President Obama has a winning hand and he knows it. He is not folding.
He should not and he will not. The ignorance and laziness of our right wing
media is stunning. Professor Krugman points out a few facts that must
get into the mainstream media.
Below the squiggle :
It appears as though President Obama will not accept any deal that does not include higher marginal tax rates on the $250,000+ income. And he should not. For a couple of reasons: one he won more votes than anyone else ever not named Barack Obama and he campaigned on this issue. Closing loopholes and limiting deductions without penalizing the middle class will not produce any serious new revenue. That is a canard. New tax revenue from the wealthy must include raising their marginal rates if it is to make any significant impact on the debt. And if there is progress made on the debt and deficit and the wealthy do not pay more, then it must, of necessity, come from the rest of us. President Obama realizes that this is incredibly unfair.
As Republicans are beginning to realize, marginal tax rates on the wealthy will go up. They cannot stop that from happening. However, the approaches to earned benefit reform that are being promoted will not help much in deficit reduction and will harm seniors and other vulnerable citizens a lot. Too little would be gained and too much pain would be inflicted for this to make any sense.
On the other hand, the idea of raising the age of Medicare eligibility gets very respectful treatment — now that’s serious.Professor Krugman again
So I thought I’d look at the dollars and cents — and even I am somewhat shocked. Those tax hikes would raise $1.6 trillion over the next decade; according to the CBO, raising the Medicare age would save $113 billion in federal funds over the next decade.
So, the non-serious proposal would reduce the deficit 14 times as much as the serious proposal.
I guess we have to understand the definition of serious: a proposal is only serious if it punishes the poor and the middle class.
I haven’t found a 10-year estimate of the Social Security indexing idea, but we can roll our own. The idea is to replace the CPI with a “chained” measure that typically rises about 0.3 percentage points less per year. Apply this to the CBO projections of Social Security spending under current policy and I get 10-year savings of $186 billion.I suggest that we contact The White House and make sure that they are aware of
So, if we take all of McConnell’s ideas together, we get a bit more than $300 billion. Getting this would, by the way, impose substantial hardship – seniors would be forced into inferior private insurance, and there are good reasons to believe that the true inflation rate facing seniors is actually higher, not lower, than the CPI. Still, what we’re looking at overall is a saving equal to only about one-fifth of what Obama is proposing to raise by higher taxes.
these numbers. I also suggest that we send out mass emails to news organizations and news people (e.g. Rachel Maddow) . If someone posts in a comment email addresses, I will copy them onto the diary.
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5:25 PM PT: So, just for some quick addition here: These two "reforms" themselves would only save about $30B a year - the federal budget is about $4T a year and the deficit is about $1T right now. This would be well less than 1% of our federal budget. And it would lower our federal budget deficit by only about 3%.
This is akin to firing Big Bird.