requests to Congress.

   “We don’t think the generals are giving us their true advice,” Ryan said during a forum on the budget sponsored by the National Journal. “We don’t think the generals believe their budget is really the right budget….

   He went on to say that while there were certainly inefficiencies that could be reduced in the Pentagon’s budget, fighting wars in the Middle East and a “dangerous world” necessitated keeping defense spending level.

   The comments were in response to a question from National Journal managing editor Kristin Roberts, who asked Ryan why the committee chose “to go against the advice of the generals” in rolling back $487 billion in proposed cuts to the Pentagon’s budget over the next decade.

Ed Kilgore at The Washington Monthly must have been smiling when he noted that the interview got even better:

   After Ryan’s initial remarks, Roberts noted that the budget was something that came from the Defense Department itself, not the Obama administration.

   “You don’t believe the generals?” Roberts asked.

   “What I believe is this budget does hollow out defense,” Ryan responded. “I believe this budget goes beyond where we should go to keep people safe.”

So this “genius” budgeter, whose party is always happy to defer to the generals when the generals say what they want to hear, is putting a couple of stars on his shoulder and dictating what the Pentagon needs to “keep people safe.” That’s particularly amazing since General Ryan is under fire from every direction for failing to offer a credible plan to reach his own arbitrary deficit reduction targets.

The Generals apparently did not take too kindly to Ryan calling them liars. This was Joint Chiefs of Staff Chairman Martin Dempsey response:

“There’s a difference between having someone say they don’t believe what you said versus … calling us, collectively, liars,” he said, according to the Wall Street Journal. “My response is: I stand by my testimony. This was very much a strategy-driven process to which we mapped the budget.”

Dempsey added that the budget “was a collaborative effort” among top military officers and combat leaders.

The military faces $487 billion in cuts in the next decade as part of a budget deal reached last summer. The cuts reflect ongoing drawdowns in Iraq and Afghanistan.

The rest, unfortunately, is behind the Wall Street Journal‘s firewall.

David Dayen had a good summery of the “spat” and just how much of a “hawk” Ryan is:

Now, keep in mind that the Obama Administration’s “cuts” to the military budget aren’t cuts. They just slow growth over time. And the Pentagon doesn’t even contemplate the mandated trigger cuts that are coming at the end of the year, which fall in large part on the defense budget. [..]

The proof that the military budgeting represented a collaborative effort, of course, is that it doesn’t cut the military budget all that much.

But it’s worth re-emphasizing that Paul Ryan called the entire military brass a bunch of liars who gave false testimony to Congress. And he will not listen to their calls for even modest trims to their funding. This makes him the very serious budget hawk in Washington.

Man the torpedoes! Full speed ahead! And damn the consequences.

 

While everyone has been focused on the Supreme Court hearings over the constitutionality of the individual mandate of the Patient Protection Affordable Care Act and the tragic murder of a black teenage boy in Florida by a “gun toting vigilante”, the Republican held House of Representatives has been up to its usual shenanigans threatening not only to shut down any infrastructure construction but now planning to shut down the government entirely. Even though they have vowed to defeat the current resident of the Oval Office, knowing they have a “friend”, the Republicans continue to make themselves more unpopular with the majority of their own constituents. This is what they have been up to while the traditional media focused on SCOTUS and a possible racially motivated murder:

The House voted down the proposed White House budget by a vote of 0 – 414. I suppose one could call that “bipartisan.” Nust up was the annual ritual of the Black Caucus Budget which failed but at least managed to garner 107 votes. Then they rejected the “Bowles-Simpson” Budget proposal, which really wasn’t, giving it only 38 votes.

Thus they finally came to Rep. Paul Ryan’s budget, which is a revision of his budget that was passed last year and soundly rejected by both sides of the aisle in the Senate. The current bill passed with a partisan vote of 228-191. All but 10 Republicans voted against the bill mostly because it didn’t cut enough. The bill has no chance of passing the Senate but its passage reignites the same issues of cutting taxes for the rich on the backs of those who can least afford it:

He again proposes tax cuts for the rich at the expense of seniors, the disabled, and children. He would cut taxes by roughly $3 trillion $4.6 trillion (according to a Tax Policy Center analysis just put out), with most of the tax cuts going to people earning more than $200,000. His proposed cuts to Medicare, Medicaid, and food assistance would all fall heavily on seniors, the disabled, and children. Ryan’s budget is doubly bad for children because his proposed cuts to public investments (mostly infrastructure and education) would cause children to inherit a country with crumbling roads and bridges and to enter the labor market with fewer skills.

It would also cut non-defense discretionary spending to lows not seen in the 50’s but raise the defense budget that the Pentagon says it doesn’t need:

Because it doles out trillions of dollars in tax cuts to the rich and corporations, the budget approved by House Republicans today – authored by Budget Committee Chairman Paul Ryan (R-WI) – would increase deficits and drive up the national debt. In fact, under the plan, “deficits would never drop below 4.4 percent of GDP, and would rise to more than 5 percent of GDP by 2022.”

Those increases would come despite the gigantic spending cuts that Ryan has in mind, which would eviscerate the social safety net and non-defense discretionary spending (even while the budget increases defense spending). As the Economic Policy Institute noted today, the plan Republicans adopted would drive discretionary spending down to its lowest level in more than 50 years.

Click on image to enlarge

The House also refused to pass the very bipartisan Senate Transportation bill managing only to pass a stop gap 90 day bill to fund current transportation and construction projects:

Despite several efforts to advance a bipartisan Senate bill championed by (Sen. Barbara) Boxer, House leaders opted for a three-month extension while they try to break a deadlock that has stalled their own proposal to fund transportation by expanding offshore oil drilling.

The extension leaves transportation financing in an increasingly precarious position.

This won’t win them any votes in the Fall

No holiday vacation for you, Mr. President.

Speaker John A. Boehner, who had urged his members on Saturday to support the legislation, did what appeared to be an about-face on Sunday when he said that he and other House Republicans were opposed to the temporary extension, part of a $33 billion package of bills that the Senate easily passed Saturday. In addition to extending the payroll tax cut for millions of American workers, the legislation extended unemployment benefits and avoided cuts in payments to doctors who accept Medicare. The measure would be effective through February.

In an interview with NBC’s “Meet The Press” , Mr. Boehner said the two-month extension would be “just kicking the can down the road.”

“It’s time to just stop, do our work, resolve the differences and extend this for one year,” Mr. Boehner said. “How can you have tax policy for two months?”

He said that Republicans wanted to extend the payroll cut for a year, but that it would have to be financed with cuts in the existing budget. When Congressional aides announced the deal on Friday, they said the items it contained were fully paid for.

If you can stand to watch the Orange Man, from Meet the Press (I’ll spare you the entire 15 minutes):

   Boehner: Well, it’s pretty clear that I, and our members, oppose the senate bill. … How can you do tax policy for two months? So, we really do believe it’s time for the Senate to work with the House, to complete our business for the year. We’ve got two weeks to get this done. let’s do it the right way.

   Gregory: So your suggesting start over, make this a one year extension. Should the Senate start from scratch?

   Boehner: No, what I’m suggesting is this. The House has passed its bill, the Senate has passed its bill. Under the Constitution, when we have these disagreements, there could be a formal conference between both chambers to resolve the differences.

Speaker Boehner is reneging on a bipartisan deal the was negotiated with the Senate and passed with a large majority of 89 votes that included 39 Republicans. The Senate has adjourned until after the holidays, so the likelihood of a conference committee at this point is not happening.

Senate Majority Leader Harry Reid has said that he won’t call the Senate back to negotiate on Mr. Boehner’s demand to negotiate an extended payroll tax cut, unemployment insurance and a doctor’s fix on Medicare reimbursement rates until after the House passes the two month stop gap bill. David Dayen at FDL has this statement from Reid’s office::

Senator Reid has been trying to negotiate a yearlong extension of the payroll tax credit with Republicans for weeks. He is happy to continue negotiating a yearlong extension as soon as the House passes the Senate’s short-term, bipartisan compromise to make sure middle class families will not be hit by a thousand-dollar tax hike on January 1.

It’s not like this bill was negotiated in a vacuum, Mr. Boehner was part of the discussion with both Reid and Senate Minority Leader Mitch McConnell and he had asked for a compromise:

The Senate majority leader, Harry Reid, Democrat of Nevada, said that Mr. Boehner had asked him and the minority leader, Senator Mitch McConnell, Republican of Kentucky, to work out a compromise on the tax cut and that it had been agreed to by both political parties.

“Neither side got everything they wanted, but we forged a middle ground that passed the Senate by an overwhelming bipartisan majority,” Mr. Reid said in a statement. “If Speaker Boehner refuses to vote on the bipartisan compromise that passed the Senate with 89 votes, Republicans will be forcing a thousand-dollar tax increase on middle-class families on Jan. 1.”

If the House leadership thinks that this tactic is going to help the GOP chances of holding the House and taking back the Senate and White House from the Democrats, I have a couple bridges I’d like to sell him.

The deadline for the bicameral Super Committee to come up with a deal on deficit reduction is a week away. While many American’s don’t think that the committee will meet the deadline thus triggering large mandated budget cuts to defense and entitlements, we have President Obama warning the committee not to “cheat” by changing the law so that those cuts, particularly to the Defense, would not go into effect should the committee fail. Meanwhile, the committee’s Democratic members are proposing a $2.3 trillion tax-and-cut proposal “that includes $400 billion in Medicare and Medicaid reductions,” but only if Republicans compromise by putting new tax revenues on the table that in the end would only amount to $350 billion in new tax revenue.

The other really unacceptable proposal that the Democrats have put on the table to get the Republicans to agree to a paltry $350 billion in tax revenues, is making the Bush/Obama tax cuts permanent, even though the White House has said that President Obama would veto any bill that made those cuts permanent. Perhaps they are counting on Obama doing his usual last minute capitulation and he would sign the bill.

The Democrats are scrambling to try to make this look like a good deal but it’s not. Letting the Bush/Obama tax cuts expire would solve more of the deficit problem than anything that this committee or Congress has proposed by increasing tax revenues $1 trillion over the next 10 years. To their credit though, the Democrats have rejected the Republican offer that would cut all the tax rates across the board by 20%, lowering the top tax bracket to 27% from 35% assuming the Bush tax cuts would be extended. This would reduce tax revenues by $200 billion in just one year.

This is a muddled mess that is not really a crisis at all and in the long run won’t create any jobs but deepen the economic crisis that has been created by the burst of the housing bubble, job killing foreign trade agreements, unfair tax codes and the lack of banking regulation.

John Aravosis at AMERICAblog nails what has exacerbated much of problem: the Democrats negotiating techniques, or rather, the lack of them. The Republicans negotiate while the Democrats come to the table and offer their bottom line, so there is nowhere to go but to cave to Republican demands:

Note how the Republicans are still skewing their proposals towards large budget cuts and little tax increases, whereas the Democrats are offering 50-50 budget cuts and tax increases. That means that if both parties make concessions as they move to the “middle” – which is highly unlikely, the Dems will cave while the Rs will stay put – the “middle” will be a point at which there are more budget cuts than tax increases. Why? Because the Democrats, as always, are making their final offer – half tax increases, half budget cuts – first, so there’s nowhere to go but down.

This had been the Democratic approach since 2006 when the party gained control of both houses of Congress. It’s no wonder that voters are disgusted with both parties and that the Democrats lost the House in 2010. By gutting our social safety networks to protect the wealthy and appease the Republicans, the Democrats could well lose more in 2012 if they don’t start listening to the demands of the American people.

h/t to DCblogger at Corrente

Scarecrow at FDL observed this morning, “Dems discover GOP is nuts. Who knew?” I have no idea what took them so long but I am worried that they will just enable the insanity by going along with INSANE ideas like making the Bush tax cuts permanent for tax increases that will impact on the already tax burdened 99%.

Brian Buetler at TPM thinks that the Super Committee is heading for a catastrophe:

A key member of the Senate Democratic leadership team has openly predicted the panel will gridlock and fail, and placed the blame squarely on Republicans.

As GOP committee members met privately, Maryland Rep. Chris Van Hollen – a Democrat on the panel – told Bloomberg, “You need to close some of these tax loopholes and you need to generate additional revenue. And so that balance is going to be important. We saw the dueling letters just last week. We had a bipartisan group in the House that said, ‘Look, everything is on the table including revenues – tax revenues.’ And within 24 hours you had 33 [Republican] Senators say, ‘no new net tax revenues.'”

Republicans responded with a trial balloon, provided first to Wall Street Journal editorial writer Stephen Moore. “One positive development on taxes taking shape is a deal that could include limiting tax deductions, perhaps by capping write-offs on charities, state and local taxes, and mortgage interest payments as a percentage of each tax filer’s gross income,” he wrote. “In exchange, Democrats would agree to make the Bush income-tax cuts permanent. This would mean preventing top rates from going to 42% from 35% today, and keeping the capital gains and dividend tax rate at 15%, as opposed to plans to raise them to 23.8% or higher after 2013.”

That “trial balloon” is in now way a “positive development” for the economy or the 99%:

This isn’t offered as a concession Republicans are willing to make in exchange for entitlement cuts – a key Democratic demand. It’s designed as a concession Republicans are willing to make if Democrats will agree to make all of the Bush tax cuts permanent – and thereby throw away an enormous amount of leverage they have over Republicans who are committed to extending them.

Democrats, thus, would be expected to agree to throw in entitlement cuts anyhow , just because. And to underscore the downside, the non-partisan Congressional score keepers would likely score this as a giant budget buster – not the trillion-plus-dollar deficit reducing deal the panel is supposed to be pursuing.

Yes, this is another version of the insanity of the last 30 years that keeps getting a resuscitated like a bad plot in a porn flick. And the Democrats are just realizing that this latest rewrite is INSANE:

A Democratic aide with knowledge of the GOP offer called their ideas “ludicrous”

“This is another effort for them to spin that they are being reasonable, but what they’ve put on the table is so insanely unreasonable that I actually think it moves the ball in the opposite direction,” the aide told NBC News.

“It’s devious, because it looks in some respects reasonable on the surface, but it’s a totally unreasonable proposal.”

According to the aide, in order to raise $300 billion in tax revenue and lower the top individual tax rate to 28 percent, you would need to “decimate all tax expenditures” and increase taxes on capital gains and dividends, something he doubts Republicans would support.

It’s unclear whether the $300 billion would be part of a deficit reduction deal with overall savings north of $2 trillion, or, more likely, a minimum package of $1.2 trillion in deficit reduction. Aides are split over how lofty of a target to set.

The aide also noted that CBO has reported that making the Bush tax cuts permanent would increase the deficit by $4 trillion in the next 10 years.

The reality check here is that you cannot raise $300 billion dollars in tax revenues and drop the top rate to 28 percent without touching capital gains and dividends. Republicans really want those Bush tax cuts made permanent do badly they are willing to pretend that they are throwing Grover Norquist off the bus. Reality, Grover, while feigning strong disapproval, is most likely praying that this passes.

 

Despite the clear evidence that austerity budgets will hurt the stagnating economy, that tax cuts and focusing on the debt and deficit do not create jobs, President Barack Obama will present a $300 billion program that will propose more of the same. The Democrats on the bipartisan Congressional Super Committee that was created to solve the problem of the deficit, taxes and job stimulus, has taken a lead from Obama, more cuts, please:

The key dilemma facing President Obama and Congressional Democrats is that Republicans are wholly unwilling to support any new job-creating spending projects — even projects with bipartisan support — unless they’re offset with spending cuts or savings elsewhere in the budget.

Thus, Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs.

Guess where those cuts will come from? Social Security (which does NOT contribute to the deficit), Medicare and Medicaid with President Obama leading the way:

In the speech Thursday, Obama will challenge the 12-member congressional supercommittee to exceed its $1.5 trillion goal for budget savings – setting a higher target that would allow the additional money to fund tax breaks and other stimulus spending. But the “very specific” deficit recommendations that Obama promised last month won’t come until after the speech, although the exact timing is unclear, White House officials said.

snip

The deficit plan will be more specific than the framework the White House released in April. It is likely to include some unpopular measures that, until now, Obama backed only behind closed doors during the July talks with House Speaker John Boehner (R-Ohio), according to Democratic officials familiar with proposal.

Before the “grand bargain” fell apart over tax revenues, Obama and Boehner agreed on about $250 billion in proposed cuts to Medicare, including gradually raising the eligibility age to 67 and hiking co-pays and premiums for wealthier beneficiaries. They also agreed to change the inflation calculator for Social Security and other federal programs . . . .

Most polls indicate Americans believe the country is on the wrong track and that the president is doing a poor job handling the economy and yet all that is being put forward are the same ideas that put this country into this hole. Contrary to what Obama seems to think, his plan will not attract moderate and independent voters he so desperately needs in next year’s elections.