Is Hot Bag of Air That Is Grover Norquist Finally Floating Away?

According to a lot of press lately, which was even accompanied by some minor scolding from his own party, it seems as if Grover Norquist might be losing his kung-fu grip on the balls of the republican party when it comes to anything and everything involving his favorite four letter word... tax. But in the harsh light in the post-election morning, GOP politicians are beginning to realize that the napoleonic GOP tax emperor has no clothes. Or more realistically considering the climate and how the Republicans are polling against the President on the so-called fiscal cliff, they realize that threat of Mr. Norquist holding (most of) their previous anti-tax pledges against them in a future primary battle is rather hollow in the face of refusing to let the Bush tax cuts expire against the highest two tax brackets (I am not even going to get hysterically started on how the Bush tax cuts were ALWAYS supposed to sunset after 10 years). The majority of people support the raising of the wealthiest and most will also blame the GOP if a deal gets done. The bet being made many is that it is a lot more dangerous to the electoral prospects of those involved to obey Grover rather than to ignore him.

The party has not put Grover in the corner yet, however. He is now trying to use the debt ceiling to get what he, and many far-right conservatives in the House as well (to be fair), wants on the fiscal cliff. Boehner has now even stated that "everything has a price" as an barely implicit threat to use the debt ceiling despite the fact that it threatens the full faith and credit of the US, led to a downgrade of the US' credit rating last year and 60% of Americans support raising taxes on the top 2% of Americans (oh, and that little 332 and 51% election win by POTUS).

Due to that last bit, and because the majority of Americans will blame the Republican Party for a failure to avert the fiscal cliff, the President is refusing to back down from either his promise to raise taxes on the top 2% OR his conviction to take the debt ceiling off the table for the future so it can no longer be used as a threat nuclear option bargaining chip by the GOP. As President Obama still appears to have a massive chip stack in front of him, it strikes me as the right play. Not only is the raising of taxes on the wealthiest something he ran hard on and won on this fall, but the debt ceiling argument last year cast a black cloud over the United States last year. The President did not get overly blamed on that, but it still caused many to doubt the sanity of the political process. These negotiations during this lame duck session may be an important step to illustrate that this past election was the first sign that sanity is starting to creep back into our Congressional halls.

Here's to hoping, because the world is still watching. Maybe only with one eye because they have their own shit going on over in the EU and China, but watching nonetheless.

IMAGE: Mediaite via Google Images

Time to be Sane Adults on Taxing and Spending

The Congressional Budget Office (CBO), a non-partisan organization that basically does audits and analyses for Congress, recently released a report that stated, in essence, that hard choices on taxing and spending need to be made sooner rather than later to prevent a contraction that could harm the very very very slowly rebounding economy. As reported by USA Today, at the end of this year the "Bush tax cuts" are set to expire after they were extended when the original sunset clause kicked in and $1.2 trillion in spending cuts, agreed to in last summer's debt ceiling negotiations, will be triggered. In our current economic climate, as seen in Europe, such austerity measures could have a significant impact on the country's precarious recovery. The CBO's prescription, which many economists (and this non-economist) agree with is:

Or, if policymakers wanted to minimize the short-run costs of narrowing the deficit very quickly while also minimizing the longer-run costs of allowing large deficits to persist, they could enact a combination of policies: changes in taxes and spending that would widen the deficit in 2013 relative to what would occur under current law but that would reduce deficits later in the decade relative to what would occur if current policies were extended for a prolonged period.

Hopefully our elected officials can act like adults long enough to make something happen for the good of the country. And, not to get too melodramatic, the world considering how interconnected the global economy now is. Let's just say, with this being an election year and all, I'm not exactly holding my breath.


Image: By Carolyn Kaster, AP by way of USA Today.

Time To Take Your Licks, POTUS

A lot of time is spent on this blog snarkily sniping at the GOP; rightfully in MHO, as they continue to come across as an entirely unserious political party ("It is from the Bible that man has learned cruelty, rapine, and murder; for the belief of a cruel God makes a cruel man," says my progenitor). One should not take the disdain for one party as unabashed celebration of the other, however. President Obama, no matter where exactly you ascribe the blame, has failed to live up to the immense promise exhibited during his 2008 triumph. Perhaps part of that blame falls upon his supporters, myself included, who expected far too much of the man and thought far too little of the institutions in place. There is, however, one specific failure that is definitively attributable to the man and his administration and that is the failure to move ahead with pushing the proposals from the Simpson-Bowles Commission. This failure presaged numerous future problems that came up and, I believe, continues to hurt America today.

Although hardly news as it has been harped on brought up repeatedly by Andrew Sullivan and recently by the Republican National Committee in a helpful research briefing, it has yet to gain traction with the larger public. I know we are unofficially in election mode now, but it would be nice, as others have advocated, if the POTUS showed leadership by jumping back into the business of governing by reviving Simpson-Bowles. How effective would the picture he is painting of a do-nothing GOP Congress be if, a month and change after the RNC advocated the move, Simpson-Bowles proposals were shut down or hijacked with unnecessary additions. Or, even better, how excellent would it be if the proposals went through and Obama's spinmeisters got to work highlighting his leadership on the matter?

Regardless, promises were made about how this man was a post-partisan who was about what was good for the country rather than what was good for the campaign for re-election. Though there is no one on the other side who I would consider voting for (outside of Capt. Haughty-pants Huntsmann, who has no shot at being the nominee), it would be nice if President Obama was, well, presidential and completely solidified my faith in my vote. I don't want to be threatened into it again...

*** UPDATE ***
A persuasive, and conservative, argument of why it is imperative to trim our military spending. I could not agree more and can only hope that the cuts are very significant. Much like the belief that taxes should rise to around Clinton era levels, I think our military spending should fall, at the least, to pre-9/11 levels. In the balanced checkbook view of our economy, decreased spending AND increased revenue is the only way to bring down the US deficit.

How to Fail At Legislating by Really, Really Trying

This post may very well get pretty long and quite possibly convoluted, so I request your patience/forgiveness in advance. A probably (definitely) better written piece that takes on similar themes can be found here (it's Rolling Stone, but not Matt Taibbi. So back off). Feel free to jump to the last paragraph of this post for the punch line.

In a surprise to no one, the (Not so) Super Committee on Debt Reduction failed miserably at their mandate and did not even get a proposal together that they could vote on. There are a variety of reasons for this failure but (as some may have guessed) I place the blame squarely at the feet of GOP orthodoxy (religious term usage intended) on taxes. Simply put, Republicans on the Debt Reduction Committee refused to budge on additional revenue to work in tandem with the spending cuts the Dems were offering. Specifically, the GOP was requesting that the Bush tax cuts lasted beyond 2012. Obama has pushed for the continuance of the Bush tax cuts for the middle class before, but the Republicans required that ALL of the tax cuts, including for the wealthiest in this county, are extended as well. Despite the fact that the country can no longer afford them. And despite repeatedly and vociferously preaching debt reduction. The basic argument, as far as there is one, is that taxes upon the wealthy impede growth and the economic growth is really the only way we can pay down our national debt. Classic Trickle-down economics (aka Reaganomics).

There are NUMEROUS problems with this theory, but I'll try to contain myself as much as possible. First and foremost, if this is the case then WHERE THE EFF IS THE MOTHER EFF'N GROWTH YOU GODDAMN MORONS? (Looks like my Caps Lock got stuck. Whoops.). This is not some hot new theory that Paul Ryan, Mitch Daniels and Chris Christie hatched at a slumber party being all GOP young guns and such. As the name suggests, the Bush tax cuts have been around since the presidency of, wait for it... you ready?... I don't know if you are, but here it is... George Walker Bush. Yet the growth hasn't come.  Now, I guess, the plan is to maintain the status quo and hope beyond hope that the spirit of the Gipper makes it all better? These tax cuts have taken billions from our revenue stream and, along with two unfunded wars, helped mightily in bringing the US into the situation we are now in. Despite GOP mythologizing, even President Reagan raised taxes when it was necessary to keep the US economy on an even keel. You do not stand on orthodoxy when the country is reeling; you find solutions that work (such as spending cuts + increased revenues = balance; yes, that would be Personal Finance 101- Your Checkbook).

Additionally, and lastly (thankfully for you), the current talk of tax cuts to the wealthiest and corporations spurring hiring and ACTUAL growth through capital investment, R&D, new products, et al., is just a steamy load of horse manure. As today's NY Times points out, many companies, currently sitting on enormous amounts of cash, are not reinvesting that money in ways that would ACTUALLY help the economy grow. Rather, these companies are artificially approximating growth by instituting share buy backs,which push up the earnings per share. This is accounting legerdemain being used to simulate growth. The truly sad part is that investment in research and development would, eventually, help a company ACTUALLY grow. It just requires taking the long view. And in lies the rub. The short term artificial growth helps executives hit required earnings per share/growth numbers and, thus, get performance based performances attached to those numbers. Likewise, usually top executives making these decisions hold a large amount of stock in the company and can directly benefit from these buy backs. This is, clearly, a potential conflict of interest but courts give a wide amount of latitude in business judgment. Unless there is a clear breach of fiduciary duties, the games continue. All tax cuts would do is grow the pile of money that corporations are sitting on and help those running those companies get richer while paying lower tax rates. Sounds totes fair, right?

So, in other words, shit is eff'n crazy pants to the max. I can only hope that the POTUS sticks by his promises to veto any attempt to roll back the automatic spending cut trigger and a full extension of the Bush tax cuts. It may take some brass ones but, considering our current political environment (those federalists/anti-federalists were lil schoolboys comparatively), this may be the best outcome we could have hoped for.

From the Annals of Common Sense- The Sense Strikes Back...

An article in the New York Times detailed how, despite raucous clamoring from various corners for reduced corporate taxes, 280 of the biggest publicly traded firms paid about half of the official corporate tax rate. In full disclosure, the study is based on a report from the liberal leaning Citizens for Tax Justice but it is still clear that many corporations use any loophole they can find to limit their tax exposure. A money quote from the article:

American corporations are paying a smaller share of taxes than in previous decades. They paid a total of $191 billion in federal income taxes in 2010, the Internal Revenue Service said, representing about 1.3 percent of the nation’s gross domestic product. That is down from about 6 percent during the 1950s (although some of the decline is because a smaller percentage of businesses now file as corporations).

It seems, considering the facts from this article and the GOP reluctance to raise taxes, the easy solution would be to lower the corporate tax rate, say by 10% to a total of 25%, and close the loopholes. Thus, you would not have some corporations paying 10% (or 0%) and some corporations paying 35% (the actual rate) for an average 18.5% corporate tax rate. Instead, everyone pays a lower rate of 25%, which actually brings up revenue by 6.5%. And, as an added bonus, all corporations are treated fairly with none getting screwed for creative accounting. Seems fair, no? And would satisfy both political parties, no? Getting to the meat and potatoes of the matter...

But the Citizens for Tax Justice study found that two-thirds of  the American companies with significant profits overseas actually paid more in taxes to foreign governments than they did in the United States. Rather than lowering the corporate rate more, the study said, the federal government should end the subsidies and shelters that favor companies that game the system. 

“Closing the loopholes will have real benefits, including a fairer tax system, reduced federal budget deficits and more resources to improve our roads, bridges and school — things that are really important for economic development here in the United States," the report said.

Worrrdddd. Again, I do not understand why this is even an argument. You cut taxes (and give Grover Norquist a boner) while raising revenues. What's not to love? Yo, POTUS... I'm ready to head the Council of Economic Advisers. Or you can slap me into that supposed Super Committee. Whenever you're ready. Just for the record, I play ball (in terrible shape, but decent court vision... classic PG) and recently gave up cigarettes (and we can cheat together. I'll never tell. I'm like a lock box). We can do this sir. YES WE CAN!

(Image from rally requesting NoMas Paine for C.E.A. Or a random Google Images pic. None of us have any way of knowing...)

From the Annals of Common Sense...

Bi-partisan fiscal policy experts (two Democrats and two Republicans) testified in Congress in from of the so-called Super Committee on Tuesday and dropped the common sense hammer.

Bi-partisan agreement on a plan that raises $1 in additional revenue for every $3 in spending it cuts (for a total deficit reduction of 4 trillion dollars)... kinda just makes sense, no?

Hopefully the panel itself will come to its senses. This country was built on compromise and this is as good a  time as any to revisit that tradition.

Surprise, Surprise... The Joint Deficit Reduction Committee Ain't That Super

The (self-proclaimed) non-partisan Center on Budget and Policy Priorities (it's level of partisanship has been debated), released a study the other day on the proposals presented by the democratic and republican members of the Joint Select Committee on Deficit Reduction that was put together in the crisis averting, debt ceiling raising deal this past August. Not all that surprisingly, the republicans on the committee still stick to the formula that it is all about spending cuts, with no additional revenue. Y'know, the Jack and the Beanstalk economic plan... plant the magic beans, wait for growth and then get your golden eggs (and much like Jack and the Beanstalk, it's a goddamn fairy tale). They also go rogue on the baseline for their estimates bu assuming that the Bush tax cuts continue (y'know those tax cuts that have been around for almost a decade but have yet to lead to one iota of economic growth) while every other estimate supposes that they expire. This is in clear contrast to Senator Max Baucus' plan, which proposes some revenue increases but that also requires significant spending cuts; including deep cuts to Medicare and Medicaid. Of course, that plan was quickly rejected by the republican members of the "Super Committee."

If the POTUS cannot take advantage of republican intransigence and differentiate between the fairy tales offered by the GOP with the compromise offered by the democrats, I don't know what to say. I guess that would prove, once and for all, that BOTH parties are completely incompetent.

EDITORS NOTE: I use y'know faarrrr too much. Don't worry, I'm working on it. Just so y'know.