This fight over pay-fors, pay-go, and emergency spending is making Democrats in congress look like fools. The spinelessness that our side of the aisle is showing is almost embarrassing and makes me wonder if they are practicing at the alter of President Hoover.
If we lose the House next fall it will be because Democrats in the House are spineless autobots not willing to take a stand on issues and force Republicans into tough votes. Moderate and Progressive, Democrats cannot come to an agreement on how to fund emergency spending? Although, as far as I know never has there been a demand to pay for emergency spending. Now it comes down to if continued Unemployment benefits are emergency spending.
OK let's have the debate, pay for the damn bills and while you are at it pay for the damn war(s). Cut corporate loopholes, get rid of tax deductions for those making more than $500k/year, levy a small tax on equity transactions, and be done with it.
Democrats have to learn to work together, progressives, moderates, and conservatives. It may be up to Pelosi to pull all of the disaffected moderate House and Senate members in a room and throw away the key until they get to some combination of spending cuts and revenue increases that will bring the $200 billion in needed stimulus the economy needs now and another $350 - $500 billion we need to pay for the damn wars and cut the deficit in the out years.
Paul Krugman has it right and unfortunately Congressional democrats didn't get the memo.
Suddenly, creating jobs is out, inflicting pain is in. Condemning deficits and refusing to help a still-struggling economy has become the new fashion everywhere, including the United States, where 52 senators voted against extending aid to the unemployed despite the highest rate of long-term joblessness since the 1930s
In America, many self-described deficit hawks are hypocrites, pure and simple: They’re eager to slash benefits for those in need, but their concerns about red ink vanish when it comes to tax breaks for the wealthy. Thus, Senator Ben Nelson, who sanctimoniously declared that we can’t afford $77 billion in aid to the unemployed, was instrumental in passing the first Bush tax cut, which cost a cool $1.3 trillion.
President Obama needs to put Republicans in a box by practicing a little fear-mongering and Clinton style of politics. He needs to tell the American people that the United States WILL with all certainty go into another recession if we do not get our fiscal house in order. He needs to scare the Bejesus out of us and tell us that the wars need to be paid for And we need to cut our deficits in half or we will go back to the way it was last year when companies were shedding jobs.
The President can lay out a series of spending cuts and tax increases that will begin to close the deficit in 2011 - 2021. He can explain that trying to do too much now will put the gains made into jeopardy. Another key to this is to politicize this mess, he can't go into it by saying he wants 80 votes in the Senate. The American people are scared and they need the Professorial Obama to give them a plan to get us out of the current and future messes created by Republicans.
Independent and Moderates, not wanting to increase spending will come along if the president and Democrats can show that they have a credible plan to offset the increased spending and more importantly cut the debt, once we come out of this mess.
A few days ago I wrote a diary about the zero sum game that politicians and pundits on both sides use to kill necessary spending cuts and tax increases. Here is the link to the Committee for a Responsible Federal Budget. It's a budget simulation that shows there are ways to cut spending and raise taxes in a way that will not send people into the streets, will not scare old people, and won't sacrifice security.
The choices I made below lowers the debt to 58% of GDP by 2018. Of course some of the measures are not optimal but the pain is spread to both sides in a way that is really not all that painful.
Current Choices: Stabilize the U.S. Debt
Iraq and Afghanistan
*Reduce Troops to 30,000 by 2013 Savings -$740B
Bush 2001/2003 Tax Cuts
*Reduce Lower Rate Cuts by Half and Let Upper-Income Cuts Expire
increase debt $2,060B
Discretionary Spending Growth
*Grow Regular Discretionary Spending with Inflation Neutral $0 Savings
Defense, Diplomacy & Security
*Enact Administration's Proposed Weapon System Cuts savings -$30B
*Cut Foreign Economic Aid in Half savings -$110B
*Expand Veteran's Income Security Benefits increases debt $30B
*Cancel Missile Defense System savings -$50B
*Reduce Spending on Ship Building Savings -$50B
*Increase Homeland Security Spending increases debt $50B
*Reverse "Grow the Army" Initiative savings -$90B
Domestic Social & Economic Spending
*Enact New Jobs Bill increases debt by $210B
*Index Current (Post-Stimulus) Benefits to GDP increases debt $140B
*Freeze Average Unemployment Benefits at 2009 Levels savings -$50B
*Double Funding on Adoption and Foster Care increases debt $70B
*Increase Funding for the Education of Disadvantaged and Disabled Children increases debt $290B
Social Security ***Controversial but some Middle Ground could be found***
*Raise the Normal Retirement Age to 68 savings -$110B
*Gradually Reduce Scheduled Benefits (by 30% in 2080) savings -$100B
*Use An Alternate Measure of Inflation for COLAs savings -$100B
*Increase Years Used to Calculate Benefits savings -$40B
*Include all New State and Local Workers savings -$80B
*Institute a Minimum Benefit increases debt $130B
Health Care
*Expand Coverage to an Additional 5 Million People increases debt $130B
*Increase Cost-Sharing for Medicare savings -$100B
*Raise Medicare Premiums to 35% of Costs savings -$140B
*Increase the Medicare Retirement Age to 67 savings -$80B
*Increase Medicaid Funding to States 57% to 60% increases debt $140B
Other Spending
*Eliminate Certain Outdated Programs savings -$40B
*Cut Federal Workforce by Five Percent (Waste & Inefficiency)savings -$130B
*Reduce Farm Subsidies savings -$80B
*Expand Spending on Federal Research & Development increases debt $100B
*Cut Earmarks in Half savings -$80B
*Increase Mass Transit Funding increases debt $60B
Revenues
*Increase User Fees Across the Board revenues -$40B
*Sell Certain Government Assets revenues -$70B
*Impose Financial Crisis Responsibility Fee revenues -$80B
*Reform International Tax System revenues -$120B
*Enact Carbon Tax or Cap-and-Trade revenues -$330B
*Increase Gas Tax by 10 Cents per Gallon revenues -$80B
*Enact Five percent VAT With Partial Rebate revenues -$630B VAT would exempt items like housing, food, etc and would have a rebate for lower and middle class tax payers.
*Gradually Increase Dependent Exemption by $3,500 increases debt $190B
*Impose Surtax on Income above $1 million revenues -$190B
*Gradually Increase Payroll Tax by One Percentage Point revenues -$130B
Raise Social Security Payroll Tax Cap
*Raise Cap to Cover 90% of Earnings revenues -$420B
*Reduce Corporate Tax Rate from 35% to 30% increases debt $390B
*Index Tax Code to Alternate Measure of Inflation increases revenues -$80B
*Improve Tax Collection (Reduce Tax Gap) Increases revenues -$20B
Tax Expenditures
*Convert Mortgage Interest Deduction to a 20% Credit savings -$190B
*Limit Itemized Deductions for High-Earners savings -$250B
*Curtail State and Local Tax Deduction savings -$470B
*Make Research & Development Tax Credit Permanent increases debt $80B
*Expand the EITC and Child Tax Credit increases debt $90B
*Extend "American Opportunity" College Tax Credit increases debt $60B
*Replace Employer Health Care Exclusion with a Flat Credit (In Place of Excise Tax) savings -$340B
However, it will take leadership by the President and both Houses of Congress. Because right now its almost embarrassing the way Democrats are failing to lead on this or any other issue this year.