With the realities of the elections starting to sink in, I am shedding the emotional baggage of defeat. I am going to give the President some much needed advice, which is to stop listening to the Looney Left and the even Loonier Right!
The President has to understand that the Republicans will not give an inch on any truly progressive program by itself, so he is reduced to either caving in to every political demand the Republicans have or taking a strong Center Left position on cutting the debt and "ELIMINATING" the deficit.
The President also understands that the election was a rebuke of what he has done (or not done) up to this point in his presidency. We can argue all day whether he was Progressive enough or too progressive. Wheteher we like it or not, the reality is that we lost Independents a very, very important part of the Democratic coalition
Yes eliminating the deficits! But doing so in a way the preserves some of the more progressive spending programs, ensuring the viability od Social Security, and holding down the costs of Medicare, Medicaid, and health costs in general.
The president has to, I'm afraid chuck all of the demogoguing from the Left and Right and put a plan together that eliminates deficits.
How?
- The President could go all in on Martin Feldstein's column a few days ago. Mr Feldstein says that byeliminating Tax Expenditures for all income classes, this will save about a trillion per year.
- Keep all of the Bush Tax cuts for 2 years but make permanent the tax cuts for those making under $1 million year. Polling shows that Americans do not think millionaires should get tax breaks. However the economy is too fragile at this time to let them rise for any income group. This will save another $700 billion.
- Cut rates on the middle class to 8% for those making less than $250k/year.
- 2 year tax holiday on payroll taxes for businesses to spur economic growth.
- Treat Capital Gains from certain investment activities as income. Specifically, Hedge Fund Managers and Investors who make more than $1 million in gains from investment activities. These are clearly pass through entities and should be treated like any other business.
- Government Run Public Option and simultaneously eliminating Medicare. The thinking that all current Medicare recipients would be move to the new government run Public option. The savings by not running two systems will help offset some of the costs to transistion, with longer term savings realized in the out years.
- Change the way Social Security benefits ares distributed. Implement a system to determine how much of a persons wages contributed to the fund and pay them accordingly. For example the current cap is ~$106k any income after that is not subject to the FICA tax. If person A has an average lifetime income of $106k or below then they would get 100% of SS benefits. However if the the average income is say $300k then they would only get $106/$300k or 35% of SS benefits. So everyone would still get something, but it would be more in line with what "percentage" of their income they contributed over thgeir lifetime.
By adopting some Republican and Centrist Democratic ideas, while weaving in some Progressive ideas, the President can short circuit a lot of the Republican spin machine. It's a bit Clintonian, but I think its worth the gamble and it makes sense.
The President with this plan, has a strong case, for strong medicine, and a strong cure. We can have the saftey net but we have to pay for it honestly. We can have tax cuts for the middle class, but we have to stop giving away tax dollars to the rich.
Special interest would howl, but the President would have a far stronger hand to play from than he does now.
Breaking the !President's Debt Commissions new report