In a column reminiscent of his work urging President Obama to push for a larger stimulus package four years ago, New York Times columnist Paul Krugman today warned that Republicans are trying to sneak in “plutocrat-friendly” policies as a Trojan horse during the debate over the soon-to-expire Bush tax cuts, entitlement reform and the “fiscal cliff.”Savings on entitlements, Krugman writes, hit lower- and middle-income Americans harder. Raising the retirement age or the age for Medicare eligibility, he writes, “would be a hugely regressive policy change,” because “the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer?”And on the question of limiting deductions while leaving the Bush rates in effect, he writes:Continue Reading… … Read More
Dems: The ball in the GOP’s court on Medicare cuts
In order for the talks over the “fiscal cliff” to move forward, Democrats say Republicans must propose their own plan for Medicare cuts and other cuts to entitlement programs.The Democrats took a hard line last night, after top Republicans rejected President Obama’s first offer to resolve the “fiscal cliff” on the grounds that it did not address spending cuts seriously enough. From the New York Times, the plan mostly included ways to raise revenues, with the additional promise that $400 billion in entitlement savings could possibly be negotiated next year:Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal on Thursday to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, $50 billion in immediate stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits. The proposal, loaded with Democratic priorities and short on detailed spending cuts, met strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced the goal of finding $400 billion in savings from Medicare and other social programs to be worked out next year, with no guarantees. Continue Reading… … Read More
Living Social group deal company cuts 400 jobs
Online deals firm Living Social said Thursday it was cutting 400 jobs, or 10 percent of its staff, in a retrenchment which follows big losses for the company. Company spokesman Andrew Weinstein said in an email that most of the jobs were US-based by that “a couple dozen” positions were…
Is John Boehner Dumb Enough to Take $400 Billion in Cuts a Decade From Now in Exchange for $1.2 Trillion in Tax Hikes That Start ASAP?
Is Speaker of the House John
Boehner (R-Ohio) really so dumb – or unprincipled – that he will
buy into a plan that raises $1.2 trillion in tax revenue starting
next year in exchange for $400 billion in entitlement cuts between
2023 and 2033?
That’s
what Politico is reporting:
Taxes will go up just shy of $1.2 trillion — the middle ground
of what President Barack Obama wants and what Republicans say they
could stomach. ;Entitlement ;programs,
mainly Medicare, will be cut by no less than $400 billion — and
perhaps a lot more, to get Republicans to swallow those tax hikes.
There will be at least $1.2 trillion in spending cuts and “war
savings.” And any final deal will come not by a group effort but in
a private deal between two men: Obama and House Speaker John
Boehner (R-Ohio). The two men had a 30-minute phone conversation
Wednesday night ; — but the private lines of communications
remain very much open.
Jim VandeHei and Mike Allen write that Obama will show “zero
flexibility on his insistence on a higher tax rate for top earners”
and that Boehner and Republicans, worried that the GOP will
shoulder blame for any economic slowdown associated with going over
the fiscal cliff, will acquiesce if they can pretend they fought to
keep taxes low and succeeded in getting “specific cuts to
entitlement spending.” Because Paul Ryan’s Medicare reforms didn’t
start (barely) reducing outlays for a decade, VandeHei and Allen
say that both Democratic and Republicans will ultimately push off
spending cuts until sometime “between 10 and 20 years from
now.”
This sort of negotiation is
appalling but has the ring of truth to it. Recall that Boehner is
in no way a small-government enthusiast – indeed, he’s voted for
just about every big-ticket item you can name in the past dozen
years, from No Child Left Behind to invading Iraq to Medicare Part
D to Bush’s 2008 stimulus to TARP. And recall, too, that mere weeks
before the 2010 elections, when the Tea Party was at its height, he
released a “Pledge to America” that promised to cut a measly $100
billion in spending (which, as Peter Suderman noted at the time,
was actually more like
$50 billion) out of a budget north of $3.5 trillion. On top of
that, when asked by NBC
News in January 2011 to name a single program “we could do
without,” Boehner replied, “I don’t think I have one off the top of
my head.”
Whether Boehner can sell such a deal to House Republicans is
another matter (the Washington Examiner’s Conn Carroll flatly says
there is “no way” the GOP members will sign on to such a
deal).
This is as good a time as any
to remind people that we have such high and growing levels of debt
is because Republicans and Democrats alike have jacked up spending
like nobody’s business. Look upon the chart of federal outlays per
capita and despair. Going back to Jimmy Carter, there’s a clear
pattern: Republican presidents ratchet up spending and Democratic
presidents consolidate the increases. This reality is at almost
complete odds with political rhetoric, in which Republicans
masquerade as spending hawks and Democrats talk about increasing
outlays for the wretched of the nation. Perhaps the near-total
disconnect between rhetoric and reality is the reason why we can’t
get anywhere – taxpayers are constantly being misdirected by the
powers that be.
Here’s another point worth underscoring: High levels of public
spending and debt retard the economic growth that increases living
standards. The case against endless public spending and the debt it
inevitably creates isn’t an abstract argument about paying your way
or being moral or anything like that. There’s a crushingly
strong ;empirical
case ;that public spending crowds out private investment
and that “debt overhang” reduces growth.
As I noted earlier today, Barack Obama never misses an
opportunity to say that he favors a “balanced approach” to getting
the government’s finances in order. He’s on the record saying that
he’s willing to cut $2.50 in government spending for every $1
increase in tax revenue. And now John Boehner – the head of the
opposition party, fer chrissakes! – is ready to jump on a deal that
nets $1 dollar of spending cuts for $3 in revenue (never mind that
the tax hikes start now and the spending cuts 10 years down the
road).
No wonder we’re screwed. No wonder at all.
False Balance in the Fiscal Cliff Deal: Real Tax Hikes, Fake Spending Cuts
Neither Democrats nor Republicans are providing
much in the way of details about the fiscal cliff negotiations, at
least not on the record. But Politico
reports a few details about what kind of deal we might be able
to expect: Taxes will rise by $1.2 trillion or a little less. At
the same time, “there will be at least $1.2 trillion in spending
cuts and ‘war savings.’” Presumably the idea will be for the
spending cuts and tax hikes to appear to balance each other out.
But it’s only an appearance.
That’s because claiming that so-called “war savings” are a
spending cut is Washington’s
favorite budget gimmick. ;Doing so would allow legislators
to take credit for savings that are already going to happen.
Counting war savings would mean that almost no real cuts are
necessary: The Congressional Budget Office has scored it earlier
this year as “saving” about $850 billion. That’s money that was
never going to be spent, but gets counted as a “cut”
anyway. ;
Finally, Politico reports that some sort of entitlement
cuts may be part of the deal as well. What kind? Who knows?
Republicans won’t say what they want. And Democrats won’t make an
offer of their own. Nor are they likely to show up any time soon.
The report also suggests that the cuts could end up totaling about
$400 billion, or perhaps more, at least eventually. “Democrats want
most Medicare and other entitlement savings to kick in between 10
and 20 years from now,” the story says. Which, given the
congressional history of delay and avoidance on long-planned
Medicare cuts, may as well be never. ;
So if Politico’s report is right, that’s where things
stand: Real tax hikes, fake spending cuts, and a half-hearted
gesture toward Medicare cuts a decade from now. If that’s the deal,
it’s not much of one. ;
LivingSocial Lays Off 400 As Daily Deals Lag
IDK.
Bet you thought the next big story in the ailing daily deals business was going to be Andrew Mason’s ouster. And yet, it’s a competitor making headlines: Bloomberg News reports that LivingSocial has laid off 400 of its 4,500 employees. That’s about 9 percent of its staff, for those keeping score at home.
Hardest hit were the customer service, sales and editorial departments, spokesperson Andrew Weinstein told CNNMoney, and cuts were concentrated in the U.S. Washington, D.C. lost 160 jobs, because customer service ops are being moved to, ugh, Tucson. Mr. Weinstein explained that the cuts ”will free up additional resources for the company to invest in some of the critical things in our business, like mobile efforts.”
Just last month, Amazon reported that it had lost $169 million of a $175 million investment in the company. The wrath of Bezos is not to be trifled with.
Suddenly, Mr. Mason’s week looks a lot better. … Read More
Liberals double down: No entitlement cuts
In a story already making waves across Washington, Politico’s Jim VandeHei and Mike Allen reported this morning that a bipartisan “grand bargain” is emerging from talks between the White House and Republicans. The counters of the deal are this: About $1.2 trillion in new tax revenue, mostly likely from an rate increase on income over $250,000, along with at least $400 billion over ten years in entitlement cuts “and perhaps a lot more,” mostly from Medicare.Liberals have drawn a hardline against entitlement cuts and $400 billion is a lot money, so some progressives are not pleased with the idea.Democratic Rep. Keith Ellison, the chairman of the 77 member-strong Progressive Caucus, told Salon that his members would not support entitlement cuts. “Any agreement to meet our end-of-the-year deadlines will need a large portion of the House Democratic Caucus to pass. Progressives will not support any deal that cuts benefits for families and seniors who rely on Medicare, Medicaid and Social Security to put food on the table or cover their health costs,” he said in a statement.Continue Reading… … Read More
