On tax bill, Josh Gottheimer's Problem Solving is a problem

Josh Gottheimer, the member of Congress from New Jersey's 5th District (rural west and suburban north Jersey), beat a Tea Party incumbent in 2016 and so has to be cut some centrist slack. He has made bipartisanship his brand and co-leads the self-named Problem Solvers, a caucus of about 40 reps, half Republican and half Democrat. In the summer, after ACA repeal bills failed in the Senate, the Problem Solvers put forth an ACA marketplace stabilization proposal that looked rather like the Alexander-Murray bill that later took shape in the Senate (discussed in this post). It got no traction but did no harm.

In tax bill season, though, Gottheimer's bipartisan shtick is turning dangerous, IMO.  He has said he wants to "get to yes" on a tax cut bill; he's put out a proposal, in concert with NJ Republican Leonard Lance, that avoids the most direct harm to New Jersey (restoring SALT and mortgage deductions) while ignoring the bill's overall devastation of the federal budget and disfiguration of the tax code. This too will probably do no harm...but if the bill that comes out of House-Senate conference does mostly restore the SALT and mortgage deductions, a few Democratic votes in support would be a very bad thing.

That's my working assumption, anyway - and I have a letter in NorthJersey.com arguing as much. Gottheimer's claims that his plan provides "deficit reduction" particularly stick in the craw:

Racism in service of plutocracy: Beutler's response to Chait

Jonathan Chait's two-front argument that 1) the Republican policy platform has deep roots in slavery and racism, but 2) Democrats are too quick to ascribe racism to individual conservatives, their policy positions and utterances, angered a lot of progressives, who see false equivalence as well as neglect of the real effects of conservative policies on African Americans and other minorities.

On the false equivalence front, Brian Beutler argues that Chait has mischaracterized progressives' case that the Republican gestalt is racist:

Obama's drinking gourd ain't no Holy Grail

(reposted from 8/10/13)

Was I too dark a prophet when I said
To those who went upon the Holy Quest,
That most of them would follow wandering fires,
Lost in the quagmire? -- lost to me and gone,
And left me gazing at a barren board.

-- King Arthur to his knights, in Tennyson's Idylls of the King, The Holy Grail

Now, I think the really interesting question is why it is that my friends in the other party have made the idea of preventing these people from getting health care their holy grail, their number-one priority. The one unifying principle in the Republican Party at the moment is making sure that 30 million people don't have health care and, presumably, repealing all those benefits I just mentioned -- kids staying on their parents' plan; seniors getting discounts on their prescription drugs; I guess a return to lifetime limits on insurance; people with preexisting conditions continuing to be blocked from being able to get health insurance.

-- President Obama, press conference, 8/9/13

Obama has more than once tagged his Republican opposition with a fundamentalist mindset on economic issues. In his mind, they do indeed follow wandering fires -- mirages of a "holy quest." He has used the metaphor before to denote their worship of false economic gods.

Obama's drinking gourd ain't no holy grail

Was I too dark a prophet when I said
To those who went upon the Holy Quest,
That most of them would follow wandering fires,
Lost in the quagmire? -- lost to me and gone,
And left me gazing at a barren board

-- King Arthur to his knights, in Tennyson's Idylls of the King, The Holy Grail

Now, I think the really interesting question is why it is that my friends in the other party have made the idea of preventing these people from getting health care their holy grail, their number-one priority. The one unifying principle in the Republican Party at the moment is making sure that 30 million people don't have health care and, presumably, repealing all those benefits I just mentioned -- kids staying on their parents' plan; seniors getting discounts on their prescription drugs; I guess a return to lifetime limits on insurance; people with preexisting conditions continuing to be blocked from being able to get health insurance.

-- President Obama, press conference, 8/9/13

Obama has more than once tagged his Republican opposition with a fundamentalist mindset on economic issues. In his mind, they do indeed follow wandering fires -- mirages of a "holy quest." He has used the metaphor before to denote their worship of false economic gods.

The tax-cutters' eternal advantage

David Atkins does not like Obama's proposed Medicare and Social Security benefit cuts and complains about moral um, unequivalence in D.C.:

The idea that spending cuts are morally and politically superior to revenue increases is so ingrained the Village political press that to even put the shoe on the other foot creates an unthinkable scenario. This is one of Ronald Reagan's most baleful legacies: a Washington establishment that can't stop believing it's the 1980s or early 1990s.

Yes, Reagan did change the trajectory

Jonathan Bernstein would have us believe that the notion that Ronald Reagan, in Obama's words, "changed the trajectory of American politics" is a mirage -- and Obama would do well to stop chasing it.

It's one more salvo in the continuing campaign of political scientists who engage with the broader public to convince us (with pesky evidence) that almost nothing that we think matters in politics really matters, or matters much, or matters in the way we think it does. Here's the core of Bernstein's 'untransformational Reagan' argument:

Take a look at the Reagan myth. Did Reagan “ideologically shift the nation in his direction?” If we’re talking about voters, the answer is pretty clearly no. As Northeastern political scientist Bill Mayer showed in The Changing American Mind, if anything, public opinion on many issues became more liberal, not more conservative, during Reagan’s presidency (see also a nice post from George Washington University political scientist John Sides).

As in December 2010, trading tax cuts

The pending debt ceiling deal is shaping up as quite a Rorschach test. On the left, Michael Cohen crows that the GOP caved, while Noam Scheiber is convinced that Obama has finally and definitively destroyed his negotiating cred.  Reception on the left was shaped this morning, as the deal came gradually into focus, by an uncharacteristic freakout from Jonathan Chait. Just returned from vacation, Chait seemed to be reacting more to Obama's offer several weeks ago to start income tax hikes at the $400k level than to overnight developments (though the overnight news did move that higher threshold to the realm of the more limited deal).  Me, I wavered between "poles of hope and fear... Dec 2010 tax deal vs.crappy Jul 2011 deal Boehner did O favor of pulling out of. ' My hope:  "Perhaps cliff deal postmortem will look like 12/2010 - jaw-dropping headline concession offset by lower profile plusses."

My sense at this point is that the pending deal does look something like the 2010 agreement: a steep headline price paid to preserve core Obama priorities, with judgment yet again to be deferred until another round of deficit reduction is negotiated in 2013. On that second point, Obama laid down a key marker in his press statement this afternoon: that all subsequent spending cuts would have to be offset by tax hikes of equal value.  It's unclear how he would enforce that: his ability to do so depends both on how the sequester is handled and how he plans to make good his proclaimed refusal to negotiate under threat of a debt ceiling default. If he can make his own ground rules stick, then this is indeed a good deal.

The deal resembles the December 2010 agreement insofar as in both cases, the two sides found it easier to trade favored tax cuts than to either cut spending or raise revenue (surprise...).  In exchange for holding households earning $250k--$450k nearly harmless (though they are subject to some deduction limitations), the Democrats will have secured (if the deal goes through) 5-year extensions of Obama's tax credits for low- and middle-income Americans (expansions of the Earned Income Tax Credit, the Child Tax Credit, and the credit for college tuition), alternative energy, and business investment, along with a one year unemployment benefit extension. Thus Obama continues to forego hardball to maximize future revenue in favor of easing financial pressure on the needy and nonwealthy, stimulating the economy, and advancing his energy policy.  Long-term, I suspect he thinks that revenue can be squeezed out of the GOP in stages, but that the economy and Americans with stagnant incomes need help now.  Those who insist that our chief challenge is to stimulate the economy rather than reduce the deficit ought to be pleased.

If loophole closures are benefit cuts, are benefit cuts tax hikes?

Eduardo Porter suggests that raising new tax revenue by cutting loopholes opens up a semantic loophole:

Though the offer to raise money by closing loopholes has a bipartisan pedigree — based on a plan proposed last year by the Democrat Erskine Bowles and the Republican Alan Simpson, the chairmen of President Obama’s deficit commission — it relies on rhetorical sleight of hand. If tax breaks are equivalent to government spending, eliminating them is equivalent to spending cuts. Mr. Boehner’s offer to do away with tax breaks in exchange for cutting entitlements raises no new revenue. It amounts to cutting spending twice.

Porter goes on to point out that a) Democrats have opened many "loopholes" for the poor and middle class because it's often the only form of social spending that Republicans will allow, but b) on balance, tax deductions disproportionately benefit the wealthy. His main point: we should consider each break on its merits, not make a shibboleth out of closing out as many as possible.

I would add a couple of wrinkles. First, Republicans are conflicted about whether to regard tax breaks for the nonwealthy as spending or tax cuts.  On the one hand, they've not only acceded to Democrat-initiated lower-income tax breaks, but sweetened their own wealthy-tilted tax cut goodies by cutting taxes and expanding loopholes for the nonwealthy as well.  On the other hand, they've come to regret the low-end largess, as all that bitching about the 47%, the lucky duckies who pay no income taxes, demonstrates.

Second, if Republicans are pulling the wool over by treating loophole closures as tax hikes, they've got themselves fooled as well.  When such tax "increases" were being bruited in the debt ceiling negotiations of 2011, Tom Coburn and others struggling to wriggle out of Grover Norquist's embrace experimented with casting  loophole closures (e.g., the ethanol subsidy) as "spending cuts."  It didn't fly; Norquist screamed that any phased out tax break would have to be offset by another tax break, and the GOP fell in line.

Plain sense, and a touch of nonsense, from Obama on taxes

Evoking the harm apparently done to the economy by last year's debt ceiling debacle, Ezra Klein frames Obama's call today for a one-year extension of the Bush tax cuts for the lower 98% -- but not for the top 2% of earners -- as a political gamble.  The looming fiscal cliff, Klein suggests, threatens to damage confidence this fall as the debt cliff did last summer; Republicans in Congress certainly won't accede to Obama's proposal before the election; and any drag on growth right now could un-elect Obama.

I don't really think there's any risk. Or rather, the risk of hurting the economy through continued deadlock on the tax question is the lesser of two risks. The alternative Klein holds out is capitulation -- extending all  the tax cuts for a year. That would not only infuriate the base, reprising the trauma of late 2010; it would reinforce what I believe is the chief rap against Obama among independents or undecideds: weakness and ineffectuality, being unable to put his preferred policies across.  

Gallup's scary polling on economic issues

As the economy goes, so goes the electorate's assessment of the President's ability to run the economy. That's the way it's always been, in all electorates. It's no good railing or making excuses. It's an electoral law of nature.

Nonetheless, two numbers in Gallup's current polling of American's economic assessment of the two candidates frighten and anger me. Voters give Romney the edge in handling deficit and debt, 54-39, and economic growth, 52-42. They give Obama the edge on other economic issue rated of high importance, including healthcare and college costs, and the candidates are virtually tied on jobs.   But the two on which Romney leads are the broadest economic fundamentals.

David Frum is making sense

David Frum has a simple syllogism for Republicans on health care:

a) If you succeed in killing health care reform this time around, health care costs will spiral out of control
b) If health care inflation is not curbed, the United States will never see another tax cut
c) What are Republicans for, anyway?

Frum is in sustained combat with the wackos that have taken over his party. And he's serenely confident that he will win:

We have been besieged but this is a fight worth doing. And I have to say I'm thinking of changing our slogan. I'm adapting something from the old Panasonic folks, our new motto's going to be "just slightly ahead of our time." I know the conservatives of this country are not with me on these issues today. But I know equally well they will be with me on these issues in the future. They are just going to learn it, unfortunately, a harder way.

Let's hear it for good old-fashioned courage.

The Wall Street Journal calls out Palin on earmarks...kind of

The WSJ is revisiting the subject of Sarah Palin's earmarks today.

Background: Last week, Daily Kos blogger Paul Anderson called out the WSJ for disappearing some crucial context from a report on Sarah Palin's earmark requests. Originally, the article by Elizabeth Holmes and Laura Meckler ended thus:

At a rally today, Sen. McCain again asserted that Sen. Obama has requested nearly a billion in earmarks. In fact, the Illinois senator requested $311 million last year, according to the Associated Press, and none this year. In comparison, Gov. Palin has requested $750 million in her two years as governor -- which the AP says is the largest per-capita request in the nation.

Hours later, the closer had morphed to this:

"The only people 'lying' about spending are the Obama campaign. The only explanation for their hysterical attacks is that they're afraid that when John McCain and Sarah Palin are in the White House, Barack Obama's nearly $1 billion in earmark spending will stop dead in its tracks," Mr. Rogers said.

The WSJ claimed that the initial stat comparison was incomplete and misleading; late in the day they posted this:

Gov. Sarah Palin has requested $453 million in federal earmarks in her two years in office, according to Taxpayers for Common Sense. That total doesn't include any requests made by the Alaska Railroad or the University of Alaska. Sen. Barack Obama has requested $860 million in earmarks during his four years in office, excluding $78 million for projects that were of national interest and requested by many lawmakers, according to the group. He requested no earmarks for fiscal year 2009.

As Paul pointed out, the do-over left out the most important part - the closing clause: which the AP says is the largest per-capita request in the nation.

Today, Meckler (with colleague John R. Wilke) is back with a followup detailing Palin's earmark requests. It's not bad; it highlights McCain's lies, e.g. his claim on The View that Palin never sought earmarks as governor, and his lame responses to being called out. It also gets across the bogus nature of the McCain-Palin earmark smears on Obama:

On the campaign trail, Gov. Palin has repeatedly attacked Sen. Obama on earmarks. "Our opponent has requested nearly one billion dollars in earmarks in three years. That's about a million for every working day," she said at a rally in Albuquerque, N.M.

Sen. Barack Obama requested a total of $860 million in earmarks in his Senate years, according to Taxpayers for Common Sense. That doesn't include $78 million for projects that were national in scope and had been requested by many lawmakers. Sen. Obama halted all earmark requests in fiscal 2009.

It is difficult to compare Sen. Obama's earmark record with Gov. Palin's -- their states differ in size, for instance, and the two candidates play different roles in the process. But using the same calculation that the McCain campaign uses, the total amount of earmarked dollars divided by the number of working days while each held office (assuming a five-day workweek, every week, for both), Gov. Palin sought $980,000 per workday, compared with roughly $893,000 for Sen. Obama.

Still MIA, though: the per capita comparison. Alaska has 600,000 people, Illinois 13 million. Not to mentionthat Alaska is flush with petrodollars. -- which Meckler and Wilke do point out.

Of course the whole conversation is ridiculous; demonizing earmarks is McCain's smokescreen for radically cutting taxes without substantively cutting spending. What governor or Senator worth her salt wouldn't get all the appropriate appropriations she could for her state?

I'd like to hear Obama say clearly: McCain obsesses about earmarks because he has no clue how he'll cut spending to offset the $1.5 trillion in new tax cuts for the wealthy he's proposing. More distractions, more phony attacks.