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Economy

Millionaires Tell Congress To Raise Their Taxes In Super Committee Deal

By Travis Waldron on Nov 17, 2011 at 9:20 am

With Republicans attempting to hold firm to their anti-tax platform, a group of millionaires advocating for higher taxes on the super rich visited Congress yesterday to urge super committee members and congressional leadership to reject any deal that doesn’t include such revenue increases.

The group, Patriotic Millionaires for Fiscal Strength, planned visits to six super committee members, Tea Party representatives, Democratic leadership, and conservative anti-tax maven Grover Norquist, the head of Americans for Tax Reform. Among the millionaires’ top priorities is persuading Congress to repeal the Bush tax cuts for the wealthy, which blew a hole in the nation’s budget and left the country with unsustainable levels of debt, CNN Money reports:

“We want to pay more taxes,” said California millionaire Doug Edwards, a former marketing director for Google. “If you’re fortunate, and you make more than a million dollars a year, you ought to pay more taxes.” [...]

“If the super committee bill doesn’t raise our taxes, we will ask our fellow citizens to consider killing the bill,” said Eric Schoenberg of Franklin Lakes, N.J., an adjunct professor of marketing at Columbia Business School.

Even as surveys have shown that millionaires support higher taxes on the rich, the GOP has remained opposed. The budget passed by the House earlier this year protected huge tax breaks for the wealthy even while gutting Medicaid and Medicare, and Republicans defended such tax cuts at town halls throughout the summer, even in the face of opposition from their constituents. Super committee co-chair Jeb Hensarling (R-TX) said the party will oppose a deal that includes “any penny” in tax increases, and even as a split emerges around the party’s staunch anti-tax advocacy, much of the party opposes raising taxes to help reduce the nation’s debt.

Instead of taxing those who can afford it, however, the GOP has unfortunately decided that the only tax increase it supports its one on the poorest Americans.

NEWS FLASH

Study: Restructuring Medicare’s Benefit Structure Would Increase Costs For Seniors | Several deficit reduction plans have proposed restructuring Medicare’s benefit design by combining the Medicare Part A and Part B deductibles (hospitals and doctors) that seniors currently pay separately and establishing a co-insurance requirement for all services up to an annual limit. A new study from the Kaiser Family Foundation modeled the effects of such proposals — a $550 deductible for Parts A and B, a 20 percent coinsurance on all services up to a $5,500 annual limit — “nearly three-fourths (71 percent) of the 41 million beneficiaries in the fee-for-service Medicare program would have higher out-of-pocket spending,” “5 percent would have lower out-of-pocket spending, and 24 percent would have a nominal or no change in spending.”

Health

GOP Super Committee Co-Chair Hits Democrats For Failing To Negotiate On Medicare Privatization

By Igor Volsky on Nov 16, 2011 at 1:45 pm

As the super committee struggles to secure a deal ahead of its Nov. 23 deadline, Republicans have begun blaming Democrats for failing to conform to their spending and revenue requirements. This morning, committee co-chair Rep. Jeb Hensarling (R-TX) appeared on Fox News to fault Democrats for failing to embrace a Medicare reform plan that would partially privatize the program for future enrollees:

HENSARLING: Republicans have gone a great way in trying to negotiate here. We put forth a plan that would actually save and strengthen Medicare. They rejected our plan that was in our budget, so we said fine — if you don’t like that plan, how about something called Rivlin/Domenici, which is a bipartisan plan written principally by Bill Clinton’s former head of the Office of Management and Budget. We can negotiate around that. They rejected that too.

Watch it:

Switching one privatization plan for another is not much of a concession, particularly since the “compromise” plan would still force seniors to pay more for benefits and jeopardize one of the most efficient and popular health care programs in the country.

While the Medicare scheme contained in Paul Ryan’s budget would have forced tomorrow’s seniors to choose a private plan from an exchange of private plans and provided seniors with “premium support” that significantly depreciated over time, the “compromise” proposal preserves the existing fee-for-service Medicare program as an option and offers seniors a “premium support” that does more to keep up with actual health care spending. But seniors who choose to stay in the fee-for-service plan would still be stuck with a premium credit that did not keep up with health care spending and their costs would only increase as private plans cherry-pick the healthiest beneficiaries and leave sicker applicants to traditional Medicare. Ultimately, Rivlin/Domenici — like the Ryan plan before it — fails because it breaks up the market clout of traditional Medicare and sets the nation on an untested path of private competition that could do more to shift costs to seniors than limit overall health care spending. It moves the system closer to the Ryan ideal in which future Congresses could cut federal costs by eating away at the premium credit, thus pushing more health care costs on to the individual.

A better approach would be to take advantage of the bargaining clout of traditional Medicare and focus on modernizing the system through payment reform and delivery system changes, both those are precisely the kind of reforms that Republicans want to repeal in the Affordable Care Act.

NEWS FLASH

Group Of Millionaires Visits Washington To Tell Congress: ‘Tax Me’ | Two-dozen millionaires are coming to Capitol Hill today to urge Congress to raise taxes on millionaires as part of any debt deal. The group, Patriotic Millionaires for Fiscal Strength, is scheduled to appear before at the Congressional Progressive Caucus’ hearing on job creation this morning. After that, the group will visit the offices of all six supercommittee members, Democratic leaders, members of the Tea Party Caucus, and anti-tax advocate Grover Norquist.

NEWS FLASH

Over 3,000 Rally Against Cuts In Safety Net For Seniors | Amid growing calls for cuts to Social Security, Medicare, and Medicaid, seniors are pushing back. On Thursday, more than 3,000 protesters rallied at the Wang Theatre in downtown Boston to voice their opposition to cuts. Republicans and Democrats on the super committee, which includes Massachusetts Sen. John Kerry (D), have repeatedly floated cuts including changing the way Social Security cost-of-living adjustments are determined and increasing the Medicare eligibility age. “When you get older, you need help, not cuts” said protester Steve Ciardi.

– Karl Singer

By Guest Blogger on Nov 10, 2011 at 2:10 pm

NEWS FLASH

Democrats’ New Super Committee Proposal Includes $400 Billion In Medicare And Medicaid Cuts | Democrats on the Super Committee are offering a $2.3 trillion tax-and-cut proposal “that includes $400 billion in Medicare and Medicaid reductions,” but only if Republicans compromise by putting new tax revenues on the table, Politico reports. The plan includes $350 billion in savings from Medicare — $250 billion from providers and $100 billion from beneficiaries — and $50 billion from Medicaid. The proposal would also fix the so-called Sustainable Growth Rate (SGR) formula, which slashes reimbursements for doctors in the Medicare program, and “cut about $8 billion from the new health care law’s Prevention and Public Health Fund.” An earlier Democratic offer would have produced $475 billion in savings from Medicare and Medicaid, but was rejected by the GOP.

NEWS FLASH

Hospitals Urge Super Committee To Expand Comparative Effectiveness Research | “The American Hospital Association is urging the debt law’s super committee to embrace ‘real’ comparative effectiveness research that includes cost analysis as it searches for health care deficit cutters,” Inside Health Policy’s Sahil Kapur reports. “When we talk about ‘real’ comparative effectiveness research, we really support including cost-effectiveness of different treatment options,” the AHA official said. “We know that others don’t. But we think that information is one other component to determine what might be best for the needs of patients.” Doctors, device makers, and Republicans had repeatedly warned that considering “cost” in coverage recommendations would lead to European-style health care rationing and lawmakers omitted the measure from the health care law. Other groups believe that including cost could encourage innovation and lower health care spending.

Economy

GOP Offers Paltry ‘Concession’ In Fiscal Supercommittee Along With Huge Tax Cut For The Rich

By Pat Garofalo on Nov 8, 2011 at 6:15 pm

Republicans on the fiscal super committee — which is tasked with coming up with a $1.5 trillion deficit reduction package by the end of the month — today made an offer that is supposedly a “concession” on their part, agreeing to $300 billion in new revenue, when they had previously ruled any new revenue off the table:

Congressional Republicans have offered to increase tax revenue by nearly $300 billion over the next decade through an overhaul of the tax code, a significant concession aimed at breaking a long-standing impasse in negotiations over the federal debt.

The offer envisions a tax code rewrite that would lower rates for everyone while raising overall tax collections by $250 billion, mainly by limiting the value of itemized deductions such as write-offs for home mortgage interest, state and local taxes and other expenses.

As a symbol of how far this debate has shifted, over the summer Speaker of the House John Boehner proposed a plan that included $800 billion in new revenue. The GOP now wants to raise less than 0.2 percent of GDP in revenue, which is less than the Democrats have offered in Medicaid cuts.

Plus, there is a huge catch: in order to agree to raising revenue, Republicans want to not only make all of the Bush tax cuts permanent, but according to the Washington Post’s Greg Sargent, they also want to lower the top income tax rate from its current 35 percent to 28 percent:

The highest tax rate would be reduced from 35 percent to 28 percent under the emerging GOP tax code overhaul proposal, the senior Democratic aide tells me. And the reduction would actually be even bigger than this. After all, if the Bush tax cuts were allowed to expire, as they’re set to do, the high end rate would go up to at least 39 percent. In other words, the aide says, under the proposal Republicans are pushing, the drop down to 28 percent would be at least 10 percentage points from what it would be if the cuts are allowed to expire.

According to Center for American Progress Director for Tax and Budget Policy Michael Linden, the reduction in the top tax rate alone costs $670 billion, which exclusively benefits the wealthy. Meanwhile, limiting itemized deduction in the way that the GOP suggested to the Wall Street Journal’s Stephen Moore would, according to Linden, raise $560 billion from the wealthy. So the rich are still getting a tax cut.

The rest of the revenue that the GOP has to raise to net $300 billion, therefore, must come from middle- and low-income households. Let’s emphasize that again: the GOP’s big “concession” when it comes to deficit reduction is paltry amount of revenue that will come from many middle-class households, paired with a huge tax cut for the rich.

Simply put, the GOP’s plan is not a concession, but a joke meant to make them look reasonable as they continue to push for lowering tax rates on the most well-off Americans. As one Democrat said, “they either think we’re morons or desperate.”

Update

The Post has edited the lede of its story, which yesterday said that the Republican offer was a “significant concession” but now reads:

Congressional Republicans have for the first time retreated from their hard-line stance against new taxes, offering to raise federal tax collections by nearly $300 billion over the next decade as part of a plan to tame the national debt.

But Democrats rejected the offer Tuesday — along with the notion that Republicans had made a significant concession that could end the long-standing political impasse — leaving a special debt-reduction committee far from compromise with less than two weeks until its Thanksgiving deadline.

Climate Progress

Oil Lobby Launches Ads To Thank GOP Super Committee Members For Preserving Billions In Oil Subsidies

By Lee Fang on Nov 8, 2011 at 1:00 pm

The American Petroleum Institute, a umbrella lobbying group for the oil industry, has new ads out thanking GOP members of the super committee for preserving billions in oil subsidies. The ads, posted on the industry group’s YouTube page last night, thank GOP super committee members Sens. Rob Portman (OH) and Pat Toomey (PA) and Reps. Dave Camp (MI) and Fred Upton (MI), and for opposing efforts to eliminate wasteful taxpayer subsidies to oil companies. API, which represents ExxonMobil, Shell Oil, Chevron, and other major oil corporations, calls the attempt to cut the subsidies “new job-crushing energy taxes!” Watch a sample of the Orwellian ads below:

As NPR has reported, the oil industry is moving into hyperdrive to crush any attempt to get rid of its subsidies.

Meanwhile, the world’s largest oil companies recently posted quarterly profits of $24 billion.

Security

Conservatives Pushing End-Run Around Mandated Military Spending Cuts If Super Committee Fails

By Ali Gharib on Nov 8, 2011 at 12:41 pm

In reaction to the looming deadline on the super committee — potentially triggering $1.2 trillion in automatic spending cuts if the group fails to make a $1.5 trillion dent in the deficit by Thanksgiving — military spending boosters are devising a plan to avoid triggered cuts to defense budgets. Here’s how it would work: 1) Hope for the super committee to fail, 2) Push doomsday warnings about mandated defense “sequestration,” 3) Get Congress to pass a new law negating the automatic cuts.

In the plan, the “sequestration” — a fancy word for cuts — of $600 billion in military spending could be avoided. Speaking with Foreign Policy yesterday, a former top official in Donald Rumsfeld‘s Defense Department, Dov Zakheim, promoted the idea, outlining a GOP strategy in which failure of the super committee is preferable:

If there’s sequestration, Congress has a year to move out from under it. If the Super Committee actually strikes a deal [that includes some defense cuts], it will be exceedingly difficult to undo the deal.

The strategy is something Sen. John McCain (R-AZ) and other Republicans have been suggesting since the middle of last month. Yesterday, McCain, the ranking member of the Senate Armed Services Committee, reiterated the message:

The sequestration is not engraved on golden tablets. It is a notional aspiration. And those of us — and I think we’d have sufficient support to prevent those kind of cuts from being enacted because of the impact it would have on national security.

Watch the video:

Sen. Pat Toomey (R-PA) said there “would be bipartisan interest” in dodging the triggered cuts. While Senate Armed Services Chair Carl Levin (D-MI) called sequestration the “Sword of Damocles over everyone’s head,” he refused to comment on the possibility of negating the debt deal. One Democratic aide, however, described the potential GOP move as “giving up prematurely [on the super committee] and anticipating failure.”

If Congress did indeed produce new legislation nullifying parts of the Budget Control Act of August 2011 (the debt deal that created the super committee), Obama should veto it. By issuing a veto threat now, Obama could put pressure on the super committee to fulfill its mission and make the more than trillion dollars in deficit reduction.

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