How Obama Tried to Sell Out Liberalism in 2011
By Jonathan Chait
TNR
WASHINGTON - JULY 23: U.S. President Barack Obama (R) meets with Speaker of the House John Boehner (R-OH) (L) in the Cabinet Room of the White House. Yesterday Boehner walked left debt negotiation talks with the Obama Administration, but accepted an invitation to meet with Obama, Senate Majority Leader Harry Reid (D-NV), Senate Republican Leader Mitch McConnell (R-AZ) and House Democratic Leader Nancy Pelosi (D-MD) today. (Photo by Kristoffer Tripplaar-Pool/Getty Images) Boehner here says if I cut entitlements, he'll think about giving me some magic beans someday.
Last summer, President Obama desperately attempted to forge a long-term deficit reduction deal with Congressional Republicans. The notion that he could get the House GOP to accept any remotely balanced agreement was preposterous and doomed from the start, but Obama responded to the increasingly obvious reality by reducing his demands of the Republicans to virtually nothing.
The Washington Post has a long narrative report about the negotiations between Obama and the House Republicans. The narrative frame of the Post’s account is that Obama blew the potential deal at the last minute. That’s a story that people close to Obama’s fired chief of staff, Bill Daley, have been peddling for a long time. But that conclusion is utterly belied by the facts in the Post’s own account. But let’s put that aside for now, because the facts in the Post’s account support a different and far more disturbing conclusion: Obama was even more desperate to cut a deal than previously believed — dangerously desperate, in fact.
It has previously been reported that Obama had offered to John Boehner to make a series of cuts to Medicare, Social Security, and the domestic budget, to reduce top-end tax rates, and to prevent the expiration of the Bush tax cuts, in return for increasing tax revenue (over current tax levels) by about $800 billion over ten years. That is a pitiful sum of new revenue, less than half as much as recommended by deficit proposals by Bowles-Simpson, the Bipartisan Policy Center, and other bipartisan worthies. The blockbuster fact in the Post’s report, which the story does not in any way grapple with, is that even the $800 billion in tax revenue offered by Boehner was not, in fact, $800 billion in tax revenue:
TNR
WASHINGTON - JULY 23: U.S. President Barack Obama (R) meets with Speaker of the House John Boehner (R-OH) (L) in the Cabinet Room of the White House. Yesterday Boehner walked left debt negotiation talks with the Obama Administration, but accepted an invitation to meet with Obama, Senate Majority Leader Harry Reid (D-NV), Senate Republican Leader Mitch McConnell (R-AZ) and House Democratic Leader Nancy Pelosi (D-MD) today. (Photo by Kristoffer Tripplaar-Pool/Getty Images) Boehner here says if I cut entitlements, he'll think about giving me some magic beans someday.
Last summer, President Obama desperately attempted to forge a long-term deficit reduction deal with Congressional Republicans. The notion that he could get the House GOP to accept any remotely balanced agreement was preposterous and doomed from the start, but Obama responded to the increasingly obvious reality by reducing his demands of the Republicans to virtually nothing.
The Washington Post has a long narrative report about the negotiations between Obama and the House Republicans. The narrative frame of the Post’s account is that Obama blew the potential deal at the last minute. That’s a story that people close to Obama’s fired chief of staff, Bill Daley, have been peddling for a long time. But that conclusion is utterly belied by the facts in the Post’s own account. But let’s put that aside for now, because the facts in the Post’s account support a different and far more disturbing conclusion: Obama was even more desperate to cut a deal than previously believed — dangerously desperate, in fact.
It has previously been reported that Obama had offered to John Boehner to make a series of cuts to Medicare, Social Security, and the domestic budget, to reduce top-end tax rates, and to prevent the expiration of the Bush tax cuts, in return for increasing tax revenue (over current tax levels) by about $800 billion over ten years. That is a pitiful sum of new revenue, less than half as much as recommended by deficit proposals by Bowles-Simpson, the Bipartisan Policy Center, and other bipartisan worthies. The blockbuster fact in the Post’s report, which the story does not in any way grapple with, is that even the $800 billion in tax revenue offered by Boehner was not, in fact, $800 billion in tax revenue:
In Boehner’s offer Friday night, the taxes came with strings attached. The Republicans wanted Obama to give up plans to raise the tax rate paid by the wealthiest Americans, now set at 35 percent. Instead, they wanted that rate to go down. They also wanted to preserve low rates for investment income — one of the biggest perks for the wealthy in the tax code — and establish a blanket exemption from U.S. taxes for corporate profits earned overseas.(More here.)
Another key caveat: Much of the $800 billion would have to come from overhauling the tax code — not from higher tax rates. The Republicans believed lower rates and a simpler code would generate new revenue by discouraging cheating and spurring economic growth. If the White House would agree to count that money, the Republican leaders said, then they might have a deal.
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