Entitlements

Obama offers no real path forward on entitlements

Barack Obama

During his inaugural address on Monday, President Barack Obama made it clear that he was not willing to negotiate on entitlement programs. “The commitments we make to each other – through Medicare, and Medicaid, and Social Security – these things do not sap our initiative; they strengthen us,” Obama said in his defense of these government-run programs. “They do not make us a nation of takers; they free us to take the risks that make this country great.”

In his first term, President Obama talked about the need to deal with entitlements; however, he brought nothing resembling a credible plan to the table — in fact, he didn’t propose a plan at all.

Rep. Paul Ryan (R-WI), who, despite his recent shortcomings and generally bad record, has offered two credible budget plans that would both reform entitlements and pay down the national debt, responded to Obama’s comments yesterday during an interview on The Laura Ingraham Show:

Ryan said earned entitlements — where you pay your payroll taxes during your working like to get a benefit when you retire, such as Social Security — are “not taker programs.”

“When the president does kind of a switcheroo like that, what he’s trying to say is that we are maligning these programs that people have earned throughout their working lives,” he said. “So it’s kind of a convenient twist of terms to try and shadowbox a straw man in order to win an argument by default.”

Obama slams Republicans over debt ceiling debate

Barack Obama

Earlier today, President Barack Obama held the final White House press conference of his first term, using the opportunity to slam Republicans over the debt ceiling while making yet another call for more tax revenue — despite getting high tax rates on the wealthy in the “fiscal cliff” deal passed at the beginning over the year:

President Obama at a Monday press conference demanded that Congress raise the nation’s $16.4 trillion debt ceiling, saying the country is “not a deadbeat nation.”

Obama said Congress should pay the bills government has already rung up, arguing would be disastrous for the economy — which he said is showing signs of lifting off — to not raise the debt limit.

“It would be a self-inflicted wound on the economy,” he said. “To even entertain the idea of this happening … is irresponsible. It’s absurd.”

The president has insisted he will not negotiate with Republicans over raising the debt ceiling, and gave no sign of wavering on that position. Republicans are demanding steep spending cuts in exchange for raising the debt limit.

“They will not collect a ransom in exchange for not crashing the American economy,” Obama said Monday of Republicans.
[…]
“We can’t finish the job of deficit reduction through spending cuts alone,” he said. While open to “modest adjustments” to entitlement programs, Obama said, “we need more revenue through tax reform.”

Saxby Chambliss is more like a poodle when it comes to fighting spending

Taxby

Sen. Saxby Chambliss (R-GA), facing heat for his less than fiscally conservative record, is trying his best to appease the Republican base. During a conference call with reporters last week, Chambliss echoed a familiar line that we’ve heard from Republicans since they rolled over during the “fiscal cliff” debate:

Obama has promised not to get entangled in protracted negotiations during March’s vote on raising the federal debt limit and the extension of the spending authorization like those that dragged on for weeks before the “fiscal cliff” of sweeping spending cuts and tax increases that triggered automatically at midnight Monday.

The Georgia Republican dismissed that promise.

“My message to you, Mr. President, is you’d better strap on your chin strap very tight because this junkyard dog is going to address spending cuts and entitlement reform in the debt-ceiling debate, and that’s going to be a line in the sand for us Republicans and conservatives,” Chambliss said.

LOL.

It’s time to separate “rhetorical Paul Ryan” from “actual Paul Ryan”

Paul Ryan

The “fiscal cliff” battle is over. Republicans lost, save getting the threshold for taxes increased to $400,000 for individuals and $450,000 for families. The talking point coming from Speaker John Boehner, Senate Minority Leader Mitch McConnell, and a host of other Republicans who voted for the deal is that they’re done negotiating with the White House and will leverage the upcoming debt ceiling fight for spending cuts.

Rep. Paul Ryan (R-WI), who chairs the House Budget Committee, also said something similar last week when asked about his vote for the “fiscal cliff” deal:

Wisconsin Rep. Paul Ryan on Thursday defended his vote for the last minute fiscal cliff legislation that passed Congress this week, saying he supported it to “get this issue behind us, … prevent this massive tax increase and … focus on spending now.”

The 2012 Republican vice presidential nominee acknowledged in an interview with a Milwaukee radio host that he realized he would be criticized for his vote to extend tax cuts for most Americans while raising taxes on the wealthy, but said it was the best deal Republicans could get under the circumstances.

“What I know in my conscience is 98 percent of the families in Wisconsin are not going to get hit with a massive tax increase,” Ryan said Thursday, during an appearance on 620 WTMJ with Charlie Sykes.

FreedomWorks is not on board with Boehner’s “Plan B”

Yesterday, Dean Clancy, Legislative Counsel and Vice President of Health Care Policy at FreedomWorks, wrote approvingly of House Speaker John Boehner’s “Plan B.” Clancy explained, “While not nearly as good as the FreedomWorks Plan to avert the fiscal cliff, Plan B is much better than the so-called ‘balanced approach’ that Mr. Boehner had, until Monday, been trying to negotiate with Mr. Obama.

While this may have left the impression that FreedomWorks was endorsing Boehner’s proposal, alongside Americans for Tax Reform, it would seem that Clancy was just stating his opinion, describing why “Plan B” might be reasonable, not speaking for FreedomWorks as an organization. He updated his post this afternoon, noting that FreedomWorks will be opposing the plan:

After review of the Boehner Plan B legislation, pending in the House today, FreedomWorks has found it must oppose the legislation, and will be urging House members to vote NO on the bill. We will post our formal opposition letter on our site, soon.

Word is that FreedomWorks may also score the vote, which is scheduled to take place some time this evening.

Economist call for pro-growth tax reform and spending cuts

The on-going debate on the “fiscal cliff,” automatic tax hikes and spending cuts that will take place at the beginning of the year, has constantly been at the forefront of the news over the last several months.

Last week, 180 economists signed a letter to members of Congress explaining why a tax hike would hurt the economy. They instead call on Congress to take up tax reform — a simplified tax code with lower rates — reduce spending and take up enetitlement reform:

Some in Congress have advocated allowing the 2001 and 2003 taxpayer relief laws to expire for some or all taxpayers. Such an action would have a significant, negative impact on the economy. Low taxes can have a constructive economic effect by keeping money in the private sector, where it is far more likely to be utilized for efficient purposes. By contrast, raising taxes would divert resources into the relatively inefficient public sector, thereby curbing potential job creation and economic growth. This effect would be even more pronounced during a persistent slump.

In particular, Congress should avoid raising marginal tax rates on income and taxes on investment, such as capital gains and dividends taxes. These types of taxes most directly and meaningfully affect job creation.

White House makes a “fiscal cliff” counter-offer to House Republicans

Barack Obama

Though he has rejected House Speaker John Boehner’s offer, which included higher tax rates on millionaires and raising the debt ceiling, President Barack Obama made a counter-offer yesterday showing some movement in “fiscal cliff” talks:

The Associated Press is reporting that President Barack Obama has made a new budget offer to House Speaker, including a significant shift from a previous sticking point in their negotiations to avert the so-called fiscal cliff.

Obama’s latest counteroffer raises the threshold for tax increases up to incomes above $400,000. That’s an increase from previous demands dating all the way back to the presidential campaign, in which Obama had called for taxes on incomes above $250,000 to return to Clinton-era rates.

Reuters reported on Twitter that Obama’s plan includes $1.2 trillion in increased revenue and $1.22 trillion in reduced spending. Boehner’s office, however, pegged the numbers at $1.3 trillion in new revenue and only $930 billion in spending cuts.

Boehner willing to trade higher taxes on millionaires for entitlement cuts

boehner

Is there some movement in talks on the so-called “fiscal cliff?” It remains unclear right now, but House Speaker John Boehner made a pretty big concession on Saturday that may provide a path to a deal. According to Politico, Boehner is willing to raise tax rates on anyone earning over $1 million in exchange for significant entitlement cuts:

Speaker John Boehner has proposed allowing tax rates to rise for the wealthiest Americans if President Barack Obama agrees to major entitlement cuts, according to several sources close to the talks.

It is the first time Boehner has offered any boost in marginal tax rates for any income group, and it would represent a major concession for the Ohio Republican. Boehner suggested hiking the Bush-era tax rates for top wage earners, including those with annual incomes of $1 million or more annually, beginning Jan. 1, two sources said.

Obama and Boehner spoke by phone Friday after a lengthy face-to-face session at the White House on Thursday. The quickening pace of private conversations between the two key players in the fiscal-cliff talks shows progress is being made in the negotiations, although they are not close to a deal yet, sources said.

Boehner also wants to use a new method of calculating benefits for entitlement programs known as “chained CPI,” which would slow the growth of Medicare and other federal health programs and save hundreds of billions over the next decade.

DeMint slams House GOP “fiscal cliff” plan

Jim DeMint

As noted yesterday, House Republicans have laid out their counter-proposal to the White House as negotiations continue on the so-called “fiscal cliff.” While GOP leadership seems pretty darn impressed with their plan to raise taxes by $800 billion, Sen. Jim DeMint (R-SC) has come out strongly against it:

The comments from DeMint, co-founder of the Senate’s anti- tax Tea Party caucus, represent a strong indictment of Boehner’s plan from a fellow Republican lawmaker and highlight a divide within the party. Boehner yesterday proposed a $2.2 trillion deficit-cutting proposal that seeks $800 billion in revenue in the next decade from an overhaul of the tax code that would curb some breaks.

“Speaker Boehner’s $800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more, while not reducing our $16 trillion debt by a single penny,” DeMint said in a statement. “Republicans must oppose tax increases and insist on real spending reductions that shrink the size of government and allow Americans to keep more of their hard-earned money.”

Republicans trading economic growth for tax hikes

boehner

If you’ve followed the “fiscal cliff” debate, then you know that it has kicked up a debate over taxes that Republicans should win. But rather than make the case for less taxes and for entitlement reform, House Speaker John Boehner has shown a willingness to raise tax revenues, though he refuses to support raising tax rates.

But the prospect of Republicans backing increased tax revenues has caused a substantial rift with fiscal conservatives in Congress, many of whom feel that the GOP is risking economic growth and job creation by taking more money of the economy:

In order to get one with President Barack Obama — who has refused to cut a deal until Republicans agree to increase tax rates on the wealthy — the GOP may have to go even further on taxes, a prospect that could prompt a full-scale party rebellion.

“That’s a big gulp,” Senate Minority Whip Jon Kyl (R-Ariz.) said of the $800 billion in new taxes, which did not include a tax rate increase. “As long as we’re not talking about rates, there may be a way to accomplish it.”

Asked about the concerns from conservatives, Kyl said: “They are right it would hurt job creation. Absolutely right. Well, that’s the question — what is the least, worst alternative? And I don’t know what the answer to that question is at this point.”

 


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