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Thu Feb 21, 2013, 05:54 PM

How Obama moved the tax debate to the right - Ezra Klein

Last edited Fri Feb 22, 2013, 03:33 PM - Edit history (1)

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/21/how-obama-moved-the-tax-debate-to-the-right/?hpid=z1

If the 2012 election was fought over any one issue, it was tax revenues. Mitt Romney thought tax rates were fine where they were. President Obama thought they needed to go considerably higher.

Obama won that election and with it, many thought, the argument over taxes. But a few short months later, the “center” on taxes appears to have shifted to the right — even as compared with the months after Republicans won the 2010 midterm elections. And the blame for that may lie as much with Democrats as Republicans.

The initial budget plan released in December 2010 by former Republican senator Alan Simpson and former Democratic White House chief of staff Erskine Bowles, if passed today, would raise taxes by more than $2.6 trillion over the next 10 years. The new Simpson-Bowles proposal, released earlier this week, would raise taxes by barely half that.

Simpson-Bowles isn’t alone in sharply reducing its tax ask. The bipartisan debt commission chaired by former OMB director Alice Rivlin and former Republican senator Pete Domenici released its first report in November 2010. It called for more than $3.5 trillion in revenues over the next decade — some of which would’ve been raised through a value-added tax. But the post-election update of their report called for only $1.5 trillion in revenues, and it scrapped the value-added tax.

Obama ran for reelection with a budget calling for $1.7 trillion in tax increases and a promise that he’d oppose anything that didn’t raise tax rates on families making more than $250,000. In the end, the fiscal-cliff deal raised a bit more than $600 billion in revenues and raised tax rates only on families making $450,000 or more. Today, White House officials say they’d be willing to settle for $1.2 trillion in total revenues.



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...Now check out the ..

New York Times article on the Grand Bargain 'blow-up'

Here is an excerpt from the New York Times article about the Debt negotiations between Obama and Boehner to achieve a "Grand Bargain".   It points out that after Obama and Boehner had verbally agreed to a deal which included some tax increases, the Gang of Six Democrats and Republicans had issued their proposed deal which included MORE revenue increases than the eager to please Obama had agreed to with Boehner (note this deal never was approved by the Republican caucus).   At first glance it appeared that the Gang of Six deal (endorsed by more than 20 Republican Senators) included 50% more tax increases than the Obama- Boehner agreement.  But on closer examination, when you put the two deals on the same "base-line", in actuality the "Gang of Six" deal included MORE THAN TWICE as much revenue increases ($2 Trillion) as Obama had agreed to with Boehner.

Obama vs. Boehner: Who Killed the Debt Deal?
(emphases my own)
http://www.nytimes.com/2012/04/01/magazine/obama-vs-boehner-who-killed-the-debt-deal.html?pagewanted=all#5

Enter the Gang of Six

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Word quickly traveled down Pennsylvania Avenue to the White House, where Nabors, who was still honing a response to Boehner’s offer from Sunday night, called Barry Jackson in the speaker’s office and asked what was going on. Jackson wasn’t sure. Within a few hours, though, the White House had the sense that something important had shifted. More than 20 Republican senators, by some counts, had stood up in favor of a plan (the one agreed to by the 'gang of six'_Bill USA) that would raise more revenue, and Obama thought he now had an opportunity to exert more pressure on House Republicans by highlighting the widening split inside their own party. Shortly after noon, Obama took the unusual step of marching out to the briefing room to declare his support for the Gang of Six, instantly elevating what was supposed to have been an informal, sparsely attended briefing into the day’s national news. It was, in retrospect, a costly miscalculation.

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If it was never going to be easy for the White House to sell the grand bargain to Democrats on the Hill, then the plan put forward by the Gang of Six was likely to make it impossible. On the surface, the gang had proposed an overall revenue increase of $1.2 trillion, 50 percent more than the $800 billion Obama and Boehner were talking about. Democrats were bound to ask why the president had settled for less in taxes than the Gang of Six did.

But once Obama’s aides looked more closely at the numbers, they understood that the political problem posed by the gang’s plan was actually far worse. ]  This is where the whole distinction between base lines — “current law” and “current policy” — comes in again. ] The gang had settled on a base line that was somewhere between “current law” and “current policy”; it had assumed the Bush tax cuts for the most affluent were expiring, while the other tax cuts would persist. ]  The White House, meanwhile, had been calculating their figures based on “current policy,” under which all the tax cuts would remain in place. This meant that when you actually compared the two plans in an apples-to-apples way, the Gang of Six was proposing to raise revenue by about $2 trillion — $1.2 trillion more than the president and the speaker had tentatively agreed to.

How could Obama possibly ask Democratic leaders to pass a deal with $800 billion in new revenue, when a bunch of Republican senators — not to mention the president himself, on national TV — had just stood up to applaud a plan with $2 trillion attached?   Never mind that the Gang of Six plan was little more than a memo, with no chance of becoming an actual bill — let alone passing the House or Senate. ]  Liberals would laugh the president out of the room. The numbers would confirm the suspicion, already voiced by some lawmakers privately, that Obama wanted a bipartisan victory too badly and would accept a deal on any terms, even if it sold out his party’s principles.
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Reply How Obama moved the tax debate to the right - Ezra Klein (Original post)
Bill USA Feb 2013 OP
xchrom Feb 2013 #1
Bill USA Feb 2013 #2
xchrom Feb 2013 #3
daybranch Feb 2013 #4
Doctor_J Feb 2013 #5

Response to Bill USA (Original post)

Thu Feb 21, 2013, 06:11 PM

1. Lots of twists and turns. Nt

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Response to xchrom (Reply #1)

Thu Feb 21, 2013, 06:14 PM

2. Yes, this was hard to follow. The 'baseline' variation also didn't help. I don't think but a very

few people knew what was going on, at the time.

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Response to Bill USA (Reply #2)

Thu Feb 21, 2013, 06:33 PM

3. The story of how the Party has morphed away from FDR

As a foundation.

It's really all very interesting.

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Response to Bill USA (Original post)

Thu Feb 21, 2013, 11:01 PM

4. progressives

we progressives continue to hope Obama makes no deals to change anything in the near future. Let the sequester come and then ask the people what they want. This choking of thre life from the people often aided by Obama desire to make a dealwill only cease when the people demand it much more loudly and hopefully not necessarily more violently. Obama needs to learn he cannot just accept whats behind doorr number 1, or door number 2, or door number 3 and call any a victory. Obama is a centrist. Unless he abandons those actions based on compelling action by progressives and the public, he will certainly not move the country forward.We progressives must keep pushing. Solidarity.

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Response to Bill USA (Original post)

Fri Feb 22, 2013, 09:00 AM

5. He was voted into office (twice) to get unthinking partisans on board with

many right wing initiatives. Note the support at DU for drone murder, public school destruction, SS and Medicare benefit cuts, Heritage Care, Bush/Obama tax cut extensions for the hyper-rich, and some others.

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