Over The Fiscal Cliff, Sort Of

Automatic tax hikes and spending cuts took effect at midnight. A deal involving the executive and half of the legislative branch could largely reverse them.

Fiscal Cliff Cartoon: Thelma & Louise Dumber and Dumber Cagle

Midnight having struck without countervailing legislation in place, the United States has gone over the so-called fiscal cliff. A deal struck by President Obama and Senate leaders could mitigate the worst effects retroactively if the House decides to go along.

NYT (“Tentative Deal Is Reached to Raise Taxes on the Wealthy“):

Furious last-minute negotiations between the White House and the Senate Republican leadership on Monday secured a tentative agreement to allow tax rates to rise on affluent Americans, but not in time for Congress to meet its Dec. 31 deadline for averting automatic tax increases and spending cuts deemed a threat to the economy.

While the Senate moved toward a vote on legislation to avoid the so-called fiscal cliff, the House was not going to consider any deal until Tuesday afternoon at the earliest, meaning that a combination of tax increases and spending cuts would go into effect as 2013 began. If Congress acts quickly and sends the legislation to President Obama, the economic impact could still be very limited.

Under the agreement, tax rates would jump to 39.6 percent from 35 percent for individual incomes over $400,000 and couples over $450,000, while tax deductions and credits would start phasing out on incomes as low as $250,000, a clear win for President Obama, who campaigned on higher taxes for the wealthy.

“Just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans,” Mr. Obama said at a hastily arranged news briefing, with middle-income onlookers cheering behind him. “Obviously, the agreement that’s currently being discussed would raise those rates and raise them permanently.”

Or, at least, until a future Congress lowers them and a future president signs the bill. There’s no such thing as “permanent” legislation, let alone tax rates. Considering that, since the rates are now technically already raised for all Americans, the Republicans have technically made true on their pledge: They’ll now be voting to cut taxes on the bottom 99 percent of earners, not raise them on the top 2 percent. Moving outside the silly technicalities, this is in fact a tax cut on the bottom 99 percent of earners; it just won’t seem like one, since several extensions of the “temporary” Bush tax rates make these rates seem like the new normal.

Democrats also secured a full year’s extension of unemployment insurance without strings attached and without offsetting spending cuts, a $30 billion cost.

A perfectly sensible compromise, and likely the right thing to do, but I’m a little fuzzy on how one side agreeing to cut taxes on 99 percent of households and the other side agreeing to spend $30 extra is going to close the deficit. Which was ostensibly the objective.

In one final piece of the puzzle, negotiators agreed to put off $110 billion in across-the-board cuts to military and domestic programs for two months while broader deficit reduction talks continue. Those cuts begin to go into force on Wednesday, and that deadline, too, might be missed before Congress approves the legislation.

Given that the tax issue would seem to be off the table, with Republicans having gotten more than the cards they held suggested they should have been able, it’s not at all clear to me what leverage exists to forge a deal on spending cuts. My guess is that means we won’t see much in the way of spending cuts. In the short term, that’s probably the right outcome—austerity just doesn’t make sense during slow economic times—but we actually need to rethink our massive military spending and address very real issues with entitlement commitments.

To secure votes, Mr. Reid also told Democrats the legislation would cancel a pending congressional pay raise — putting opponents in the politically difficult position of supporting a raise — and extend an expiring dairy policy that would have seen the price of milk double in some parts of the country.

So, a symbolic move on Congressional pay—almost certainly right optically but fiscally irrelevant and arguably silly—and a little bit of stupidity. (No, the federal government isn’t holding milk prices down artificially; it’s doing just the opposite. But we averted going back to absurdly high 1947-level supports for no apparent reason.)

Anticipating Senate approval of the deal, Speaker John A. Boehner late Monday said the House would “honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members — and the American people — have been able to review the legislation.”

Ezra Klein‘s summary of the deal, which the Senate overwhelmingly passed in the wee hours, is good:

The top tax rate rises to 39.6 percent for individuals making more than $400,000 and families making more than $450,000. Capital gains and dividends will be taxed at 20 percent with the same income thresholds. The Personal Exemption Phaseout (PEP) is set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000. The AMT is patched permanently. The estate tax would exempt estates up to $5 million and tax them at 40 percent above that.

The various business tax credits — R&D, wind, etc — would be extended through 2013, as would unemployment insurance. The stimulus tax credits — namely, the expansions of the Earned Income Tax Credit, the Child Tax Credit, and the college credit —  would be extended for five years, which is hugely important to the White House. The scheduled cuts to doctors in Medicare would be averted for a year through spending offsets that neither side considers injurious. The treatment of the sequester is still up in the air, as the president is refusing to offset it unless revenues are part of the mix.

It would be going too far to say White House officials are thrilled with this package. But it looks pretty good to them. As they see it, it sets up a three-part deficit reduction process. Part one came in 2011, when they agreed to the Budget Control Act, which included more than a trillion dollars in discretionary spending cuts. Part two will be this deal, which is $600 billion — and maybe a bit more — in revenue. And part three is still to come, but any entitlement cuts that Republicans want will have to be matched by revenues generated through tax reform. If Republicans want $700 billion in further spending cuts and the White House insists on $700 billion in tax reform, they’ll end up with more revenue than in Obama’s final offer to House Speaker John Boehner.

My guess is that House Republicans will ultimately sign off on the agreement. It achieves none of the fiscal austerity they wanted, and some number of them will prefer the status quo—the full-on going over the cliff—to this deal. But they can’t possibly stand in the way of tax cuts for essentially their entire constituency in the name of reducing spending.

In a perfect world, we’d get real tax reform, including ending such abominations as the Alternative Minimum Tax. But I don’t see any path to doing good right now; the best we can seem to get is averting self-imposed disaster.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. superdestroyer says:

    The current deal is a total win for the Democrats. Tax increases now, no spending cuts, a permanent adjustment to the AMT that is a massive win for blue states, and continuation of special pork programs for the middle class.

    McConnel and Boehner should step down because it is blatantly apparent that they are incapable of making a single cut to federal spending. The Repubican Party should disband because it is obvious that they serve no purpose in the U.S. Tax increases today for the promise of spending cuts is the future is a fools deal and a total win for the Democrats.

  2. Ben Wolf says:

    The media have, to a man/woman, apparently missed that the payroll tax has been allowed to increase to 6.2%. This was the most stimulative tax cut of all and will negatively impact the economy starting in a few weeks.

    If people want to increase taxes on the wealthy for purposes of equity and social engineering an argument can be made for that, but focusing on a tax increase to reduce the deficit has no economic rationale behind it, particularly when it comes at the cost of a payroll tax hike which will drain aggregate demand at a time of persistent high unemployment.

  3. Eric Florack says:

    commentors one and two have it nailed.
    its annoying. The left likes to tell us that the GOP wont compromise.
    Thing is, we got here… we got into this mess by means of a deal… actually several deals… all
    compromises. Why would anyone think more deals, more compromises were going to fix it?

  4. Tony W says:

    Moving outside the silly technicalities….

    Normally I would lament that those technicalities are the meat of the next campaign. Campaign slogans longer than 5 words seem to confuse the people. “Me cut taxes, them bad” and “Yay ‘Merica”

    However, given the low adherence to truth and honesty I observed during the recent presidential campaign, particularly on the Republican side, I don’t know why they bothered waiting until after the New Year.

  5. James Joyner says:

    @Eric Florack: You can’t be that much of an idiot. You just can’t. We have a Democratic president. Democrats have the majority in the Senate. The Bush tax cuts automatically expired at midnight. How is it that you expect the Republicans to get anything they want without compromising with Democrats?

  6. john personna says:

    If this minimal deal passes it will because corporate donors want corporate tax credits. That is the only constituency I can see calling in to support this package.

  7. sam says:

    @James Joyner:

    @Eric Florack: You can’t be that much of an idiot.

    James, this is a guy who thinks the Republicans lose elections because they fail to nominate Atilla K. Hun (R-Cowflopville.Tx) for president.

  8. john personna says:

    (I do think this is a good incremental improvement. With more to come it would be exactly my kind of evolution, not revolution. It’s just hard to find what in it will actually driver House Republicans. Other than corporate tax credits.)

  9. john personna says:

    Amusingly Ross Douthat is most concerned about Democrtat’s inability to raise tax on the non-rich.

    That is pretty much supreme irony.

    One would think Ross would connect the nearest dots … that if voters will not really cut services, then the Republicans too must think about raising those taxes, in the longer term.

  10. Andre Kenji says:

    @john personna:During the 90´s, I wasn´t the avid reader of American Political magazines and other American News that I´m today, but I remember people in the Brazilian press marveled at Bill Clinton and Dick Morris, because they both seem to think that voters weren´t voters, but consumers. I don´t know if people in the US also noted that.

    That´s part of the problem. I remember a Democratic Strategist saying on Planet Money that politicians should not ask “sacrifice” from people, and both Democrats and Republicans are playing the same game here.David Stockman´s definition of “Keynesians on the Right” is right on the money, because Republicans uses Keynesian arguments to defend tax cuts.

    There are lots of criticism regarding the “no taxes increase” of the Republicans, but the Democrats´ position of “Tax the rich, but not me” is also problematic. Specially because living in society should mean SOME sacrifice to the general good, not living in a society where there is only one word; “Me, Me, Me”.

  11. rudderpedals says:

    Those unhappy with this deal (self included) take solace in the likelihood that Boehner/Cantor will fail to bring the far right core along for the ride and the thing won’t even get a vote before the leadership election.

  12. C. Clavin says:

    Yes…he is that much of an idiot.

    It seems like the White House did what it needed to to keep the recovery going…with the exception of the payroll tax expiration. But that was always a double-edged sword…not funding SS fully…letting it expire is the conservative thing to do.
    Overall the success of this can only be judged by what happens next…with the debt ceiling and sequestration.
    It appears Republicans will finally vote to raise revenues. That in itself is some sort of victory for reality in governing…assuming the House passes this. My guess is that it will be Democrats and a few Republicans voting for it…while the Tea Stain Caucus votes no…another loss for them.

  13. OzarkHillbilly says:

    Over The Fiscal Cliff,

    AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAGGGGGGGGGGGGHHHHHHHHHH!!!!!!

  14. al-Ameda says:

    I can’t wait until the juvenile delinquents that run the House vote on this.

  15. OzarkHillbilly says:

    Harold Pollack over at the Reality Based Community has a great diagram that sums this deal up perfectly.

  16. Tyrell says:

    Let’s not forget the pay raises for Biden and Congress. Just where does that fit in ? How about pay raises for the rest of us ?

  17. Rafer Janders says:

    A perfectly sensible compromise, and likely the right thing to do, but I’m a little fuzzy on how one side agreeing to cut taxes on 99 percent of households and the other side agreeing to spend $30 extra is going to close the deficit. Which was ostensibly the objective.

    Whose objective was that? It was certainly never the Republicans’ objective. Their objective was only and solely to stop the rich from paying taxes and to make everyone else pay instead. The rest is only window dressing.

  18. OzarkHillbilly says:

    @Tyrell:

    Let’s not forget the pay raises for Biden and Congress. Just where does that fit in ?

    From JJ’s article:

    To secure votes, Mr. Reid also told Democrats the legislation would cancel a pending congressional pay raise — putting opponents in the politically difficult position of supporting a raise —

  19. Stonetools says:

    This aint my best deal, but it’s the best the President thinks he can get.
    I was one of those ” go over the fiscal cliff, then deal ” types, but the President wanted certain fical stimulus measures , like unemployment compensation extension into the mix, and was uncertain he would get them in a post Cliff deal. Various liberals thought that House Republicans would vote for Unemployment insurance extension post cliff , or ” face political suicide” but I’m not so sure about that, given gerrymandering and House Republicans fear of primary challenges.
    A big problem I see with this is that with all the leverage in the world , the President blinked on the 250k limit on increasing tax rates for the wealthy. If he blinks now, then it likely he’ ll blink later on the debt ceiling negotiations in March. He just isnt willing to let the hostage die, and the Republicans know that now. Now this may be 11 dimensional chess and he is still betting on the House Republicans to blow up this deal , so all the blame falls on them, but I doubt it.

  20. Ben Wolf says:

    @john personna:

    Amusingly Ross Douthat is most concerned about Democrtat’s inability to raise tax on the non-rich.

    I’m beginning to think Douthat is stupid. Wha the hell does he think a payroll tax increase is? Or did he miss that one too?

  21. OzarkHillbilly says:

    @Rafer Janders:

    It was certainly never the Republicans’ objective.

    You forgot their other objective: The transfer of wealth from Old People to the Rich*.

    * otherwise known as the “end of Social Security”.**

    **otherwise known as the “privatization” of Social Security.***

    *** because the richest country in the world can not afford to do what every other western democracy has done.****

    **** really.

  22. Tyrell says:

    @Andre Kenji:Our leaders routinely talk about sacrifice while voting themselves pay raises and extra benefits. The American people are sacrificing and will sacrifice more – when we see our leaders sacrifice. While many people are saying “me, me, me, me!!” (Many of the Occupy Wall Street people for example; wanting taxpayers to pay for their Ivy League degrees) all the while ceo’s run companies into the ground or move them to Mexico, then take off with millions; our leaders (past and current) are saying ” let the public drop dead, I’ll get mine before the money runs out”.

  23. OzarkHillbilly says:

    @Ben Wolf:

    I’m beginning to think Douthat is stupid.

    What was your first clue?

  24. Andre Kenji says:

    @Tyrell:

    Our leaders routinely talk about sacrifice while voting themselves pay raises and extra benefits

    The last US President to openly talk about sacrifice was a guy named James Earl Carter Jr., in a speech that would become infamous. When Obama talks about “shared sacrifice” he is talking about “raise taxes on the rich, not one me”.

  25. john personna says:

    Igor Greenwald, at Forbes, is quite down on the trade-off:

    Happy Higher Payroll Taxes

  26. john personna says:

    @Andre Kenji:

    I think he did just raise taxes on himself, actually.

  27. superdestroyer says:

    @john personna:

    Did you read what he wrote. The American people have an appetite for $4 trillion dollar plus of government services. There is no way that they can be funded by raising taxes on the top 2% or so. If the Democrats are going to deliver of their vision of more entitlement, a bigger safety net, and a larger federal government, then everyone will have to pay more taxes. In the long run, how will the Democrats deliver on their promises on more government without running trillion dollar deficits forever?

  28. john personna says:

    @superdestroyer:

    It is just a continuing amusement that every rich person who supports higher taxes on the rich is automatically rejected. He doesn’t count, you see. That so that you can make the case that it is all the poor people talking. No one else.

  29. Argon says:

    @James Joyner:

    @Eric Florack: You can’t be that much of an idiot.

    Heh. Maybe he was thinking that the Democrats shouldn’t have compromised?

  30. superdestroyer says:

    @john personna:

    If you actually read what most of those rich say, they want taxes to go up on income while they earn most of the money from capital gains.

    Also, the federal government is running over a $1 trillion dollar a year budget. income taxes would have to be more than doubled to make up that deficit. There is no enough income, from any source, to make up that $1 trillion dollar deficits. Progressives have lied to Americans when they claim that the deficit can be fixed by just taxing the rich. The only way to up an end to the deficit without making cuts is to raise everyone”s taxes.

    Also, what the Republicans should have learned from the 2012 election, tax credit and low marginal tax rates just create more automatic Democratic Party voters. People who do not pay income taxes do not care how much money the government is spending and do no care how high the deficits are. All they care about is getting more out of the government than they put in.

  31. Tyrell says:

    How about cutting some of this ridiculous foreign aid to countries like Egypt? Bring most of our troops home and put them patrolling the southern borders. If some other country starts acting up, we can send them a message by drone instead of sending in troops.

  32. john personna says:

    @superdestroyer:

    First of all .. you sound like you are with me that all of the “temporary” Bush tax cuts should expire.

    That’s great.

    After that though … it’s stuff like Warren Buffet can’t talk about a Buffet Rule because he’s just some random rich guy. If a poor person talks about it, they hate the rich. Repeat ad absurdum.

  33. Andre Kenji says:

    @john personna: I´m not talking about raising taxes on Obama, I´m talking not about raising taxes on the voters, only on the “rich”.

  34. superdestroyer says:

    @john personna:

    Raising taxes on Warren Buffet does not make up a $1 trillion dollar deficit. Such talk is just meant to distract from the real issue is that Americans refuse to pay for the government that they demand.

    Of course, the best way to create more conservatives would be to raise everyone taxes and tell everyone that they only way to pay less is to make cuts. The federal aid to things like NPR, PBS, NEA, NEH would not last a day if people were forced to pay full retail for government.

    Please stop telling the lie that raising taxes on the rich would eliminate the deficit.

  35. Rafer Janders says:

    @superdestroyer:

    People who do not pay income taxes do not care how much money the government is spending and do no care how high the deficits are. All they care about is getting more out of the government than they put in.

    I’ll admit, this does sound a bit like Mitt Romney to me. Superdestroyer may have a point.

  36. Andre Kenji says:

    @john personna:

    After that though … it’s stuff like Warren Buffet can’t talk about a Buffet Rule because he’s just some random rich guy.

    More or less. The big problem of the American Tax System is something called “Capital Gains”, because that helps to create stock bubbles. Combine that with artificially low interest rates and then people that would be saving is almost forced to invest on Wall Street. That´s a big ingredient of 2008; You could lower or even abolish the Corporate Tax and increase Dividends/Capital Gains taxes. That would creates incentives to companies to invest money. Besides that, the Capital Gains Deduction is a big reason why the rich pays so little in taxes. A high income rate and a Capital Gains deduction means that small business owner are screwed while Bankers pays very little on taxes.

    That´s something that Warren Buffett should be defending(That´s would really cost money to him), not a Buffett Rule.

  37. john personna says:

    @Andre Kenji:

    I was just observing that Obama is a rich guy, raising taxes on the rich, getting trashed for “raise taxes on the rich, not one me”.

    In many cases that is by people who don’t want tax increases at all.

  38. john personna says:

    @Andre Kenji:

    Technically, Buffet’s focus was on “carried interest” which is legally grouped with capital gains in the US, but unlike it does not come from an investment. It is a return on labor, specifically the management of other people’s investment. The key thing in the Buffet Rule controversy was whether money managers should be taxed like their investors.

    I believe capital gains would mainly affect small business when they sell their stake, and not from business sales and receipts.

    Beyond all that though, the question should really be why the rare $10M/yr guys should be able to piggy-back on arguments about small business, and grandma selling her home, for capital gains.

    They are obviously not alike.

  39. john personna says:

    @superdestroyer:

    If you’ve been reading me at all carefully you know that I have wanted the Bush tax cuts to expire for some time.

    Republicans have long opposed that. Their most recent argument has been to adopt the Democrat’s fear of austerity.

    What should I think when you accost me now, asking me to be where I’ve been all along?

    I think that in the cliff the Republicans might be having some kind of deathbed conversion.

  40. Andre Kenji says:

    @john personna:

    I believe capital gains would mainly affect small business when they sell their stake, and not from business sales and receipts.

    Just ask Mitt Romney.

  41. john personna says:

    @Andre Kenji:

    Via Bruce Bartlett:

    Significantly, much of Mr. Romney’s capital gains income achieved this treatment through a special tax loophole called carried interest. According to recently released documents, executives at Bain Capital, where Mr. Romney made the bulk of his estimated $250 million fortune, saved $200 million in federal income taxes and another $20 million in Medicare taxes because of the carried interest loophole.

  42. superdestroyer says:

    @john personna:

    There is nothing that the Repubilcans can do to remain relevant to politics. They are justing trying to hang on the pork barrel spending and ear marks for a couple more years.

    In the long run, the percentage of the GDP that the government consumes will continue to increase and even if the Democrats increase taxes, they will increase spending even more.

  43. Just Me says:

    Pretty much what I expected. Tax increases now in exchange for some future but probably won’t happen spending cuts-democrats get what they want (tax increases without having to cut any spending).

    In the long run, how will the Democrats deliver on their promises on more government without running trillion dollar deficits forever?

    I don’t think they care about deficits and as long as they can run them up now, they don’t particularly care how or who pays for them later. Our government is spending what they don’t have now and screwing over future generations.

  44. Rafer Janders says:

    @Tyrell:

    How about cutting some of this ridiculous foreign aid to countries like Egypt?

    Congratulations: you have just successfully addressed less than 1% of the US budget.

    Or, in terms you may be able to understand, if the US budget were $1, you would have just saved less than one penny.

  45. john personna says:

    @superdestroyer, @Just Me:

    You both criticize the currently responsible party because it might be irresponsible later.

    Neat.

  46. Andre Kenji says:

    @john personna: That´s was during his time at Bain. I´m talking about now, when he is retiring and living from his investments in tax havens.

  47. Just Me says:

    You both criticize the currently responsible party because it might be irresponsible later.

    I don’t particularly think this is a “might” situation.

    The GOP has already on two previous occasions done the “Raise taxes now, and we cross our hearts and promise to cut spending later” deal and have been screwed over both times.

    I am pretty willing to bet the democrats have no intention of signing on for spending cuts.

  48. john personna says:

    @Just Me:

    Most of those are made-up “promises.”

    I mean for heaven’s sake. The game from the GOP continues to be “we can’t name cuts.” “You must name cuts.” “If you won’t name cuts, you are just breaking some promise you probably never made.”

    Act like grown ups. If you want cuts you should at an absolute minimum be able to call out what exactly you are asking for. That’s step one. Step two is to show that it polls and is the democratic outcome.

  49. john personna says:

    (If you don’t believe voters will accept sufficient cuts, stop pretending.)

  50. Andre Kenji says:

    @Just Me: “The GOP has already on two previous occasions done the “Raise taxes now, and we cross our hearts and promise to cut spending later” deal and have been screwed over both times.”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/24/the-gops-worst-cliff-myth/

  51. John Cole says:

    @James Joyner:

    You can’t be that much of an idiot. You just can’t.

    We should incorporate this into the Predictions for Next Year post, because I am reasonably sure Florack will spend the next twelve months proving you wrong.

  52. mattb says:

    @Andre Kenji:
    Thank you so much for that link. For year’s I’ve heard “Tipp O’Neill’s betrayal of Reagan” taken as a statement of truth, but no one has ever produced evidence of said betrayal. As with “Carter was leading Reagan”, it’s another great example of how the facts don’t match the myth.

    @John Cole – seconded.

    @Ben Wolf:

    The media have, to a man/woman, apparently missed that the payroll tax has been allowed to increase to 6.2%. This was the most stimulative tax cut of all and will negatively impact the economy starting in a few weeks.

    It’s also been largely ignored by just about everyone. I agree with you that the loss of those extra dollars, when compounded, is going to have a negative effect on the economy. A lot of people seem to dismiss the effect of an extra $20 a week. I suspect that we will discover it was being put into a LOT of small ticket purchases.

  53. al-Ameda says:

    @Tyrell: You do realize that foreign aid to countries like Egypt is an infinitesimally small portion of the federal budget, right?

  54. anjin-san says:

    You can’t be that much of an idiot. You just can’t.

    Yes he can. And he is far more representative of today’s GOP than you are.

  55. sam says:

    @John Cole:

    We should incorporate this into the Predictions for Next Year post, because I am reasonably sure Florack will spend the next twelve months proving you wrong

    Ain’t no bottom to that well.

  56. Stonetools says:

    Now this may be 11 dimensional chess and he is still betting on the House Republicans to blow up this deal , so all the blame falls on them, but I doubt it.

    Looks like Obama may just be right about the House blowing up the deal, after all. Obamasure can pick the right enemies.

  57. matt says:

    @mattb: I don’t know many people around here that would dismiss an extra 20 bucks a week as nothing.

  58. superdestroyer says:

    @john personna:

    The Democrats also refuse to name cuts (except Defense in the abstract) but Democrats refuse to explain how they are going to close a $1 trillion dollar deficit. Democrats like Paul Krugman keep arguing that the deficit should be much bigger and that the problem can just be kicked down the road. Of course, idiots like Krugman know that the demographic changes occuring in the U.S. will allow the Democrats to raise taxes much higher in the future with no risk of being punsihed at the polls.

  59. john personna says:

    @superdestroyer:

    Again, why would you expect liberals to name cuts? Why is that their job? If we go with the boilerplate, they are supposed to spend.

    This is such a simple idea, but it seems totally beyond conservatives. “We can’t achieve what we want, so you should, even though that’s not what you are about.”

    (Though actually remember all that stimulus? The spending that conservatives said would never go away? Because spending never goes away? It went away.)

  60. superdestroyer says:

    @john personna:

    The federal budget for FY2013 is bigger than the budget was the year of the stimulus. The spending did not go away. The government continues to spend at the same level for all four years of the Obama Administration. What is odd is that the Democrats want to increase spending while convincing themselves that the spending will have no adverse impact on the economy.

    If the Democrats are not going to cut spending, they should explain where the $1 trillion in additional revenue comes from. Taxing people who earn about $450K will never produce enough revenue to fund the govenrment that the Democrats want. What are the Democrats going to do in the future to fund the massive government that they want?

  61. john personna says:

    @superdestroyer:

    The key is Government Spending as Percent of GDP, link.

  62. Andre Kenji says:

    @superdestroyer:

    The federal budget for FY2013 is bigger than the budget was the year of the stimulus. The spending did not go away. The government continues to spend at the same level for all four years of the Obama Administration. What is odd is that the Democrats want to increase spending while convincing themselves that the spending will have no adverse impact on the economy.

    Errr, spending is growing because something like 38% of ALL the Federal Budget goes to programs serving people over 65(Medicare and Social Security). If the population over 65 is increasing than government spending goes up, and countries that have higher average age also have higher levels of government spending.

    A good way to cap government spending would be to control costs with Medicare, but the Republicans created a new Medicare Drug Benefit in 2003 and controlling costs of Medicare would mean that terrible dirty word, rationing, and Republicans convinced the electorate in 2010 that would mean killing Grandma in Death Panels or whatever.

  63. An Interested Party says:

    I don’t think they care about deficits and as long as they can run them up now, they don’t particularly care how or who pays for them later. Our government is spending what they don’t have now and screwing over future generations.

    Umm, this has been going on since Reagan was president…it is hardly new and it is certainly a bipartisan view…

  64. OzarkHillbilly says:

    The GOP has already on two previous occasions done the “Raise taxes now, and we cross our hearts and promise to cut spending later” deal and have been screwed over both times.

    I am pretty willing to bet the democrats have no intention of signing on for spending cuts.

    @Just Me:

    At what point do you figure out you have been suckered? Not by the Dem’s by the way.

  65. superdestroyer says:

    @Andre Kenji:

    Did the Democrats try to do away with the Medicare expansion in 2009 or 2010. No, the Democrats decide to create new entitlements and new programs that will grow much faster than planned. In the first four years of the Obama Administration, there were no real cutbacks and the executive branch did not even bother to make any proposals for budget cuts.

    As the Democrats become the one dominant party, the only path will be higher taxes, higher spending, and a smaller private sector.

    You’ve been warned too many times on this one: Stop hijacking threads with your “one party state” spiel. It’s well past tiresome at this point. We consider it trolling and will start aggressively treating it as such. Policing it will get old very quickly, at which point you’ll be banned from the site. – JJ

  66. john personna says:

    @superdestroyer:

    Again, you ask why Democrats can not be better Republicans.

    What the heck man, Republicans just lost, being Republicans. “Democrats, please change” is one heck of a Hail Mary.

  67. superdestroyer says:

    @john personna:

    I think you cannot argue that someone that passed when the Republicans is bad when the Democrats continued to fund it when they were the majority. Of course, if the Democrats really wanted Medicare Part D it makes sense that the Democrats would continue the program. Much like most Democrats were not really that anti-war but really just wanted to use the war to attack GW Bush. Four years after GW Bush, the U.S. is still in AFghanistan and the Democrats could not care less.

    However, the future is not about the Republicans but about how big the government will grow under future Democrats, now high taxes can go, and which groups will be the big winners and who will be the big winners. And I would say that the losers will be middle class whites who work in the private sector. They will pay higher taxes, have fewer economic opportunities a,d have a lower standard of living in the future due to decisions that are being made now.

  68. jukeboxgrad says:

    You can’t be that much of an idiot. You just can’t.

    Anyone in any doubt with regard to Florack’s status as an idiot should recall what he said on 10/21/12:

    Obama has lost re-election. The only question remaining is how large a victory Romney is headed for.

    And also what he told us a couple of days before Obama was elected (the first time): that he would lose and there would be “rioting in Grant park.”

    I’m looking forward to his future predictions, so I’ll know that I should bet the other way.

  69. jukeboxgrad says:

    sd:

    Taxing people who earn about $450K will never produce enough revenue to fund the govenrment that the Democrats want.

    This claim is repeated incessantly even though it’s quite false. The effective rate for the rich is now roughly half what it was in 1953. If we returned to that level (just for the top 1%), roughly half the deficit would go away. Link. With a higher rate (also on only the top 1%), the entire deficit would go away. Link.

  70. Andre Kenji says:

    @superdestroyer:

    Did the Democrats try to do away with the Medicare expansion in 2009 or 2010. No, the Democrats decide to create new entitlements and new programs that will grow much faster than planned

    No, the Democrats did not create new entitlements. Obamacare is a giant mess, but it´s not a entitlement per se. It´s true that Food Stamps recipients increased dramatically, but that´s not where the real spending is.

    Obama could not go way with Medicare Part D because Republicans were attacking him because he was supposedly cutting Medicare. The demagoguery of Medicare in 2010 made dealing with Medicare much more difficult: the Democrats, not the Republicans, are supposed to be the Party of Big Government. And since Bush spent so much and since there is so much love for Medicare in the GOP Obama has no incentive to deal with the deficits.

  71. superdestroyer says:

    @Andre Kenji:

    The subsidy for health insurance is an entitlement along with the healthcare coverage for 23-26 y/o. More goodies paid by others. If everyone gets insurance and the government subsidies a lot of it, it is an entitlement. Why do you think taxes have to raised to fund the program. Of course, the Democrats have already reneged on the cost cutting procedures, so it will even be a bigger mess.

  72. Pharoah Narim says:

    Most of this is much ado about nothing when taking the long term view. Over the next 30 years or so the boomer generation will die off and we’ll have a more favorable ratio of workers to retirees again for Medicare and SS. This “crisis” will literally right itself if we can keep the fake and wanna be soldiers in the GOP from starting another round of contractor welfare i.e. WAR. Politicians and voters drive looking at the hood ornament. Look down the road for a change.

  73. Andre Kenji says:

    @superdestroyer:

    The subsidy for health insurance is an entitlement

    Being forced to buy insurance is not an entitlement.

  74. James Joyner says:

    @superdestroyer: You’ve been warned too many times on this one: Stop hijacking threads with your “one party state” spiel. It’s well past tiresome at this point. We consider it trolling and will start aggressively treating it as such. Policing it will get old very quickly, at which point you’ll be banned from the site.

  75. superdestroyer says:

    @James Joyner:

    James,

    After the general election in November, there wre numerous posts on OTB on how badly the Republicans did with women, with Hispanics, with blacks, with young voters, with urban voters. The Republicans have lost the popular vote in 5 of the the last 6 elections. Yet, someone people are suppose to discuss politics as if all of those changes have not occurred.

    You live in the DC media market where much of the political coverage is of the District of Columbia and Maryland where the Republican Party is totally irrelevant and the Democratic primary is the real election. Yet, people are suppose to ignore that such places exist.

    Boehner and the House Republicans have made themselves irrelevant, yet, people are suppose to ignore that it has occurred and that somehow things will be different in the future.

    If you are going to make posts about how Congress is functioning, then it should be OK to point out how the Republicans have made themselves irrelevant to politics or governance in the U.S.

  76. James Joyner says:

    @superdestroyer: Nobody’s ignoring the outcome of the election or even the demographic implications. As you note, we’ve covered it extensively on the front page of the blog. But the answer to everything isn’t “one party state.” Or “zero sum game,” for that matter. (A private joke not aimed at you.)

    The Republicans having lost the election means that Obama controls the White House and the Democrats have the majority in the Senate. That, not some imagined future, is the playing field for a discussion of the current matter and, indeed, most short-term political stand-offs.