Thursday, June 30, 2011

Disappointing presser?


TJE said...

Mark Halperin apparently thought so:

PBM said...

I didn't think it was that bad when I was watching it. He made some good points about sacrifices the country would have to make if we maintained certain tax breaks that we do right now. The author makes some good points about the private jet tax break being included in the stimulus, and Dems being opposed to the Panama free-trade agreement. I lose him when he points to the "Institute for Energy Research" as a credible source. If you look at its website, you can clearly see that it is funded by fossil fuel interests and pushing their agenda. On the tax rates, I don't know who is right, but rates are still close to the lowest so Obamas not that far off. I do think the Michele Bachmann point at the end is interesting too.

Patrick_L said...
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Patrick_L said...

a) a deal will be made- everything is just political posturing. Which is why I completly support Obama's position- Republicans are basically trying to use the Nixon-insanity strategy to extort Obama to do what they want. Otherwise they'll destroy the economy. It's irresponsible, and Obama is right to point out the choices Republicans are making on the impacts of deficit reduction.

b) the author makes so many glaring mistakes I don't know if I want to spend sufficient time rebutting them all.

"Things we can do right now" refers to the Obama administration’s support for continuing to do things the government has been doing throughout the recession but could expire without Congressional action- payroll taxes, extended UI benefits, etc. He IS DOING THESE THINGS RIGHT NOW- and he wants to keep on doing them. He would have liked to do more early on in the recession when it would have been best to implement them- but alas the Republican Party took the political low-road instead of heeding sound and simple economics.

The Free Trade Agreements are not immediate substantial economic booms- nor should they be considered such, and anyone who thinks that they are is an economic simpleton.

Let's not forget- the Republican budgets passed in the House and supported by Senate Rs added trillions to the deficit. Though everyone seems to try to ignore this fact, even though it exposes the Republican hypocrisy on the debt ceiling that they’ve already voted repeatedly for all the decisions that necessitate raising the debt ceiling.

Conservatives seem to be purposefully talking about the wrong tax expenditure that is actually being looked at in these discussions- it is not the accelerated depreciation passed in the stimulus package. What is being discussed is the 1987 tax provision providing for five-year depreciation for corporate jets versus seven for commercial ones.

The writer’s discussion of oil and gas tax policy is simplistic, ignoring the ability of corporations to shift liabilities and burdens across time, in addition to utilizing aggressive corporate accounting practices, to minimize taxes paid but maximize the appearance of relative tax burdens. As do all corporations and industries.

On taxes paid by the wealthiest Americans- the CEOs and hedge fund managers Obama mentions- Obama is factually correct or nearly correct in that Americans of such extreme wealth amounts are paying the lowest or near lowest levels of taxes they have paid in modern American history. The top marginal federal income tax rate is an extremely poor proxy for this, ignoring far superior datasets (though the most comprehensive and time-continuous do take time and thus aren't updated for the recession yet). The Obama administration has btw aggressively contributed to this low tax burden through its continuation of the Bush tax rats and countless additional tax provisions it has done through the stimulus, lame-duck Tax-UI deal, etc.

TJE said...

WAPO's assessment:

TJE said...

TJE said...

Patrick_L said...

Sigh. I'll respond to the fiscal policy points.

Obama has made quite clear that he opposes extending the high-income Bush tax cuts. He has supported the capping of tax expenditures' value for people making over $250k repeatedly in budget proposals. His position on this is quite clear- he supports raising taxes on people making over $250k.

Also, Obama is not arguing that the specific tax expenditures he has targeted would make a significant impact on deficit reduction. He is arguing that we should be examining the trade-offs of certain decisions, and so he says:
"Before we ask our seniors to pay more for health care, before we cut our children's education, before we sacrifice our commitment to the research and innovation that will help create more jobs in the economy, I think it's only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys.”

Note the use of the word before. Not A or B, one or the other- but closing corporate tax breaks before cutting things like food assistance for women and children (which House Republicans have already voted for). He has put forward trillions of spending cuts on the table. He has already put forward large and very specific cuts to important low-income programs like Pell grants and Medicaid. But he is also arguing that revenues should be included in any deficit-reduction deal, otherwise the spending cuts necessary to stabalize the debt would require devastating cuts in core discretionary and entitlement programs. Budgeting is about making decisions, and we should be making decisions about priorities and what should be cut first.

Glenn Kessler fails to point out that the CBO figures he cites only run up to 2007- and are not current tax rates. We don't know for sure one way or the other whether the current rates are the lowest since the 1950's- we just know they are very close, possibly slightly lower or possibly slighly higher.

On Social Security benefits, I'm not sure the exact point Kessler is trying to make. He doens't appear to be rebutting anything the President said. Kessler is either wrong or not actually saying the President was incorrect. (I'll note that Kessler provides the correct caveat that this isssue is particularly tricky, more so than I suspect even Kessler guesses). If we hit the debt limit, Treasury would have to prioritize the use of the revenue inflow to cover the larger amount of government obligations. Not all government obligations (SS benefits, defense, discretionary programs, contracts to government suppliers, etc.) could be met without borrowing money, which would be breaking the debt limit and therefore be illegal. Social Security has the exact same legal claim as Chinese creditors to getting paid by the Treasury. There is no legal reason to pay the Chinese before Social Security benefits. The point that Obama was made was correct- that hitting the debt limit would require making those kinds of choices, and the effect of Republican bills would be to try to instruct the President to make that kind of priorizitation (china before Social Security). The Treasury would have to break U.S. law to pay Social Security benefits without the revenues for those benefits (i.e. borrowing and breaking the debt limit).

Anywyas- it wasn't clear to me what Kessler was trying to say Obama got wrong on the debt limit. Kessler was just saying other facts in addition to the ones Obama provided, though Kessler's one point was fuzzy and bordering on being wrong.