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Obama On Lessons Learned: I Should Have Started With No Tax Cuts And Let GOP Take Credit For Them

At tonight’s White House press conference, NPR’s Mara Liasson asked President Obama what lessons he has learned through the process of negotiating with Republicans over the economic recovery package. Obama explained there’s a lot of people who “sort of want to test the limits of what they can get.”

Reflecting further, Obama reminded the journalists present that the conservatives had originally expressed their approval of Obama’s plan to offer over $300 billion in tax cuts. But over time, they decided not to negotiate in good faith:

They were pleasantly surprised and complimentary about the tax cut that were presented in that framework. Those tax cuts are still in there. I mean, I suppose what I could have done is started off with no tax cuts, knowing that I was going to want some and then let them take credit for all of them. And maybe that’s the lesson I learned.

He added, “People have to break out of some of the ideological rigidity and gridlock that we’ve been carrying around for too long.”

Obama went on rip Republicans who now lecture about the need for fiscal responsibility. “It’s a little hard for me to take criticism from folks about this recovery package after they presided over a doubling of the national debt,” he said. “I’m not sure they have a lot of credibility when it comes to fiscal responsibility.” Watch it:

In early January, when Obama unveiled his recovery plan, ThinkProgress’ Matt Yglesias warned of the problem with starting off the stimulus negotiation with a healthy amount of tax cuts. “It’s one thing to unveil a compromise as a result of a bipartisan negotiation, and another thing to unveil an opening bid that you say you hope conservatives can get on board with,” he wrote.

Yglesias

Obama Presser

I don’t have a great deal to say about this. Obama seems broadly sensible. It also strikes me that a lot of America’s high-powered political journalists seem, at least as evidenced by the questions they ask, to have a very poor grasp of macroeconomic issues. Which would be fine, except that in the guise of writing about politics they’re actually writing about macroeconomic policy issues.

Also it was nice to see the President of the United States call on Sam Stein. He had a good question (about prosecutions or a truth and reconciliation commission for Bush era crimes) and Obama had an okay answer, not ruling out such an effort.

Politics

Porn star to challenge Vitter for U.S. Senate.

stormy.jpgCNN reports that adult film star Stormy Daniels may be considering a Senate run against Sen. David Vitter (R-LA). Vitter, who was involved in the D.C. Madam prostitution ring, prides himself as being conservative on social issues. When asked about a possible senate run against Vitter, Daniels took a swipe at Vitter:

I don’t see how I can possibly embarrass him more than he already embarrassed himself…Honestly, I’m not sure I’m willing to take the pay cut that comes with being a senator.”

This year, an ad appeared on Craigslist seeking “a female in some aspect of the adult-entertainment industry” to run against Vitter, reports Max Blumenthal.

- Michael Wilson

Yglesias

The Case Against New Banks

I’d been intrigued by the Paul Romer proposal to use taxpayer funds to set up new banks rather than muck around with the old ones, but I think Felix Salmon’s rejoinder is convincing. So I’m back to the view that we need to nationalize, clean up, and then recapitalize our insolvent banks.

It appears, however, that the Obama administration is not going to go in that direction. The good news about what they seem to be considering is that it will give us a lot of chances to use the cool phrase “zombie bank.” The bad news is that it poses substantial risks that the economy will be devoured by zombie banks.

Yglesias

Deregulation I Can Believe In

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Here’s a sad-but-typical tale of life in the big city:

The owners of Columbia Heights Coffee, located on 11th Street between Park and Monroe, informed me this weekend that they will not be expanding after all. I feel really bad for them because they told me they had paid two years rent for nothing. It seems that the permitting process was just way too cumbersome. Oh well, at least the original spot will remain. For those curious the for rent sign says $1K per month.

I’m someone who believes that regulation is necessary in a variety of fields to protect public health, public safety, the environment, etc. But it’s unquestionably my experience that the volume of regulation on retail establishments—especially in urban areas—is completely beyond any reason. A city has a strong interest in making it possible for people to open businesses. Huge numbers of DC neighborhoods, including Columbia Heights, are plagued with a bizarre situation in which existing establishments are unpleasantly crowded and yet there are plenty of vacant storefronts. Life would be much better if those storefronts were filled with shops, cafes, bars, and restaurants offering people some goods and services.

Politics

Limbaugh Opposes Health IT Provisions, Fears His Medical Records Might Become Public

As the Senate prepares to vote on its paired down version of the recovery package, Rush Limbaugh is still inventing reasons to oppose its passage. Today on his radio show, Limbaugh zeroed in on a $20 billion portion of the bill devoted to increasing the use of health care IT. Limbaugh warned, “Your medical treatments will be tracked electronically by a federal system” and declared that this and similar health care provisions have “nothing to do with stimulus but have everything to do with advancing the liberal agenda”:

LIMBAUGH: Your medical treatments will be tracked electronically by a federal system. Now there are arguments back and forth about whether or not this is a good thing. The opportunity for the loss of privacy is huge here by digitizing and making everybody’s health care records computerized. Especially having a major federal database where everybody’s health records are.

To illustrate his flawed argument about the “loss of privacy,” Limbaugh noted today’s revelations that Alex Rodriquez used performance enhancing drugs in the early part of this decade. “[A]sk Alex Rodriguez about privacy,” he remarked. Watch it:

Limbaugh can rest assured that his drug records (that have already been disclosed) and Americans’ health care records will be protected by “stringent privacy and security controls” even if they are digitized. In fact, President Bush’s former Coordinator for Health IT, Dr. David Brailer, explained that he is even concerned that “the House bill [goes] so overboard on privacy that it may inhibit the flow of information.”

In addition, Limbaugh is wrong to suggest that the recovery package would create a “major federal database” of every citizen’s health records. Rather, most summaries of the legislation explain that physicians will be offered financial incentives in the form of direct grants and increased Medicare reimbursement rates for adopting “certified electronic health records” and proving that they utilize them “effectively.” Indeed, while the government will be subsidizing the creation of this “nationwide system to exchange health data electronically” — it will not be running it.

Finally, Limbaugh’s claim that investment in health care has “nothing to do with stimulus” — a common right-wing canard — is false. The funding related to health care IT alone is projected to create over 200,000 jobs. As Igor Volsky recently noted, “Investing in Health IT not only saves money, creates jobs and reduces medical errors, but it also helps primary care physicians afford the infrastructure for expansion.”

Yglesias

Tax Simplification and the Flat Tax

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Chris Edwards has an op-ed in The Washington Post pivoting off the tax problems of some prominent Democrats to argue for major tax reform. Since I knew Edwards was a flat tax proponent, I knew he was going to wind up touting the flat tax as the solution. And I was all prepared to fire back with a blog post making the point that what makes the tax code complicated isn’t its non-flat, progressive nature but it’s very complicated definition of the tax base. But he winds up conceding that point in the course of the argument:

The solution to all these problems — from the Enron debacle to Obama’s tax-troubled nominees — is to reform the tax code. With a simple and consistent base, taxpayers would know what they owe, and the IRS could easily enforce it. That is the promise of the “flat tax,” which would tax all income once and create a level playing field with no tax-free loopholes. The notion of a flat tax debuted three decades ago and was initially championed by Democrats such as Obama’s pick for CIA director, former congressman Leon Panetta. The flat tax later became a Republican cause, but there is no reason why Democrats couldn’t rediscover their tax-reform roots. In fact, this nomination season would appear to give them ample reason to do so. [...]

In the past, flat-tax lovers and haters have clashed over the desirability of a single rate. But it is the simple base of the flat tax that is really revolutionary. The simple base — free of exemptions, deductions and credits — would vanquish the 1040 instruction book, which has swollen from 112 to 161 pages in just the past 10 years and keeps on growing.

Well there we go then! But at this point, I’m not even sure what we’re disagreeing about. Liberals aren’t hostile to the idea of expanding the tax base and lowering tax rates. But expanding the base and lowering the rates isn’t what a flat tax is. A flat tax is about reducing the number of tax brackets. That’s what progressives don’t like, and it has nothing to do with the complexity of the tax code.

Politics

Senate votes to end debate on economic recovery package.

The Senate voted 61-36 just moments ago to pass a cloture motion on the economy recovery package, thus ending debate on the bill and moving to a vote on final passage. The motion received just one more than the 60 votes needed. Three Republicans — Sens. Susan Collins (ME), Olympia Snowe (ME), and Arlen Specter (PA) — voted with the Democrats.

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The final up-or-down vote on the bill is expected to occur at noon tomorrow.

Update

Sen. Ted Kennedy (D-MA) returned to the Senate to vote on the bill. Kennedy told reporters outside the Capitol that, in his own words, “It’s time that we take action now.”

Politics

After discussing sexism toward women journalists, Kurtz asks Couric about her ‘new hairstyle.’

Yesterday on CNN, media reporter Howie Kurtz and CBS Evening News’s Katie Couric discussed the criticism Couric has received as the first woman to anchor a network news program. “I’ve always had enough confidence in my abilities and my work to know that sometimes there are larger issues at work here about the role of women in society,” Couric said, adding, “I always sort of feel bad for them, that this is how they spend their time.” Yet somewhat ironically, Kurtz then asked Couric if her new hairstyle has something to do with her most recent successes:

KURTZ: We’re going to put up some pictures of you over the years, and I’m going to ask you whether you think at all a factor in your recent success could be this new hairstyle.

COURIC: I don’t know. You know, you should ask Charlie Gibson about how he’s changed his part a little bit, or how Brian looks more tan on the air. I really don’t know, Howie.

The ensuing photo montage Kurtz aired contained one photo of Couric while pregnant. Watch it:

Yglesias

Are State Aid-Hating “Centrists” Trying to Sabotage Their Governors?

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Ed Kilgore reads an Arlen Specter op-ed and develops a hypothesis that might do something to explain how it is that the Senate “centrists” zeroed-in on the most-effective element of the stimulus package for elimination: “A cynic might observe that all of the four senators that Arlen Specter identifies as the organizers of the ‘centrist’ coup-by-amendment–himself, Ben Nelson, Susan Collins and Joe Lieberman–happen to come from states where the governor is of the other party.” Ed’s no cynic, I guess, but I am and I think this is important. I suppose it might be too cynical to suppose that the Gang of Four is deliberately trying to sabotage their states’ opposite-party governors. But at a minimum, you have to think that if there were political allies sitting in the relevant governor’s mansions that these legislators might have taken their calls and listened to good sense.

Either way, the tragedy is that unless the conference committee reverses these cuts we’ll all be paying the price—not just the governors or the residents of those four states.

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