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There are basically two ways to reduce a deficit: the government can bring in more money or spend less money. Historically, every deal ever struck in Washington has offered some combination of the two.
Republicans have been cagey lately about how they define “tax increase,” but they’ve said repeatedly that they want a massive debt-reduction plan in place that deals exclusively with one side of the budget ledger. This morning, two leading Democrats said if there’s going to be a deal, it’s going to have to need at least some balance.
As Sen. Chuck Schumer (D-N.Y.) told reporters this morning, “There needs to be revenues in any deal.”
What kind of revenues? The Democratic plan appears to be taking shape.
Democrats want to close tax loopholes that benefit oil companies, and eliminate a tax preference that gives corporate aircraft a friendlier depreciation schedule than commercial aircraft. Additionally, Van Hollen said, Democrats were proposing to phase out tax deductions and certain credits for people making more than $500,000 a year. These would be paired with a reduction in the tax burden on lower earners, by eliminating existing limitations on their deductions.
“Folks with over $500,000, we’re going to phase out your deductions and some of your tax credit,” Van Hollen said.
Republicans balked.
“The message Republicans sent was…unless we accept their lopsided approach…they’re prepared to tank the economy,” Van Hollen said.
Republicans have to hope the debate over details doesn’t reach the public, because the Democratic approach would likely be pretty popular.
But I just want to emphasize again that the Republican approach, on multiple levels, is like nothing we’ve ever seen. Not only has a major party never threatened to crash the economy on purpose as part of debt talks, but no debt-reduction plan has ever categorically ruled out additional revenue.
Indeed, the whole point of bipartisan talks is to find a balance — have some more money coming in, less money going out, and arguing over the ratio. Republicans are saying, in all seriousness, that this balanced approach, embraced by policymakers on both sides for generations, is somehow a radical new extreme.
Their argument is so absurd, the fact that they’re not simply laughed out of the room is itself rather remarkable.
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Holmes on June 24, 2011 1:32 PM:
Why aren't Dems asking for more? What are they giving up in exchange?
If Dems agree to any cuts in Medicare, they are the stupidest people on the planet.
c u n d gulag on June 24, 2011 1:35 PM:
"Their argument is so absurd, the fact that they’re not simply laughed out of the room is itself rather remarkable."
And who's going to laugh at them?
The Democrats?
The Blue Dogs are all for this.
The MSM?
They swallow Republican BS like it's delicious chocolate that'll make them shit out diamond encrusted gold bricks.
Only Liberals.
And we're too busy crying, to laugh...
OK, CAPTCHA, what do I do with Chinese or Japanese letters? Do YOU know the difference, CAPTCHA?
Don't CAPTCHA it, KILL IT!!!
cwolf on June 24, 2011 1:46 PM:
Someone - Somewhere - is sharpening a Guillotine Blade for these Republicrats.
Wealthy fuckers, Beware.
Steve LaBonne on June 24, 2011 1:50 PM:
The Dems are full of shit as usual. All they had to do was NOTHING- i.e. let all of the Bush tax cuts expire- and the fiscal picture would be looking so much better that there would be far less opportunity for the right to practice disaster capitalism. Think about it- doing nothing is all they're good at, but when it really mattered they couldn't even manage that.
Losers on June 24, 2011 2:06 PM:
"Republicans have to hope the debate over details doesn’t reach the public, because the Democratic approach would likely be pretty popular."
No danger of this getting out. Liberal media and all that...
:-P
Ladyhawke on June 24, 2011 2:07 PM:
REPUBLICANS WOULD RATHER DESTROY THE ECONOMY THAN RAISE TAXES:
-----------------------Excerpt----------------------
There are basic accounting principles that every family follows to sustain a balance between solvency, extreme debt, and starving to death. When expenses exceed income, sane individuals realize they must either reduce spending or increase revenue to avoid experiencing extreme debt, and eventually bankruptcy. The smartest approach is one where expenses are reduced and income is increased to maintain a standard of living that is neither too extravagant nor too austere, and most Americans use a balanced approach. After ten years of Republican out-of-control spending on two unnecessary wars, an unfunded Medicare prescription program, and unfunded tax cuts for the wealthy and corporations, the nation must come to terms with solving a Republican-made deficit that is choking the life out of the country�s fiscal health.
From the start of the 112th Congress, Republicans have opted to cut spending in order to maintain tax breaks for the wealthy and corporations and refused to consider any means of increasing revenue to address the staggering national debt. If any American family followed the Republican fiscal model, they would have suffocating debt, bankruptcy, and end up living on the street. The Republicans in Congress are on pace to bankrupt the country, and in effect, put America�s standing in the same category as most third world countries where 98% of the population live in abject poverty so the wealthy can continue living in opulence. The Republicans have assailed Democrats and the president for suggesting that increasing revenue through tax increases on the wealthy and corporations is part of a balanced approach to solving America�s debt crisis that Republicans caused.
------------------------------------------------------
http://www.politicususa.com/en/debt-ceiling-taxes
slappy magoo on June 24, 2011 2:10 PM:
At this point, even total capitulation to the GOP demands would be deemed as insufficient to the GOP, they would then just demand more and accuse the Democrats of being obstinate and unwilling to compromise and it's all Obama's fault.
They want the economy to fail. Blaming Obama for everything worked in 2010, so they're doubling down. It's no way to run a country, but they think it's a dandy way to win elections. And no one is willing enough or wanting enough to stop them.
Josef K on June 24, 2011 2:10 PM:
From the office of the Speaker of the House:
The president and his party may want a debt limit increase that includes tax hikes, but such a proposal cannot pass the House. The president and his party may want a debt limit increase without spending cuts that exceed the amount of the debt limit hike, but such a proposal cannot pass the House. The president and his party may want a debt limit increase without budget reforms that will restrict Washington's ability to spend in the future, but such a proposal cannot pass the House.
These are the realities of the situation. If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests.
Well, its good for a chuckle or two.
Stephen Stralka on June 24, 2011 2:27 PM:
I'm not even sure if this qualifies as optimism or pessimism, but I don't see how Obama, or the Democrats generally, can cave here. The Republicans basically have yet to propose anything that isn't just as ruinous as not raising the debt ceiling, so what's the point of making a deal? The Republicans are determined to make this somebody's Waterloo, so the Democrats better make sure it isn't theirs.
zeitgeist on June 24, 2011 2:43 PM:
the Dems are screwing this up by continuing to try. Look, Cantor bailing was the perfect opportunity to put a stop to this and switch modes from "demanding" things to spinning them.
It isn't rocket science:
"Regrettably, the Republican's point person on economic issues, Rep. Cantor, today simply walked out on the American people, quitting on talks aimed at a bipartisan agreement to raise the nation's debt ceiling and avoid a worse recession. Despite Democratic concessions on dozens of cuts, the Republicans refuse to take yes for an answer; they refuse to meet us anywhere near half-way; they refuse to put the interests of their country ahead of millionaires and special-issue advocates. We have said all along that the responsible, adult thing to do is to raise the debt ceiling on a clean bill, without all kinds of other issues. Even interests that usually support Republicans -- investment services, the US Chamber of Commerce, the Federal Resefve -- agree that is the best way to maintain confidence and certainty critical to our economic recovery. Today's walkout by Mr. Cantor means there is no time left for complicated discussions. We Democrats will be happy to return to the table to address those larger issues once the immediate crisis is past, and we are confident that we are on the side of most Americans when we call for a balanced approach to debt reduction that doesn't kill the recovery, that shares the sacrifice rather than protecting the richest bankers and corporate bosses, and that fully protects Medicare and Medicaid from Paul Ryan's Republican knife. But for now we must insist on an immediate clean bill to ensure the United States meets its obligations. It is the only remaining solution in the next 7 days."
if the stupid Dems give an inch on Medicare, its game over for the 2012 congressional elections. We throw our best issue, what won NY-26, down the drain.
Tom Allen on June 24, 2011 2:44 PM:
Of course, if you stimulated the economy by putting millions of people back to work, they'd pay taxes instead of using unemployment, as well as creating demand for more jobs. But that would require spending money to make even more money, which is too complicated an idea for most Senators or TV journalists to understand.
rob on June 24, 2011 2:45 PM:
When we were kids my older brother got accepted to a good private college and my parents really wanted him to go, for his own good and to increase the family's economic value. We were not poor but, there was not much we could 'cut' on the expense side-we had to pay rent and eat. So my parents looked to the revenue side of the budget and realised the answer would be to increase revenue. My mother got a job.
The President and the Democrats in the Congress THIS TIME SHOULD NOT-CAN NOT-COMPROMISE. THEY SHOULD CALL THE REPUBLICANS' BLUFF AND START MAKING THE 30 SECOND ADS TO BLAME ANY DISASTER ON THOSE WHO WILL HAVE CAUSED IT.
Typical Purist Liberal Asshole on June 24, 2011 2:47 PM:
Dont worry, as usual the spineless limpdick chickenshit coward Democratic party losers will cower in fear at the prospect of the wingnut assholes calling them names, and they'll quickly apologize to the republicans while handing over all their lunch money begging for forgiveness.
Fucking useless pathetic cowards, the Democrats. They just cannot wait to take the other side in ever argument. No balls, no spine, just mealy mouth impotence.
tomb on June 24, 2011 2:50 PM:
Sounds like the Republicans to shut down the economy for the sake of low taxes on millionaires.
Why can't that message be hammered again and again? What's wrong with these Democrats?
Steve LaBonne on June 24, 2011 2:53 PM:
They answer to the same millionaires.
Ron Mexico on June 24, 2011 2:56 PM:
If you define pragmatism as "only voting on bills that can become law," negotiations like this make sense. If you define pragmatism as "making good policy," these kind of negotiations have been the defining feature of the Obama presidency: the manufacture of lemons from lemonade.
I'm an idiot, and yet it occurs to me that Harry Reid could do the following: pass a clean debt-limit bill through the Senate, throw it at the House. When Boehner says we need deficit reduction, say, we'll let you take the lead on that when you look at the next federal budget, since the Constitution requires appropriations to pass the House first.
Goldilocks on June 24, 2011 2:57 PM:
Right on @Holmes - Why aren't Dems asking for more?
$600 billion to offset $2 trillion? How pathetic.
They can ask for $2 trillion tax revenue over ten years. What can the Republicans do? Walk away and vote against raising the debt ceiling? Politically that would be the suicide they appear to have pledged to their Lord and Master Mr Norquist.
MikeBoyScout on June 24, 2011 3:05 PM:
Let's be clear. The vast majority of Republican federal legislators are bad actors. As a caucus the Republican legislators are bad actors.
For the nation and the Democratic party this needs to be acknowledged by the Democratic leadership, and a more effective strategy and parliamentarian tactics need to utilized to show this the the nation's voters.
For example, the House Dems need to start voting 'present' more frequently.
If the House Republicans want to commit treason and bring the nation's and the world economy to a grinding halt and inflict pain and suffering, then that's the consequence of the voters' decision.
Tom Glover (BigSkyDem) on June 24, 2011 4:11 PM:
Nutty Cuts Inc wants Democrats to cut pensions, health care & expand prisons. Force Democrats to institutionalize austerity for "greedy" poor. Democrats are supposed to take the blame for defaulting on debts and yet provide oil subsidies and tax cuts for rich.
There's also a convenient scam foisted on nations' vegetable & fruit farms by arresting exploited and undocumented workers. Democrats are supposed to ignore WalMart women employees. While Dewey, Cheatum and Howe corrupt the Supreme Court. Can Democrats do enough for Republicans who want this for their re-election in 2012? Of course not.
Zorro on June 24, 2011 4:23 PM:
Their argument is so absurd, the fact that they’re not simply laughed out of the room is easily explained by the fact that the average voter has the intelligence of a box full of rocks with a child-proof cap. In shrink wrap.
Fixed that.
-Z
JackD on June 24, 2011 4:49 PM:
Maybe it's time for the Attorney General to issue a statement pronouncing the debt ceiling legislation unconstitutional under the 14th Amendment and the President to then announce that there will be no defaults in U.S. debt because of the provisions of the 14th Amendment and that all Bush tax cuts will be allowed to expire as scheduled thus eliminating the deficit. As they say over on Dailykos, doing nothing solves the problem.
zandru on June 24, 2011 5:01 PM:
Ron Mexico suggests "Harry Reid could do the following: pass"
No point in going any further. Harry Reid cannot possibly "pass" anything. He needs both a majority Senate vote AND sixty votes to permit him to hold that vote in the first place.
Reid does not have enough Democrats to break a Republican filibuster. Some of the Democrats he has are blue dogs, that is, Republicans with a D after their names, who will basically NEVER vote Democratic. This was true even when Democrats held the much-vaunted "filibuster-proof" majority.
No, Ron, you're not an "idiot" - but it's absolutely critical to understand how things work, in order to make reasonable suggestions. For example, suppose you told your teenage offspring to mow the lawn, and he responded that he would start up the mower and just let it "rhoomba" the back yard. After that was done, he'd move the mower to the front yard. No sweat, and he could continue with his gaming while the mowing proceeded.
Unless the kid was some kind of roboticist genius, you'd probably tell him that the lawnmower doesn't work that way, and to get off his, er, couch and to work.
In this case, it's back to the drawing board for you...
zandru on June 24, 2011 5:14 PM:
@zeitgeist: That's really good. Excellent. Lots of excellent sound bytes, too. I'm forwarding it, with credit to your handle, to my state's three representatives & two senators, plus Nancy Pelosi and Harry Reid.
They seem to have great difficulty in putting words together themselves. The Democrats need better writers.
A Word in Defense of the CAPTCHAs
Only one word is checked. The other is from some scanned-in manuscript that's being digitized, often by some public project. These scanned-in words were not recognized on the automated OCR scan of the document, and rather than assigning a pair of human eyes to figure it out, they farm out these words to literally thousands of human eyes. The consensus interpretation (if one can be obtained) is what's used for the original document.
Perhaps you hate being "used" to help information be more available by being put into digital form, where it can be searched, presented with different mark-up, "read" audibly to the visually impaired, translated into other languages, and otherwise automatically handled. After all, it takes you A FEW EXTRA SECONDS.
But maybe you were just unaware that the CAPTCHA served a useful public purpose besides keeping out the robo-trolls.
Moreover, it's often good for a laugh: "alsolls purchased" - but at what cost?!
Danny on June 24, 2011 6:27 PM:
And there we go. Netroots have been prejudging the outcome of these negotiations for months. The democrats, the president are letting the republicans walk all over them; Obama is a pushover, etc, etc.
I wrote weeks ago here that democrats are running out the clock on the repubs while playing the very same game that the republicans did on the PPACA - keeping an outwards appearance of being reasonable. That doesnt equal being a pushover in behind closed doors.
And now we get the new: dems have been pushing for revenue all along and the republicans are in disarray.
My guess is still that they're going for navigating the republicans to a deal on long term deficit reduction that includes increased revenue and doesnt hurt the economy short term. The clock is not working for republicans, it's working for us. Progressives need to learn to have just a little bit of faith and f-cking chill.
ameshall on June 24, 2011 10:56 PM:
"Republicans have to hope the debate over details doesn�t reach the public."
The Republicans don't have to rely on hope. They can take it the bank. The Democrats can't message to save their lives.