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    Default The "Bid Deal"

    NYT article.


    Obama Changes Tone, Pressures Both Parties on Budget Deal

    Spoiler Alert, click show to read: 

    By MICHAEL D. SHEAR



    Doug Mills/The New York TimesPresident Obama called on Democrats and Republicans to make concessions as he spoke to reporters at the White House on Monday about debt limit negotiations with Congress.

    12:57 p.m. | Updated President Obama on Monday morning challenged Republicans to live up to their demands to cut the nation’s deficit and address its long-term debt by enacting spending cuts, revenue increases and changes to entitlement programs.

    “Now is the time to deal with these issues,” Mr. Obama said at the start of a news conference at the White House. “If not now, when?”

    The president also called on Congressional Democrats to be open to a deal that would makes changes to entitlement programs like Social Security and Medicare, which some parts of the caucus have strictly opposed.

    Mr. Obama said he is continuing to push lawmakers for “as large a deal as possible” and said that Republicans should work toward the goal that they have said they wanted for months.

    “I’ve been hearing from my Republican friends for quite some time that it is a moral imperative to tackle our debt and our deficit,” Mr. Obama said. “What I’ve said to them is, ‘let’s go.’”

    Mr. Obama said he would not consider a short-term, stop-gap solution to raise the debt ceiling. “This is the United States of America. We don’t manage our affairs in three month increments.”

    The news conference, his second in less than two weeks, came just hours before the president was to meet for a third time with Congressional leaders in an effort to reach a deal to raise the nation’s debt ceiling. The decision to take questions from reporters again reflects a new approach to press relations in recent months, as the president seeks to use the bully pulpit in a way that Republicans cannot.

    Mr. Obama’s tone was a stark contrast to his previous press conference. In late June, Mr. Obama adopted a stern approach toward his Republican rivals, wagging his finger at them for failing to lead and mocking their frequent summertime breaks.

    But on Monday, after a series of face-to-face negotiations over the past week, the president described the Congressional leadership in more sympathetic ways. He called them “sincere” and said they are in a “difficult” position as they attempt to sell a compromise to their rank-and-file members.

    “Part of what the Republican Caucus generally needs to recognize is that American democracy works when people listen to each other; we’re willing to give each other the benefit of the doubt; we assume the patriotism and good intentions of the other side, and we’re willing to make some sensible compromises to solve big problems,” Mr. Obama said. “And I think that there are members of that caucus who haven’t fully arrived at that realization yet.”

    The president’s tone about his Democratic allies changed as well. Mr. Obama appeared eager to demonstrate that the speaker’s difficulties with conservatives was matched on his own side by his willingness to talk tough to his own liberal constituency.

    Politically, that gives Mr. Obama an opportunity to present himself to independent voters as a leader who is interested in getting something done in gridlocked Washington. He said he is “sympathetic” to the concerns of his liberal supporters but said their priorities cannot be achieved without tackling the nation’s debt.

    “If you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid and believes that it is part of what makes our country great, that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term,” he said.

    Answering questions, the president said he was eager to find a solution to the nation’s debt problem even if that means that both parties have to accept changes that they do not like.

    “It’s not going to get easier. It’s going to get harder,” Mr. Obama said. “So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now is the time to do it.

    He added that both parties need to “step up.”

    “Let’s do it,” he said. “I’m prepared to do it. I’m prepared to take on significant heat from my party to get something done.”

    Mr. Obama repeatedly praised Mr. Boehner for his willingness to consider a broader package to reduce the debt. But he said the political pressures on the House speaker were clearly affecting Mr. Boehner’s ability to cut a deal.

    “The leaders in the room at a certain point have to step up and do the right thing regardless of the voices in our parties,” he said. “It’s going to take some work on his side. But look, it’s also going to take some work on our side to get this done.”

    Mr. Obama rejected criticism by Republicans that his party was eager for “massive, job-killing tax cuts” that would harm the economic recovery. He noted that any tax increases would only go into effect after 2013.

    “No one is talking about raising taxes right now,” the president said. “I have bent over backwards to work with the Republicans that comes up with a formulation that doesn’t require them to vote sometime in the next month to increase taxes.”

    The president offered a critique of the political pressures in both parties that make it harder for lawmakers and the White House to reach a deal.

    Of the Republican presidential candidates who have said they oppose an increase in the debt ceiling, the president said: “For them to say we shouldn’t be raising the debt ceiling is irresponsible. They know better.”

    But he said the Tea Party movement has genuinely made it more difficult for Congressional leaders like Mr. Boehner to compromise.

    “The politics that swept him into the speakership were good for a midterm election. They are tough for governing,” Mr. Obama said. “American democracy works when people listen to each other, we are willing to give each other the benefit of the doubt, we assume the patriotism, good intentions of the other side, and we are willing to compromise.”

    House Speaker John A. Boehner said over the weekend that he would no longer try to achieve a large-scale deal involving as much as $4.5 trillion in spending cuts along with broad-based tax reform and changes to entitlement programs. Instead, Republican lawmakers are pushing for a scaled-back plan.
    But Mr. Obama on Monday continued to urge lawmakers to consider the larger approach. And he challenged Republicans to come back to the White House with a deal they think can pass in both chambers of Congress. That may be a challenge as both sides are far apart on the key components of a deal.

    Conservative Republicans in the House, led by Representative Eric Cantor of Virginia, the House majority leader, have balked at the notion of a deal that would increase revenue to the government, fearing they could be accused of going back on their pledge to oppose tax increases.

    Democrats, meanwhile, have expressed opposition to any deal negotiated by Mr. Obama that would cut benefits to Medicare or Social Security recipients.


    There are two things really to discuss at this point.

    1.) Should the deal for raising the debt cieling be the "Big Deal", i.e. the 10 year multi-trillion dollar deal. Or should it be be a smaller one that gets through the elections? Politically any deal makes the coming elections more difficult as both sides will end up looking like they have betrayed their base. Fiscally , however, a long term deal gets rid of tons of uncertainty, and I think allows for the possibility of reform of items that on their own would never get passed (SS, Medicare/Medicad, tax system etc.)

    2.) Is compromise even possible? It seems like if were up to Boehner and Obama something along the lines of a $4 Trillion deal with 3:1 cuts vs. revenue could be worked out. But I don't know if there are enough centrists that such a thing could be passed through the congress.
    Last edited by Sphere; July 11, 2011 at 02:39 PM.

  2. #2

    Default Re: The "Bid Deal"

    Republicans as usual blocking Obama's plans.
    Last edited by (s)AINT; July 11, 2011 at 02:57 PM. Reason: spelling >_<

  3. #3
    Big War Bird's Avatar Vicarius Provinciae
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    Default Re: The "Bid Deal"

    So long as the Big Deal is all spending cuts, I'll all ears. Start talking tax hikes then forget it.

    A 3 to 1 ratio is a fraud from the get go. Democrats have pulled that fast before. Ended up all tax hikes, no spending cuts.

    Social security and Medicare make the country great? They have made the country bankrupt.
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  4. #4

    Default Re: The "Bid Deal"

    So long as the Big Deal is all spending cuts, I'll all ears. Start talking tax hikes then forget it.

    A 3 to 1 ratio is a fraud from the get go. Democrats have pulled that fast before. Ended up all tax hikes, no spending cuts.
    What if marginal rates stay the same or even drop, but most tax expenditures are eliminated? It is fairly easy to get to $1 Trillion over 10 years doing that, as tax expenditures are currently at about $1 trillion a year.

  5. #5

    Default Re: The "Bid Deal"

    Quote Originally Posted by Sphere View Post
    What if marginal rates stay the same or even drop, but most tax expenditures are eliminated? It is fairly easy to get to $1 Trillion over 10 years doing that, as tax expenditures are currently at about $1 trillion a year.
    That's definitely the way to go (at least part of the way). The problem is that when you start talking eliminating tax expenditures then the Grover Norquists of the country immediately come out of the woodwork and start hollering that these are actually disguised tax increases and start beating GOPers over the head with their no new tax pledge.

    It's the smart thing to do so of course it won't happen.
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  6. #6
    Big War Bird's Avatar Vicarius Provinciae
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    Default Re: The "Bid Deal"

    Any elimination of "expenditures" must be paid for by marginal rate cuts - The government's anchor on the people must not grown, it may only shrink.

    Spending cuts and only spending cuts in real government programs. Forget this nonsense about tax "expenditures." That perverted mentality assumes all earnings belong to the government and it is a "expense" to the government to allow people to retain their earnings.
    Last edited by Big War Bird; July 11, 2011 at 03:40 PM.
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  7. #7

    Default Re: The "Bid Deal"

    Any elimination of "expenditures" must be paid for by marginal rate cuts - The governments anchor on the people must not grown it may only shrink.
    Isn't fixing the deficit is a little more important than winning the ideological battle on this one?

    One way or another revenue is going to have to go back up to the past 40 year average of 18% of GDP to close the deficit. Even thats being ambitious as not even Reagan was able to come close to balancing a budget at that level of revenue and had to raise taxes (Reagan also had much much more favorable demographics to work with as well in terms of SS and medicare).
    Last edited by Sphere; July 11, 2011 at 03:55 PM.

  8. #8

    Default Re: The "Bid Deal"

    http://www.ronpaul2012.com/2011/07/1...ling-betrayal/
    LAKE JACKSON, Texas – 2012 Republican presidential candidate Ron Paul has launched a major effort to mobilize grassroots opposition to a deal on the debt ceiling that is rumored to be in the works between the Obama administration and House Republican leaders.
    “The fact is, Republicans were put back in power during the last election to stop the runaway spending in Washington, D.C.—not to cut “deals” that increase taxes and spending,” said Paul.
    “If Republicans cave on their Tea Party mandate now, I believe they will pay a severe price at the ballot box in 2012, and I also think that President Obama believes the same. That is why he is pushing for this deal, but Republicans should not fall for it.”
    Congressman Paul is leading the nationwide push urging people to contact Congress and tell them not to go for the purported deal. The effort began over the weekend by Paul contacting hundreds of thousands of supporters from his email list, and is expanding this morning with millions being contacted via email and social media. By late Monday there will be internet advertising up, and radio and TV ads are planned for later this week.
    “Nothing is more important than mobilizing a grassroots army to stop this sellout of conservative principles by the Washington establishment of both parties. And it is vital that Congress hears from the people, loud and clear, that they cannot support more of the same reckless spending and government overreach they were sent to Washington to end,” continued Paul.
    “We may be just days away from a betrayal of the voters’ trust, and we could end up with no balanced budget amendment and no real spending cuts, and a deal that puts an even greater burden on the American taxpayers. But I refuse to stand by without fighting it.”
    The only budget that matters is this year's. If congress raises taxes and promises "long term" cuts, you'll have higher taxes, and the cuts will never come. They'll increase spending instead.

  9. #9
    Big War Bird's Avatar Vicarius Provinciae
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    Default Re: The "Bid Deal"

    Isn't fixing the deficit is a little more important than winning the ideological battle on this one?
    The debt is an ideological battle. As I see it, the only way to fix the debt to eliminate that what which has gotten us here - A welfare state and world beating military. These things must end.

    One way or another revenue is going to have to go back up to the past 40 year average of 18% of GDP to close the deficit.
    Government tax recipients are already more than adequate to cover the outer limits of what I expect from government. Why on earth should I consent to tax revenues for programs I consider absurd? I've already compromised enough.

    To the questions you raised. Beohner made it pretty clear than anything that looks like a tax hike is off the table. And just about everyone agrees that entitlement spending has to be dealt with - and that solution must be real cuts, there are not taxes hikes big enough to square up the size of these programs unmolested. Seniors will and moan, but they will do that no matter what, so its better to cut big than to cut small, the fallout will be the same regardless.
    Last edited by Big War Bird; July 11, 2011 at 04:29 PM.
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  10. #10

    Default Re: The "Bid Deal"

    Government tax recipients are already more than adequate to cover the outer limits of what I expect from government. Why on earth should I consent to tax revenues for programs I consider absurd? I've already compromised enough.
    A big part of democracy is not getting what you want. Indeed, if you look at the latest Pew polling, 2/3's of the population are agaisnt any cuts to Medicare and SS and so are likely to not get what they want in this proposed deal.

    That being said, tax revenues as a percent of GDP are currently the lowest in the post war era (~15%). The current generation has elected to contribute the least amount of our wealth to paying for the Federal programs than any in the past 70 years. There is something deeply irresponsible in that, and is in no way a compromise to turn this into the long term level of Federal revenue.
    Last edited by Sphere; July 11, 2011 at 04:30 PM.

  11. #11
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    Default Re: The "Bid Deal"

    Don't worry Sphere. The record high private American assets will trickle down eventually.
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    Big War Bird's Avatar Vicarius Provinciae
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    Default Re: The "Bid Deal"

    Ah yes the tyranny of the majority - I forgot about that. As I've said - I've compromised enough. Take it for what its worth. I could cite another poll that which says only 19% want the debt ceiling raised, 47% oppose, 35% answered, "meh."

    As you know, tax revenues are are down as a percentage of GDP thanks to the marginal nature of taxation, not because there have been serious tax cuts. Tax rates haven't been changed much in a decade. Receipts are down because economic activity is down.

    The imperative is to get the economy growing, not raise rates. As the economy goes so do receipts as a percentage of GDP.
    Last edited by Big War Bird; July 11, 2011 at 04:51 PM.
    As a teenager, I was taken to various houses and flats above takeaways in the north of England, to be beaten, tortured and raped over 100 times. I was called a “white slag” and “white ****” as they beat me.

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    Default Re: The "Bid Deal"

    Government spending is one of the best ways to improve the economy when consumers would rather save, only if they actually have the money to back it up though. The bush tax cuts will account for over 50% of america's debt in 20 years.
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    Default Re: The "Bid Deal"

    Uh... I find it very hard to see the Republicans making a deal here with Obama. That would be bad for the moderate Repubs in 2012.

  15. #15

    Default Re: The "Bid Deal"

    Is there any plan to reduce the obscene military budget?



    I'm sure a cut to more reasonable (it's, what, 4x the next competitor?) levels would free up a lot of cash for other stuff...

    I'm guessing the reason this hasn't been done is due to jobs in the armaments sector or something like that? Sure...but couldn't the private sector pick up the slack in other areas?
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    Big War Bird's Avatar Vicarius Provinciae
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    Default Re: The "Bid Deal"

    A cut in military spending? In Sparta? Ha!

    In other news, it appears Obama is willing to raise the SS retirement age to 67.
    As a teenager, I was taken to various houses and flats above takeaways in the north of England, to be beaten, tortured and raped over 100 times. I was called a “white slag” and “white ****” as they beat me.

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    MathiasOfAthens's Avatar Comes Rei Militaris
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    Default Re: The "Bid Deal"

    Quote Originally Posted by Big War Bird View Post
    A cut in military spending? In Sparta? Ha!

    In other news, it appears Obama is willing to raise the SS retirement age to 67.
    Thats only logical. Most Dems would too.

  18. #18

    Default Re: The "Bid Deal"

    Quote Originally Posted by MathiasOfAthens View Post
    Thats only logical. Most Dems would too.
    No....they don't.
    At least not Pelosi and her cronies.

  19. #19

    Default Re: The "Bid Deal"

    Quote Originally Posted by Big War Bird View Post
    A cut in military spending? In Sparta? Ha!

    In other news, it appears Obama is willing to raise the SS retirement age to 67.
    isn't that what paul ryan proposed?

    anyways, it is impossible to do this without some sort of revenue generating measures, same for entitlement cuts. Democrats or republicans who think they can get the other side to do everything rae fooling themselves.

    not to mention they are playing with destruction of US and world economies here. The 2008 recession was enough --- Americans nearly destroyed themselves and the world. If a default is to happen here, it would not just be negligence, but incredible stupidity in leading to a disaster that was completely avoidable ---- simply by raising a number limit.
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  20. #20

    Default Re: The "Bid Deal"

    Don't worry Sphere. It will trickle down eventually.
    I do believe in the idea of keeping taxes relatively low to promote growth. Taxes impose a burden on the economy and reduce economic efficiency. And I don't think taxes should be used as a form of class punishment.

    All that being said, the electorate should be forced to pay for what they demand of government, or at least roughly so. When they are faced with the actual price they might want to pare things down. But pedelling them the idea that they are overtaxed for what is being popularly demanded, and that waste, foreign aid, federal salaries etc. are the source of budget woes rather than the elephants of SS, Medicare/aid, and defense is irresponsible.

    As you know, tax revenues are are down as a percentage of GDP thanks to the marginal nature of taxation, not because there have been serious tax cuts. Tax rates haven't been changed much in a decade. Receipts are down because economic activity is down.
    You are correct, marginal income rates have been stagnant since the Bush tax cuts. However, there have been a glut of tax expenditures, "temporary" reductions in payroll tax rate, suspension of the estate tax etc.

    I am fine with keeping marginal rates where they are at or lower, and instead eliminated much of the expenditures. You would prefer this to be revenue neutral, but I think it would be better for the long term bugdet for it to grow revunues somewhat.(Actually, I would even prefer a drastic cut in corporate taxes, made up for by establishing a extra top personal bracket or two with a rates in the 40%'s but thats another story).

    But in any event, this is a 10 year budget and the revenue end wouldn't take effect till 2013. I see no need for raising revenues before that which would retard the recover. Borrowing costs for the Fed are still very, very low and with a long term deficit plan in place they would stay that way.


    (Heres the Pew Poll on entitement reform I cited earlier)
    Last edited by Sphere; July 11, 2011 at 05:36 PM.

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