September 19, 2011

The $1.5 Trillion Tax Hike

The Presidents Plan For A Massive Tax Hike Is A Blueprint For Pleasing His Base Filled With Previously Rejected Proposals
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President Barack Obama Will Lay Out A Plan On Monday To Cut The U.S. Deficit, Striking A Populist Tone Aimed At Galvanizing His Democratic Party Base Ahead Of The November 2012 Election. (Alister Bull, Obama Deficit Plan Aimed At Democratic Base, Reuters, 9/19/11) PRESIDENT OBAMA WILL LAY OUT HIS VISION FOR BASE-PLEASING TAX HIKES BUT NOT A SERIOUS PROPOSAL THAT CAN ACTUALLY PASS
White House Official: It Will Be His Vision Not A Legislative Compromised Being Crafted To Garner Some Number Of Votes In The House And The Senate. The White House also warned not to expect the president to offer up things that he had agreed to as compromises over the summer when he and Boehner were striving for a grand bargain. It will be his vision, explained the official. Because it is a vision and not a legislative compromise being crafted to garner some number of votes in the House and the Senate, it is inherently different from the grand bargain he was working on with the speaker. (George E.
Condon Jr., Obama Proposing $1.5 Trillion In New Taxes, National Journal, 9/18/11)

White House Communications Director Dan Pfeiffer Says The Plan Is The Presidents Vision, Not Legislative Negotiations. I would view this as the president's vision for how we achieve deficit reduction, which makes it inherently different than the sorts of legislative negotiations we were undertaking with the speaker over the summer, said the White House communications director, Dan Pfeiffer. (Jim Kuhnhenn, Obama To Propose $1.5 Trillion In New Tax Revenue, The Associated Press, 9/18/11) Obamas Vision Reads More Like A Blueprint For Shoring Up His Restless Democratic Base. Suffering an erosion of support from the broad coalition that elected him, Obama has crafted a plan that reads more like a blueprint for shoring up his restless Democratic base than a vehicle for reaching across the aisle in search of bipartisan compromise. (Carrie Budoff Brown and Jennifer Epstein, Barack Obama To Unveil $3 Trillion DeficitCutting Plan, Politico, 9/18/11)

Former White House Economist Jared Bernstein: These Things Are Critical To The Base. These things are critical to the base, said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and a former economic adviser to Vice President Joe Biden.
(Alister Bull, Obama Deficit Plan Aimed At Democratic Base, Reuters, 9/19/11)

Democratic Leadership Aide: Obamas Speech Is Not A Game-Changer. Its more of a boxchecker than a game-changer, one Democratic leadership aide said of Obamas speech when asked how it might affect the super committees work, adding that any influence the president
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would have on the group likely would come in concert with advice from Congressional leadership. (Meredith Shiner, Obama To Make $4 Trillion Pitch To Cut Deficit, Roll Call, 9/18/11)

Obamas Speech Will Be Heavy On Populist Principles

Obama Will Outline His Principles For Tax Reform. To that end, the president will outline five principles he will insist on in tax reform it should lower tax rates; it should cut wasteful loopholes and tax breaks; it should reduce the deficit by $1.5 trillion; it should boost job creation and growth; and it should be consistent with the Buffett rule in that everybody shares the burden. (George E. Condon Jr., Obama
Proposing $1.5 Trillion In New Taxes, National Journal, 9/18/11)

But Will Leave The Details To Congress. The president will not specify a specific rate or details of the Buffett Rule in announcing his proposal, leaving it to Congress to decide how to calculate such a rate as part of the larger debate over rewriting the tax code, the official said. (Jessica Yellin,
Obama To Propose New Tax Rate For Millionaires, CNN, 9/19/11)

The White House Acknowledges That They Will Not Score The Buffet Rule But Will Cite It As A Guiding Principle. Administration officials said Sunday night that they were not including any revenue from the Buffett Rule in Mr. Obamas overall $3 trillion proposal, adding that it was more of a guiding principle the president will adopt as budget negotiations with Congress advance. (Brian Knowlton And Jackie Calmes, Republicans Call Obamas Tax Plan Class Warfare, The New York Times, 9/18/11)

OBAMAS RECYCLED PROPOSALS IS HIS FOURTH ATTEMPT TO INJECT HIS REJECTED POLICIES INTO THE DEBATE OVER AMERICAS DEBT
White House Officials Acknowledge That Obamas Tax Proposals Will Look Familiar Because They Have Been Previously Proposed By Obama. The other $700 billion, the officials said, would come from other changes in tax law. Many of those measures, they acknowledged, will look very familiar because they have previously been proposed by Obama. (George E. Condon Jr., Obama Proposing $1.5 Trillion In New Taxes,
National Journal, 9/18/11)

The Plan Is Obamas Fourth Package Of Deficit Reduction Ideas This Year And Is Unlikely To Pass As Proposed. While some pieces of Mr. Obama's plan may be agreed upon, Congress is unlikely to pass the package as proposed given Republican resistance to tax increases. Instead the plan marks the White House's opening salvo in negotiations over the next two months on how to reduce the deficit. It is the president's fourth package of deficit-reduction ideas this year. (Carol Lee and Damian Paletta, New Obama Deficit
Plan, The Wall Street Journal, 9/19/11)

I Think This Is Less 'Let's Be The Grownups In The Room And Start At The 50 Yard Line,' And More 'Let's Start On Our Side Of The Field, Said Jared Bernstein, Former Economic Adviser To Vice President Joe Biden. (Carol Lee and Damian Paletta, New Obama Deficit Plan, The Wall Street Journal,
9/19/11)

On Capitol Hill, Its Unclear How Seriously Obamas Speech Will Be Received. On Capitol Hill, its unclear how seriously Obamas speech will be received. Even Congressional Democrats were not given much advance notice, and the super committees job of finding at least $1.2 trillion in savings is difficult enough without voices from the White House tipping the delicate balance Democrats and Republicans must strike to avoid serious across-the-board discretionary cuts. (Meredith Shiner, Obama To Make $4 Trillion Pitch To Cut
Deficit, Roll Call, 9/18/11)

Many Congressional Democrats Say There Is Little Chance They Will Be Able To Support The Bill As A Single Entity, Citing An Array Of Elements They Cannot Abide. President Obama anticipated Republican resistance to his jobs program, but he is now meeting increasing pushback from his own party. Many Congressional Democrats, smarting from the fallout over the 2009 stimulus bill, say
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there is little chance they will be able to support the bill as a single entity, citing an array of elements they cannot abide. (Jennifer Steinhauer, Some Democrats Are Balking At Obamas Jobs Bill, The New York Times, 9/14/11) The Nashua Telegraph: Nearly Two Years After The First Stimulus Failed The Presidents Response Is To Simply Offer More Of The Same. Americans were led to believe previous stimulus packages the official initial bailout of 2009 and the more discreet payouts layered in the 2010 budget deal would bring the unemployment rate to within a whisker of 8 percent. Nearly two years later, with the rate stuck at above 9 percent and no sign of improvement, the presidents response is to simply offer more of the same. (Editorial, Few Fresh Ideas In Obama Jobs Bill, The Nashua Telegraph, 9/18/11) Special Taxes For Millionaires Have Been Repeatedly Rejected In A Bit Of Political Salesmanship Obama Will Name The New Principle After Warren Buffett Who Insists The Wealthy Pay Lower Taxes Than Middle-Income Workers. Mr. Obama, in a bit of political salesmanship, plans to call his proposal the Buffett Rule, in a reference to Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers because investment gains are taxed at a lower rate than wages. (Brian Knowlton And Jackie Calmes, Republicans Call Obamas Tax Plan Class Warfare, The New York
Times, 9/18/11)

The Proposal Could Invite Scrutiny From Some Economists Who Have Disputed Mr. Buffetts Assertion That The Megarich Pay A Lower Tax Rate Over All. (Brian Knowlton And Jackie
Calmes, Republicans Call Obamas Tax Plan Class Warfare, The New York Times, 9/18/11)

Former Clinton OMB Director Alice Rivlin Said Of The Buffet Rule That The Way To Fix The Tax Code Is To Fix The Tax Code, Not To Add Another Complication At The Margin. (CNN,
State Of The Union, 9/18/11)

2009: Obama Endorsed A House Committee's Plan To Fund Part Of The New Program By Imposing A Surtax On Families Making Over $1 Million A Year (Josh Gerstein, President Obama Backs Millionaire's
Tax, Politico, 7/23/09)

2010: The Senate Defeated An Attempt To Create A Millionaires Tax Bracket. Senate lawmakers then defeated a separate attempt by a vote of 53-37 to raise the threshold for middle-class tax cuts to $1 million and then extend that tax level permanently. (Corey Boles, Obama Signals Openness To A Tax-Cut Deal, The Wall Street
Journal, 12/6/10)

Democrat Senators Durbin, Feingold, Harkin, Lieberman And Rockefeller Voted Against The Measure. (S.Amdt 4728 To HR 4853, Roll Call #259: Motion To Invoke Cloture Rejected, 53-37, D 53-4, R 0-32, I 1-1, 12/4/11; Durbin,
Feingold, Harkin, Lieberman And Rockefeller Voted Nay)

2011: In July, Sen. Ben Nelson (D-NE) And Sen. Mark Pryor (D-AR) Voted Against A Defeated Motion That Would Have Expressed The Sense Of The Senate That Millionaires Pay Higher Taxes As Part Of A Deal On Deficit Reduction. (S. 1323, Roll Call #108; Motion To Invoke Cloture Rejected, 51-49, D 49-2, R 0-47, I 2-0,
7/13/11,; Nelson And Pryor Voted Nay)

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