Tag: Politics. Congress

The do nothing Congress will slither out of town seven weeks before the election to hit the campaign trail and leaving a pile of work for November when they return for the lame duck session. Not that most of them aren’t lame now. They had originally been scheduled to work through to the first week of October.

The one bill that will be passed is the bill to keep the government funded once the new fiscal year begins Oct.1. It has already passed the House and is set for a vote in the Senate later this week. it will find the government through to March 27, 2013. The other legislation that will pass at least the House is a resolution expressing disapproval of President Obama’s handling of welfare reform. The administration agreed to to waive existing work requirements for those who receive welfare benefits if states can demonstrate better programs for employing and retaining workers. This waiver was requested by Republican governors, as well as, Democrats and the plans must be approved by the administration. In other words the House Republicans are disapproving something they requested.  

Bur much of what won’t be accomplished could drastically hurt the middle class and the economy.

What’s next for farm bill?

Greatest fallout from deadline miss: uncertainty

The 2008 farm bill, a law including crop insurance, disaster programs and other aid for farmers, along with conservation and food stamp programs, is set to expire Sept. 30, the end of the federal fiscal year. Some key programs could cease or run out of money without a new farm bill.

But farmers and ag policy experts say the most dramatic effects won’t happen until 2013. That’s when farmers will start to plant next year’s crop. Many farm programs operate onthe crop year, not the fiscal or calendar years. [..]

If Congress doesn’t do anything, food prices could soar. That’s because without a new farm bill, the law reverts back to a 1949 farm bill that essentially committed the federal government to purchase crops at fixed prices. But with more than 60 years since those prices were set, in most cases the government would be paying far more than what those crops receive today.

There is the legislation that would provide reforms for the Postal Service, which is plagued by financial shortfalls, and an extension of the Violence Against Women Act, a normally bipartisan bill that authorizes program funding for victims of domestic and sexual abuse.

The biggie is the expiring tax measures, the Bush/Obama and the Payroll tax holiday, and unemployment benefits, that will end December 31. As reported in Politico the House Ways and means Committee, which generates tax bills will meet in a rare closed session on Thursday. They will also meet with the Democratic-led Senate Finance Committee to discuss capital gains taxes.

David Dayen at FDL News Desk isn’t confident that the talks will include an extension of the Payroll Tax Holiday but thinks that this whole sequester mess will kicked down the road:

There’s no guarantee that the payroll tax cut will factor into these negotiations, but they should – or at least something that brings a commensurate level of fiscal accommodation, which preferably doesn’t put the Social Security Trust Fund at risk. The expiration of the payroll tax cut will take $125 billion out of the economy. That’s less than the Bush tax cuts, although since most of those accrue to the rich, the payroll tax cut could have a higher fiscal multiplier. And it’s a larger pullback in fiscal policy than the first year of the sequester, which would take roughly $110 billion out of the economy. [..]

I would like to find the economist who believes that the US can handle taking $125 billion out of the economy without an effect, especially $125 billion targeted loosely (though not as well as Making Work Pay) at those with a high propensity to spend. [..]

It’s entirely possible that everything gets punted for a period of time while opening up some breathing space for Congress to figure the mess out. But I doubt that includes the payroll tax cut. That’s decent enough news for Social Security, but it’s not really good news for the economy.

As a postscript, you gotta love this from a defense lobbyist:

   “Regardless of who wins, the big deal will have tax increases and spending cuts,” said one defense lobbyist, who asked not to be identified. “The ratio will just be different. With taxes playing a smaller role in a Republican plan, entitlement programs like Medicare will have to play a bigger one to protect defense.”

Surely we can all agree that Lockheed Martin needs the money more than an 85 year-old on a fixed income.

Lets see if Obama sticks to his promise to veto any bill that extends the Bush/Obama tax cuts for those who make over $250,000.

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.

 

Yes, we are still playing and the Republicans have the advantage. So far they have won 98% of everything they asked for and are still holding hostages. The new extra-constitutional super committee of 12 will start work on the next round of hostage negotiations. Composed equally of Democrats and Republicans, three of each from the Senate and the House, the committee is tasked with finding $1.2 trillion in deficit cuts. Here are the members that have been selected by the leadership:

Democrats

• Sen. Patty Murray (WA) was selected by Reid to be co-chair of the committee. “The Mom in Tennis Shoes” is the chair of the Democratic Senatorial Campaign Committee. The feeling is that she will consider the electoral implications of the policy decisions.

• Sen. John Kerry (MA) is the chairman of the Senate Foreign Relations Committee and is expected to be central to cutting defense spending.

• Sen. Max Baucus (MT) is the chairperson of the Senate Finance Committee and is expected to be the leading voice on tax policy.

None of these Senators were part of the “Gang of Six” that was working with Vice President Joe Biden. They are not particularly trusted by liberals and some feel that Kerry is the weakest link. Baucus who was on the original Cat Food Commission, dissented because of cuts to Social Security and Medicare. He is also protective of the Affordable Health Care Act which was his “baby” as chair of the SFC. Kerry, however, has said that he supported the President’s “grand bargain” that put Social Security and Medicare under attack. Murray is a friend of the big defense contractors who received $5.2 billion in defense contracts in her home state.

The Republicans

• Sen. John Kyl(AZ),retiring at the end of his term, was a member of the “Gang Of Six” who walked out of the talks and is the minority whip.

• Sen. Rob Portman [OH], a freshman senator, was George W. Bush’s budget director and a member of the original Cat Food Commission .

• Sen. Pat Toomey (PA), backed by the Tea Party and a freshman senator, was the president of Club for Growth and is the only Republican pick to vote against the debt ceiling compromise passed last week.

All three have signed “President” Grover Norquist’s pledged not to raise taxes.

Democrats:

• Rep. Jim Clyburn (SC), was a member of the “Gang of Six” and is a fierce opponent of cuts to Social Security and Medicare.

• Rep. Chris Van Hollen (MD), also a memeber of the “Gang of Six”, is the ranking member on the House Budget Committee and opposed to cuts in the big three social safety nets.

• Rep. Xavier Becerra (CA), has voted consistently to protect Social Security and Medicare.

House Minority Leader Nancy Pelosi has said that they’ll focus on economic growth and job creation, which reduces deficit.

Republicans:

• Rep. Dave Camp (MI), chairman of the Ways and Means Committee, is the head tax-law writer in the chamber.

• Rep. Jeb Hensarling (TX) is one of Boehner’s deputies on the GOP leadership team.

• Rep. Fred Upton (MI) is the only Republican with a moderate record.

All three have again signed the Norquist Pledge.

So there you have it. We are damned no matter what happens on this committee.