Fiscal Cliff MEGATHREAD: Wile E. Economy falls off, lands in cloud at bottom

[CountDeMoney]

Obama to open fiscal talks with $1.6 trillion plan to raise taxes on wealthy
By Zachary A. Goldfarb and Lori Montgomery, Updated: Tuesday, November 13, 8:52 PM

President Obama is taking a hard line with congressional Republicans heading into negotiations over the year-end fiscal cliff, making no opening concessions and calling for far more in new taxes than Republicans have so far been willing to consider.

Obama plans to open talks using his most recent budget proposal, which sought to raise taxes on corporations and the wealthy by $1.6 trillion over the next decade, White House press secretary Jay Carney said Tuesday. That's double the sum that House Speaker John A. Boehner (R-Ohio) offered Obama during secret debt negotiations in 2011.

Obama has been pressing to let the George W. Bush-era tax cuts expire at the end of the year for the wealthiest 2 percent of the nation's households, a tax hike adamantly opposed by Republicans. But Carney suggested that even the revenue generated by letting those tax cuts end would not be enough to tame the national debt and reenergize the economy.

Meanwhile, Treasury Secretary Timothy J. Geithner and other senior Democrats on Tuesday said Obama would not be willing to maintain the Bush tax rates in exchange for a cap on deductions for households earning more than $250,000 a year, a leading Republican alternative.

"I don't see how you do this without higher rates. I don't think there's any feasible, realistic way to do it," Geithner said at a conference in Washington. "When you take a cold hard look at the amount of resources you can raise from that top 2 percent of Americans through limiting deductions, you will find yourself disappointed relative to the magnitude of the revenue increases that we need."

Republicans took Obama's opening bid in stride.

Kevin Smith, a spokesman for Boehner, said in a statement: "The Speaker proposed a way both parties can work together to avert the fiscal cliff without increased tax rates, through a combination of entitlement reforms and revenue via tax reform. Republicans believe this is consistent with the president's call for a 'balanced' approach, and the Speaker looks forward to talking with the president about such a path."

Though Republicans have declined to offer a specific figure, Boehner has suggested that negotiations resume on the terms discussed in 2011, when Boehner offered to raise $800 billion in new revenue over the next decade.

Senate Minority Leader Mitch McConnell (R-Ky.) offered public support for Boehner's position Tuesday and warned Obama not to overplay his hand.

"We're calling on him to lead, to take the initiative, propose a plan that's actually designed to succeed," McConnell said in a speech on the Senate floor. "And if he does, I'm confident he'll find he has more Republican friends over here than he thought."

Democrats said Obama is likely to take a tough stance Friday, when Boehner and other congressional leaders are due to gather at the White House for their first face-to-face discussions about how to avoid the fiscal cliff — the dramatic tax hikes and government spending cuts scheduled for the new year. Fresh off an election in which they kept the White House and picked up seats in the House and Senate, Democrats said there is no reason to compromise now on a central plank of the president's platform.

"It was an intrinsic part of his campaign, and the public supports it. So what more do you want?" said Rep. Sander M. Levin (D-Mich.), the senior Democrat on the tax-writing House Ways and Means Committee. "There was a clear message, so I think the Republicans should listen."

The public is skeptical that a deal can be reached. By 51 percent to 38 percent, more Americans predict Obama and Republicans will not reach an agreement by the end of the year, according to a new Washington Post-Pew Research Center poll. The survey found widespread anxiety over the consequences of failure.

According to the poll, more than six in 10 Americans believe that missing the fiscal-cliff deadline would have an overall negative impact on the U.S. economy. Without a deal, taxes will jump for nine in 10 Americans, with the steepest hikes for top income brackets.

But Republicans in Congress may face more public pressure to make concessions. Should negotiations break down to avoid the $500 billion of automatic tax hikes and spending cuts, 53 percent are inclined to blame Republicans in Congress while 29 percent single out Obama.

Carney said Tuesday that Obama would reprise his plan from earlier this year to raise $1.6 trillion in taxes by raising tax rates, imposing a new special tax on millionaires and scaling back deductions and loopholes.

"We know what a truly balanced approach to our fiscal challenges looks like," Carney said. "The president has put forward a very specific plan that will be what he brings to the table when he sits down with congressional leaders."

Obama's 2013 budget sought to reduce borrowing over the next 10 years by about $4 trillion, counting $1.1 trillion in agency cuts already in force. In addition to raising taxes, Obama proposed to slice $340 billion from health-care programs and to count about $1 trillion in savings from ending the wars in Iraq and Afghanistan.

His budget request did not include reductions to health and retirement benefits, but Obama did consider such changes in his 2011 talks with Boehner, including raising the Medicare eligibility age from 65 to 67 and applying a stingier measure of inflation to Social Security.

Senior Democrats, meanwhile, threw cold water on a competing proposal to scale back deductions that disproportionately benefit upper-income taxpayers while keeping the top tax rates at their present level.

On Tuesday, former Clinton administration Treasury secretary Robert Rubin wrote in the New York Times that closing loopholes and deductions would not be an acceptable solution to the nation's fiscal challenges. And Sen. Patty Murray (D-Wash.), who is set to become chairman of the Senate Budget Committee, said she "has not seen how the math works to let you come up with the additional revenue."

In a meeting Tuesday, Obama offered no specific assurances to liberal leaders about what a final deal might look like and what entitlement programs might face cuts. But Dennis Van Roekel, president of the National Education Association and a participant in the session, said Obama did not have to make such assurances.

"He hasn't wavered through the whole campaign," Van Roekel said. "He's been consistent on [his] message, and don't think he'll change it now."

Van Roekel described Obama and Vice President Biden as friendly, upbeat and attentive as the group leaders expressed support for the president's firm campaign-trail promises to roll back the Bush-era tax cuts for the wealthy. Obama mostly listened, Van Roekel said, occasionally asking questions.

"Everybody in that room had worked very hard for the reelection of President Obama, so there was a good feeling in the room from the very moment we walked in until the time we left," Van Roekel said.

[garbon]

Well the wealthy always make for a nice target. Why just look what Cali did. Voted to increase taxes for wealthy but like hell if they were going to vote yes on the prop to increase taxes for everyone.

[Ed Anger]

I'm tossing stocks overboard in anticipation of nothing being done.

[Valmy]

Austerity now!

Going after the rich is risky, they can take their money and smuggle it elsewhere.  Best to stick with reliable strategy of destroying the middle classes.

[PDH]

Austerity now!

Going after the rich is risky, they can take their money and smuggle it elsewhere.  Best to stick with reliable strategy of destroying the middle classes.

Summon the Sans-culottes to the streets!  Build the barricades!

[garbon]

Austerity now!

Going after the rich is risky, they can take their money and smuggle it elsewhere.  Best to stick with reliable strategy of destroying the middle classes.

[garbon]

This megathread didn't get very far.  Anyway, great to see that after Obama speaks with Boehner today, he's flying to Michigan to convince autoworkers that taxes should be raised on the wealthy.

[Valmy]

Austerity now!

Going after the rich is risky, they can take their money and smuggle it elsewhere.  Best to stick with reliable strategy of destroying the middle classes.

What?

[Valmy]

This megathread didn't get very far.  Anyway, great to see that after Obama speaks with Boehner today, he's flying to Michigan to convince autoworkers that taxes should be raised on the wealthy.

That will be a tough sell to that audience.

[CountDeMoney]

This megathread didn't get very far.  Anyway, great to see that after Obama speaks with Boehner today, he's flying to Michigan to convince autoworkers that taxes should be raised on the wealthy.

No, he's flying to Michigan at the invitation of Daimler, who is going to announce today their $100M+ investment to expand their heavy truck production division in North America.

But nice try, fucking asshole.

[garbon]

This megathread didn't get very far.  Anyway, great to see that after Obama speaks with Boehner today, he's flying to Michigan to convince autoworkers that taxes should be raised on the wealthy.

No, he's flying to Michigan at the invitation of Daimler, who is going to announce today their $100M+ investment to expand their heavy truck production division in North America.

But nice try, fucking asshole.

http://www.sfgate.com/news/article/Obama-heading-to-Michigan-to-push-taxes-on-rich-4104175.php

Obama heading to Michigan to push taxes on rich

President Barack Obama is pressing for public support Monday to raise taxes on the wealthiest Americans, a day after he and House Speaker John Boehner met one-on-one for the first time to discuss ways to avert the "fiscal cliff."

Neither side provided details of the weekend meeting at the White House. But with just three weeks until a flurry of tax hikes and spending cuts start taking effect, the mere fact that the meeting happened was seen as progress.

Negotiations continue to center on whether to raise tax rates for the top two percent of income earners. Obama, in a campaign-style speech to auto workers in Michigan on Monday, is expected to stress that he won't sign a deal that doesn't include higher tax rates for the wealthiest Americans.
While Republicans have long opposed that approach, some GOP lawmakers are suggesting the party relent on taxes in order to win concessions from the president on entitlement reforms.

And business leaders, tired of Washington's partisan bickering creating uncertainty in the marketplace, are emphasizing the need to hammer out a deal before year's end.

"The millions of people that work for us, their lives are in flux. And this is incredibly critical we get this done now," said Jeffrey Immelt, GE's chief executive and head of the presidential advisory council on competitiveness.

Immelt, in remarks aired Monday on "CBS This Morning," added: "Everyone knows we need revenue," because spending cuts alone won't solve the problem.
GOP mavericks are putting increased pressure on their party's leaders to rethink how they approach negotiations with Obama in the wake of a bruising national election that left Democrats in charge of the White House and Senate.

"There is a growing group of folks looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end," Sen. Bob Corker, R-Tenn., told "Fox News Sunday."

If Republicans agree to Obama's plan to increase rates on the top 2 percent of Americans, Corker added, "the focus then shifts to entitlements, and maybe it puts us in a place where we actually can do something that really saves the nation."

Conservative stalwart Sen. Tom Coburn of Oklahoma had already floated a similar idea. Rep. Tom Cole, R-Okla., has said Obama and Boehner could at least agree not to raise tax rates on the majority of Americans and negotiate the rates of top earners later.

"It's not waving a white flag to recognize political reality," Cole said on CNN's "State of the Union."

But such ideas face an uphill battle. Many House Republicans say they wouldn't vote for tax rate hikes under any circumstances. And GOP leadership could lose leverage in the negotiations if it raises the rate on upper-income earners without getting anything substantial in return like entitlement reform.

Democratic leaders have suggested they are unwilling to tackle entitlement spending in the three weeks left before the fiscal cliff is triggered.

"I just don't think we can do it in a matter of days here before the end of the year," Senate Democratic Whip Dick Durbin, D-Ill., said of Medicare reform specifically, in an interview Sunday on NBC's "Meet the Press."

"We need to address that in a thoughtful way through the committee structure after the first of the year," Durbin added.

The "fiscal cliff" refers to rate increases that would affect every worker who pays federal taxes, as well as spending cuts that would begin to bite defense and domestic programs alike. Economists say the combination carries the risk of a new recession, at a time the economy is still struggling to recover fully from the worst slowdown in decades.

The president's message in Michigan will be that the economy is rebounding and Congress should not risk that progress to save tax cuts for the rich. The president will use the Daimler Detroit Diesel plant where he'll speak to illustrate his point, noting that the company plans to spend an additional $100 million to boost production in the U.S.

Obama's plan would raise $1.6 trillion in revenue over 10 years, partly by letting decade-old tax cuts on the country's highest earners expire at the end of the year. He would continue those Bush-era tax cuts for everyone except individuals earning more than $200,000 and couples making more than $250,000. The highest rates on top-paid Americans would rise from 33 percent and 35 percent to 36 percent and 39.6 percent, respectively.

Boehner has offered $800 billion in new revenues to be raised by reducing or eliminating unspecified tax breaks on upper-income earners. The Republican plan also would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare from 65 to 67.

http://www.huffingtonpost.com/2012/12/10/obama-fiscal-cliff-michigan_n_2269917.html

Obama To Press Fiscal Cliff Case In Michigan

President Barack Obama heads for familiar campaign ground Monday, an auto plant in Michigan, to press his case for tax hikes on the wealthy.

Also odd that you'd get so defensive given that Obama has already said previously that he was going to spend more time among the people convincing him of his policies.

[CountDeMoney]

He's not flying there specifically to give the speech to fuck over Yi's and your rich friends.  His comments will be an aside to the main reason for the visit.  And why shouldn't he, anyway?  The public is part of the debate;  the GOP is seeing to that.

Besides, don't you have something more productive to do with your anti-union bullshit this morning?  Toss stuff out the window at sanitation workers, key a teacher's car or something?  You know, Think Globally, Act Locally?

[garbon]

I'm not the one writing newspaper articles. Media seems to see this as Obama moving against the wealthy so don't accuse me of creating my own slant.  Besides my sentiments are more anti-Obama - on the level, couldn't he spend his time more productively?

[Admiral Yi]

Obama seems to be positioning himself so that we don't get an agreement, everyone's taxes increase, and the GOP takes the blame.

Which would be fine with me.

[Jacob]

I'm not the one writing newspaper articles. Media seems to see this as Obama moving against the wealthy so don't accuse me of creating my own slant.  Besides my sentiments are more anti-Obama - on the level, couldn't he spend his time more productively?

At this point your whining has gone on at such length and volume that it's become a reliable indicator that Obama is doing the right thing.