I don't believe the Bush Tax cuts are going away

[nadinbrzezinski]

I don't believe the WH will get them to lapse. They, do not have the power to do it. They proved this over the debacle.

This is what this is about...

Any of you believe they will go away?

This is what the downgrade is about... it is about our inability to raise those revenues.

The ACTUAL ability to pay the debt is very secondary to all of this. They no longer see us as a stable country with a stable, and PREDICTABLE, political system.

I realize that even clear thinking people, such as Krugman and Reich are missing this by a mile, perhaps because it has NEVER happened to the US... but this is what this about.

So any of you believe that the tax cuts will lapse?

[thewiseguy]

1. It partly also has to do with the debt/GDP ratio

It surpassed the 100% mark this week. There are few other countries in that list and I do not think any of them have a AAA credit rating!

[nadinbrzezinski]

4. Yep it is partly due to that as well

but also our inability to raise those revenues necessary to also service that debt. And the inability is religious in flavor.

[lonestarnot]

2. They didn't go away last time, why would we think they go away in the future?

[nadinbrzezinski]

3. And that is what they said

in their statement...

[lonestarnot]

10. I don't care what they said.

[nadinbrzezinski]

13. You may not, but they just told you

that the US is no longer a stable, predictable country.

That is the translation.

They just told you what I have been singing for a while. Me saying it, to some is a fantasy... them saying it is consequential. And I doubt they read any of our rants on DU.

Regardless it is not good. It is not bad, but it is not good. (only one US based agency is a MESSAGE to DC)

[lonestarnot]

17. Maybe Mr. President will notice. He should care. I do not.

[nadinbrzezinski]

19. From their statement

More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
time soon.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

And I suggest if you do not care, just hide the threads. This is one of those HISTORIC moments...

My view, continued trend line to end of empire. This is what it looks like. You could almost write a script on it. Yes they are that predictable.

[Coyote_Bandit]

5. Those Bush tax cuts

and whether or not they are allowed to lapse would not be as important if we were creating tax revenues through job creation. But we aren't. And it appears that our dear leaders have little intention of doing anything to encourage that.

[nadinbrzezinski]

9. That is another part of the statement

by the way. But a major part was the inability of the system to do this. In a rational system you would not have had this circus and taxes would have lapsed already.

[alfredo]

15. I say fuck the rich, make them fear us.

[gateley]

23. Tempting, for sure, but how would you suggest we accomplish this? nt

[alfredo]

48. Expose their treachery.

We also need to find out if the decision makers at the S&P have moved their money into investments that will profit from a downgrade.

[gateley]

64. Wow - This is great! I want one - are you selling them?

[alfredo]

65. No, they are a Moveon creation.

I have been writing that on my dollar bills.

[gateley]

68. Thanks - I will, too! I've sent this to everyone I know --

I'm tempted to get a stamp made.

[alfredo]

70. Do it. Stamps are free.

[alfredo]

71. Oops! Stamps are cheap, not free.

[OhioChick]

6. No way in hell are those taxing lapsing....

They'll cut SS/Medicare/Medicaid and every other social program before those precious taxes are touched.

[PSPS]

7. They certainly won't with Obama at the helm

I think it's fair to now call them the Bush/Obama tax cuts for the rich.

Look, Obama is a supply sider. He has stated publicly that Saint Ronnie is his "most admired president." All of his protestations about increasing taxes on the rich are mere theater to placate liberals, whom he once relied on as his "base" -- not unlike the routine RW "promise" to "outlaw abortion" without really intending to do so.

[kentuck]

8. I think you might be on to something there, nadin....

That was the main negotiating point in the recent debt limit talks.

[nadinbrzezinski]

11. And it is in the S&P press release.

[SidDithers]

12. Bookmarking...nt

Sid

[nadinbrzezinski]

16. From the statement

More broadly, the downgrade reflects our view that the effectiveness,
stability, and predictability of American policymaking and political
institutions have weakened at a time of ongoing fiscal and economic
challenges to a degree more than we envisioned when we assigned a
negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the
gulf between the political parties over fiscal policy, which makes us
pessimistic about the capacity of Congress and the Administration to be
able to leverage their agreement this week into a broader fiscal
consolidation plan that stabilizes the government's debt dynamics any
time soon.

http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316529563

IT IS black and white...

But whatever sid...

[alfredo]

14. He's going to use it as a wedge issue against the Reps.

Fighting the lapse of the tax cuts would be the worst thing the Reps would do. It will cut their 2012 candidates off at the knees.

[lonestarnot]

18. Count on it!

:evilgrin:

[alfredo]

47. Remember to write this on dollar bills

Class warfare is a noble cause. Fight back!

[former9thward]

73. You forgot the 2010 election very quickly.

All of the GOP candidates were against the lapse of the tax cuts. It didn't hurt them a bit.

[alfredo]

76. It was a mid term election in a bad economy. The cards

were stacked against us. But now I think the public understands the ramifications of bush's tax giveaway. If the GOP fights the sunsetting it will hurt them at the polls.

[Harmony Blue]

20. I am inclined to agree

S&P, and other rating agencies have been clear, that a balanced approach of cutting spending, and tax increases were a must for the U.S. to maintain a Triple A rating.

[hfojvt]

21. it kinda depends on how well we do in 2012

The other part is - how much of them will lapse? Obama sorta ran on only reversing about 20% of them, leaving in place large tax cuts for the wealthy. They really need to be eliminated for the top 40%, not just the top 2%.

[nadinbrzezinski]

22. I do not believe we have time

this is one of those hair on fire moments, serious.

[AndyTiedye]

27. It Will Be All or Nothing. The House Republicans Will Not Allow any Middle-Class-Only Tax Cut

So we would be hitting the economy with a big, broad-based tax hike, right along with huge spending cuts everywhere.

In an election year.

This will not go well.

[hfojvt]

31. they don't expire until after the election

but really, if Republicans vote against them before the election, then it can be used against them in the election. Trouble is that House Republicans will not vote against it, they will vote for all of them to be extended, and they have enough votes to pass it. Then Democrats probably cannot vote against that either. So the extension might very well pass the House and then be tied up in the Senate, unless the President works out another odious deal. But why not put that off until after the election?

[JoePhilly]

51. Reid doesn't have to even bring such a bill to the floor.

Let's imagine the House passes an extension of all of the cuts.

Reid can ignore it. He doesn't have to bring anything to the floor.

In December of 2012, win or lose, Obama can let them all expire if it comes to that.

And he suffers no political fall out because he can't run again anyway.

He'd rather extend those for people making under 250k if possible.

[alsame]

40. I heard Ezra Klein talk about this and he said the WH has little

enthusiasm for letting the tax cuts expire precisely for this reason.

[JoePhilly]

52. That makes zero sense.

The tax cuts are set to expire AFTER the next election.

Which means win or lose, Obama can let them all expire if it comes to that. He can't run again. So the media can't hold it over his head in the second term.

The GOP can't really force anything in this situation.

[Major Hogwash]

57. Why would he say something totally opposite of what Obama has said all along about them?

I don't think that even computes.
Rejected.
Bad data.

[alsame]

59. Shoot the messenger, huh? Here's what he wrote and I heard

him say something similar on TV. Don't like it? - take it up with Ezra.


Democrats will have exactly one chance to overcome the GOP’s resistance to tax revenue. Next year, the Bush tax cuts expire. If Congress does nothing, we revert to Clinton-era tax rates for everyone, and the federal coffers fill with $3.6 trillion in additional revenue over the next 10 years — enough to stabilize deficits. This is a rare opportunity in which it’s Democrats who hold the hostage and Republicans who have to compromise.

Tell this to the folks at the White House, and they’ll say that this is like pointing a gun at their own head and threatening to pull the trigger. Raising taxes on anyone but the rich is unpopular, and a large tax increase is not what the economy needs right now. They’re right on both counts. But in this case, two rights make a wrong.

http://www.washingtonpost.com/business/economy/one-shot-on-taxes-dont-blow-it-democrats/2011/08/02/gIQAEMOhqI_story_1.html

[Major Hogwash]

61. Where's the "little enthusiasm" comment in your quote?

Because Obama already said he won't renew the Bush tax cuts.

:rofl:

[alsame]

62. Did you read carefully? I said I heard him

say something similar on TV, not a verbatim quote from the article. Jeez.

[gateley]

24. On the OFF chance that the CBO or other such respected entity

convinces the Super Duper Counsel that that would go a LONG way in addressing the debt, we might have a chance.

[nadinbrzezinski]

25. The weekend is critical

to be honest.

[tblue]

26. Never before has a party actively worked to harm our economy.

We are in uncharted territory, folks, at least in this country.

[nadinbrzezinski]

30. I've said it before, we have been here before

as to one party being this damaging. The calendar read 1859...

But people laugh when I say that,

[TheKentuckian]

28. I think people will morph into wanting to restore Bush levels

If the "dialog"even goes on that long.

[obxhead]

29. Not a chance in hell.

They'll be extended again with another promise from Republicans to work in a bipartisan manner on the next debt ceiling increase.

[no_hypocrisy]

32. When they were enacted, I never believed they were meant to be "temporary".

[Horse with no Name]

72. Nope. And the fact that they failed to produce jobs then...and have failed to produce jobs now

while the corporations are sitting on trillions of dollars (of OUR money) and NO plans of creating jobs and reinvesting it...we've been swindled.

[_ed_]

33. The Bush tax cuts are here to stay

Obama has been in office since 2008, and had the Congress until 2010. He doesn't want them to go away.

[Obamanaut]

34. But the President promised. Again. nt

[phleshdef]

35. There is more than enough political capital now to let them ALL lapse, middle class cuts too.

The Bush tax cuts have became toxic in every way. The public is warming up to the notion of higher taxes. No amount of "power" is needed by anyone. All they need to do is let them lapse. There are no more hostages for the Republicans to shoot really. After you've made all the cuts you can get away with, there is still a lot of debt left over. At some point, tax increases have to happen and that will be the point where there is no other choice. We are getting to that point.

[QC]

36. Of course they're not. Those tax cuts are not going anywhere,

because the president will fold as soon as the Republicans challenge him, as always.

[kentuck]

37. And that would spell the defeat of Barack Obama....

...and the end of the Democratic Party as we have known it. Without taxes, there is no reason for a Democratic Party to exist.

[KharmaTrain]

38. Obama Has Long Said He Wanted Them Permanent...

...for those earning under $250k a year. If the boooosh cuts were to expire rates would rise for all and part of Obama's '08 campaign plank was to make the cuts permanent for the low income earners but let them expire on the top 5% or those earning more than $250g a year (at one time I was hearing 200g and some had even proposed 150g).

Whatever the case...next year's election will be about keeping those tax breaks. If the rushpublicans win the Senate and hold the House, expect those cuts to become permanent with more cuts being pushed. They won't be satisfied until they pay nothing....and then bitch about how the working class is still getting too much.

[kentuck]

39. He is searching for more taxcuts even as we speak...

He wants to extend the FICA cuts to put more money in the pockets of working people. However, what he doesn't tell you is that it also takes money out of the SS fund and increases the deficit. Dumb! Dumb! Dumb!

[KharmaTrain]

41. I'm Mixed On FICA...

I agree with you that those cuts hurt SS and that most people don't realize it. I definitely don't favor it for large corporations that are pocketing that money. However, I do like the idea of some kind of FICA waiver for a first-time hire for a small business (under 1,000 employees) for up to a year to spur job creation. I'd also favor the government making up the shortfall through reimbursement from funds currently being used for corporate welfare...but I like to dream too much.


Sadly this administration has walked into a financial corner with few options that have any positive effect. As you say...Dumb! Dumb! Dumb! and downright frustration. Unfortunately that's what people voted for last November...

[JoePhilly]

44. Next years election won't be able the Bush tax cuts.

The tax cuts expire on 12/31/2012.

Win or Lose, Obama will still be the President on that date.

And since he can't run for President again, he can let those tax cuts expire ... all of them ... and it doesn't hurt him politically.

The GOP Presidential can't claim that he will extend those cuts if he wins because his winning is irrelevant to the topic. The best the GOP candidate can say is that he'd sign legislation to re-instate them, after the fact. Not nearly as powerful.

Obama can claim they he is willing to sign a new tax cut for the middle class, but not one for the rich.

In Dec 2010, Obama had no leverage, if he let those middle class tax cuts expire, he'd have been crucified. In the media and on DU. And that would have been the debate in 2012 ... how evil Obama hurt the middle class. And how a new GOP President would "fix it" ... that can't happen now.

[Major Hogwash]

58. Actually, they are 2 different tax cuts that were approved at 2 different times.

So, the middle class tax cuts are not in jeopardy, but the Bush tax cuts will not be renewed.

Obama has said that repeatedly.
It depends on what his answer is in Final Jeopardy AFTER the 2012 elections.
That's where the payoff to all of this wrangling comes down.

Obama is a genius and anyone that is second-guessing him now has no idea how smart he really is. He's able to compartmentalize all of those problems and see the connections between all of them.

[WingDinger]

42. Absofrigginlutely, the bush taxz cuts will end. BUTTTTTTTTTTTT

the relacement will be an opaque reform. They are now talking about reducing the marginal rates, and eliminating loopholes etc. It will be all subject to interpretation.

[IndictW]

43. The world knows where the crime started.

Most of the world is suffering from a financial crisis started by an idiot from Texas. When will they turn their gaze his way?

[Blasphemer]

45. They won't, The GOP will not allow middle class cuts to be separated from cuts to the wealthy

The GOP won't budge and they will likely control both houses of Congress. Obama will make it appear to be a tradeoff for something else but once the GOP holds Congress, letting those cuts expire will be DOA.

[JoePhilly]

46. They absolutely can and will go away.

Those cuts are set to expire on 12/31/2012.

No matter what happens during the Presidential election, Obama will still be President on 12/31/2012.

The only way the GOP can extend them is if the House and Senate pass legislation to extend them, and then Obama has to sign it, and that's not going to happen.

The House will probably try to pass a bill to that effect. But the Senate won't even take it up. Or if they do, they'll strip out the cuts for the rich, keep those for the middle class, and send it back to the House. Regardless, a full extension does not come to the floor in the Senate, unless Harry Reid has the votes to kill it. As we've already seen, the House can pass whatever it wants, and Harry can ignore it.

Back in 2010, Obama couldn't let all of the Bush tax cuts expire because he'd also promised to not raise taxes on those making under 250k. Letting all the tax cuts expire would have broken that larger promise. The media would have called it his "read my lips" moment, and DU would have crucified him for raising taxes on the middle class during a weak recovery, just when the middle class needed that money the most just to survive. That would be all we'd hear from then until the 2012 election.

During the 2012 election campaign, Obama can say that he'd sign an extension of the middle class tax cuts, but not one for the rich. The best the GOP Presidential candidate can say is that they would be willing to re-instate the Bush tax cuts if Obama let's them expire, which is a weak argument, because Obama can make the same claim with regard to the middle class tax cuts.

Finally, win or lose in 2012, Obama will have zero political fallout for letting all of the Bush tax cuts expire if it comes to that. Sure, the media can bitch and moan if Obama does let them all expire, but because Obama can't run for re-election, he doesn't have to worry about that.

He can let them all expire, and then call on Congress to send him a bill that cuts taxes only for the middle class ... and he can put the GOP on the defensive side by pointing out that they are suddenly against tax cuts for the middle class.

Bottom line: Obama has the leverage this time around. Either they all go away, or only those middle class get extended.

Oh ... and the S&P is pretty clear about the down grade. They state that they can see that the GOP is not serious about debt reduction because they won't even consider revenues. And from the S&P's perspective, the only way to be serious about debt reduction, is to include revenues. Democrats need to get very vocal about this fact.

[SidDithers]

49. Good post...nt

Sid

[Buns_of_Fire]

50. Grover the Gnome won't allow Shit-fer-Brains' Tax Cuts to expire.

And what Grover the Gnome wants, Grover the Gnome gets. The "temporary" FICA Tax Holiday isn't going anywhere, either. I wouldn't be surprised in the least if an additional, matching "Tax Holiday" isn't enacted for the employer's portion (so that they'll have more money to "create jobs":eyes:).

No, I have no empirical evidence to back up my assertions. Just the principle that "the past is prologue."

I sure hope I'm proven wrong.

[ProgressiveEconomist]

53. TAX CUTS in the amount of Bush's '01 and '03 are not going away. But I see this as

a great OPPORTUNITY.

Tax cuts are Republicans' ACHILLES HEEL.

On Bill Hahr's show this weekend, Joan Walsh remarked about how Bill Clinton almost completely replaced federal weilfare welfare for poor kids with a refundable tax credit that "pahses out" steeply with income, the EITC (Earned income tax credit). This was a BRILLIANT move by Clinton. Any attempt by Republicans to get rid of it would be attacked vehemently as a TAX INCREASE on the most vulnerable Americans. Such a response occurred on the Senate floor this very week, when Orren Hatch took the floor to demand that the poor pay more taxes~

Most people have ho idea the EITC has been in the tax code and has been expanded for fifteen years. Of course, it's no use to the UNEMPLOYED poor, but it still is available to 70 or 80 percent of them.

In a still-open GD thread last week (see http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1636415&mesg_id=1665146
), I proposed several ways the idiotic Bush income tax cuts could be REPLACED by other tax breaks focused on JOB CREATION. For example, a REFUNDABLE PER CHILD TAX CREDIT with a steep phaseout schedule would help the unemployed poor as well as the employed poor.

The Bush tax cuts are set to expire anyway. As long as Obama is re-elected next uear and Democrats continue to control at least 34 Senate seats, President Obama can VETO any attempt to renew them again. IMO, this is an opportunity for TRILLIONS in economic stimulus. cloaded as "tax cuts" just like the EITC.

[blindpig]

54. It is not a lack of power, it is a lack of will. and it ain't going away.

eom

[Safetykitten]

55. They are not going anywhere. They are here to stay.

[WinkyDink]

56. The Republican elected President in 2012 will definitely not allow expiration.

Read that any way you want.

[ProgressiveEconomist]

60. But if Obama is reelected and Democrats continue to contro at least 34 Senate seats, a VETO

a VETO threat for any attempted renewal of the idiotic Bush income tax cuts tilted toward the wealthy remains powerful. See post #53 above.

[Major Hogwash]

63. Even if Obama is not re-elected, the Bush Tax Cuts expire November 2012.

And since Reid is the leader of the Senate clear until January of 2013, the Bush Tax Cuts are dead.

As of last December.

[ProgressiveEconomist]

67. Technically, yes. But triumphant Rs would resuscitate them, or come up with something

even WORSE.

A reelected Obama, however, could VETO any R bills to renew or resuscitate them as long as Democrats continue to control at least 34 Senate seats.

IMO this permits at least PROPOSING for campaign purposes a package of replacement tax breaks focused on job creation. The CBO has scored income tax cuts as having the absolute WORST "bang for the buck" on job creation and job growth of a list of possible fiscal policies. See the link in post #53 above.

[Major Hogwash]

69. We could stamp "DNR" on the Bush Tax Cuts.

But the Republicans would try to erase it to cut them anyway.

"No matter how much money the rich make, don't tax them" is the new motto of the GOP.
That's a catastrophe looking for a place to happen.

[WinkyDink]

75. Call me! ;-)

[paulk]

66. they aren't going away and the tax breaks for the rich

will be another hostage situation...

Remember - 85% of those tax cuts are going to people making less than $250k a year ($250k being the level defined by Obama himself as the dividing line between rich and middle class). those tax cuts for the middle class were originally a Democratic initiative, and the Democratic Party will certainly fight to see that they don't expire.

As another poster pointed out, taking those tax breaks away in our current economy makes no political (or economic) sense. It would be a disaster for the economy. As for the 15% ($800 billion over 10 years), I'm sure that the Republicans will be able to get Obama to bend over on that...

[indepat]

74. The Bush tax cuts have expired: the Obama tax cuts are now in effect

and I don't think these tax cuts will be allowed to expire. :patriot:

[pintobean]

77. You mean the Obama tax cuts

as of December 17, 2010.