The Glade 4.0

Claiming that entitlements won't be able to be paid if the debt ceiling is not raised is a 100% accurate statement, unless you're willing to cut the military down to 1/5th of its current funding level and eliminate all other government spending completely. Calling him a liar over this is just blaming Obama because he's Obama.

Thanks for the clarifications. I took your comments wrong, so let me try and clarify.

The revenue side isn't equitable and fair mostly because of the various loopholes and tax exemptions that are out there.
In general, the wealthy are much more able to take advantage and exploit those loopholes than the wage class. Similarly, when they do exploit those loopholes, the impact on the revenue side is much greater for someone who's wealthy than someone who isn't. In short, the wealthy have many more resources at their command to "game" the system for their benefit.

Who is wealthy and who is wage class is tricky, they were terms that Khross used that I basically ran with. There's a lot of grey area in that and it's a sliding scale depending on what city you live in. But in general, I would classify anyone who makes more than 500k/year as wealthy, tho that bar is probably lower. Wage class to me indicates someone who has to work. Probably anyone who makes 250k/year or less. But as I said there's a lot of grey.

The we is every citizen. Everyone should pay in something to society for enjoying it's benefits. That said, while everyone should, not everyone can, and I do support the idea that if you're living below the poverty line or some similar threshold, that you should not have to pay income tax. That is with the understanding that you still pay some taxes through sales taxes, etc.

It's 100% fear-mongering. Why didn't he hold a press conference to say that if the debt ceiling wan't raised he wouldn't be able to send out paychecks to Congress?

Despite their differences, leaders from both parties insist they are committed to reaching an agreement that will allow them to raise the debt ceiling before August 2. McConnell's fallback proposal would give Obama the power to raise the borrowing limit by a total of $2.5 trillion, but also require three congressional votes on the issue before the 2012 general election.

Specifically, Obama would be required to submit three requests for debt ceiling hikes -- a $700 billion increase and two $900 billion increases. Along with each request, the president would have to submit a list of recommended spending cuts exceeding the debt ceiling increase. The cuts would not need to be enacted in order for the ceiling to rise.

Congress would vote on -- and presumably pass -- "resolutions of disapproval" for each request. Obama would likely veto each resolution. Unless Congress manages to override the president's vetoes -- considered highly unlikely -- the debt ceiling would increase.

I have a hard time with the whole "wealthy" or "rich" label, because I've known quite a few people who make 100's of thousands a year and they are still living paycheck-to-paycheck. Wealth, to me isn't how much you make, it's how much you have accumulated.

I agree that the exemptions are out if hand, but I'll add that it's the people who have the ears of congressmen that get the exemptions. BTW, I hate the term "loopholes" when dealing with the tax code because it brings to mind the idea that someone found a sneaky way to get around the code, when, in fact, the code was written with the express intent to create the ways for certain people to get out of paying. If someone pays a lobbyist to get them an exemption, they'll get it whether the congressman has a D or an R after their name. That said, it confused me that you state that it isn't "equitable and fair" because of the exemptions are used by both the upper and lower income taxpayers. If everyone is using them (as I take your statement to mean), then that seems both equitable and fair.

I think a flat tax, or even a consumption tax would be the most equitable with an initial exemption to the poverty line. What is a "progressive flat tax"?

I must ask again, about "society's benefits", I just don't think we're on the same page. I see the benefits to society that must be paid for being things like the court system and our national defense. I don't see how those in the upper income levels benefit more from those things than those of lower incomes.

Man, if he were to actually WITHHOLD congress paychecks until they submitted a balanced budget (without a debt increase) I would *shudder* actually have to consider possibly voting for him against a random worthless Repub...

*then again*

Why should he hold a press conference to tell people things they don't care about?

He doesn't need a press conference to tell Congress this.

You realize the current "fallback plan" proposed by the Republicans is one that gives Obama carte blanche to raise the debt cap by $2.5 trillion without having to cut ANY spending, right? There is no oversight at all, they take themselves completely out of the loop and let the President decide when to borrow money. They opposed Obama's "grand bargain" that promised $4 trillion in cuts and took a hardline stance, and now they (and we) are going to get nothing. No doubt all the businesspeople that got them elected reacted badly when they found out Republicans were really considering crashing the dollar over this. Now we're going to get higher debt and more taxes with no cuts.

http://www.cnn.com/2011/POLITICS/07/19/debt.talks/index.html



Remember, this plan is from the Republicans. I think this proves exactly how little Washington thinks of the Tea Party and its intelligence, because even the Democrats could not come up with a better insult to them than this plan. Hand Obama the keys to $2.5 trillion in borrowing while requiring nothing substantial other than meaningless "resolutions of dissapproval" that they know will get vetoed so they can grandstand about being against more spending while allowing it to go through anyway.

Tom Coburn unveils $9 trillion plan...

In Coburn’s report, entitled “Back in Black,” the second-term senator proposes vastly deeper cuts across virtually every federal agency, including more than $2.6 trillion out of Medicare and Medicaid and about $1 trillion in new revenue from overhauling the tax code.
...
Coburn said he wouldn’t increase tax rates, but would end “dozens” of corporate tax expenditures, including ethanol subsidies and the 2000 New Markets Tax Credit program aimed at spurring new investments in real estate projects and businesses working in low-income communities
...
Coburn said that he would slash $1 trillion from the Pentagon, including from weapon systems and military personnel changes - and he said he would “reform and modernize” military health care for retired veterans who were not injured during their service.

In what will certainly anger Democrats, Coburn touched the third rail on both Social Security and Medicare. On Social Security, he suggests that starting in 2022, the retirement age should be increased by one month every other year. By changing the benefits formula, especially for higher earners, and overhauling disability insurance, Coburn says he can put the program on a solvent path for the next 75 years.

You just refuse to understand. It's just like when the Nat'l Parks Service is confronted with cuts to their budget, they threaten that they'll have to close the Washington Monument. It's all about the fear you can generate, not reality.

Yeah, everyone should have jumped at "Obama's 'grand bargain'" with it's "promise" of future cuts to be decided later in exchange for $2.4 Trillion. At least McConnell's plan is in writing, unlike Obama's "promises". You didn't mention the "Democrat fall-back plans", why?

Republican fallback plan, heheh, only because it creates a nice strawman for you, how about any of the other proposals? I much prefer many of the multiple proposals that have been presented, like this one:

Liberal wealth distribution at it's finest. "They have more so more should be taken from them!" "It's only fair!!" "WHAAAAAA!!!"

Certainly those things are examples of society's benefits. As are things like roads, schools, parks, police, etc. Upper income levels absolutely benefit more from those things than those of lower incomes. A simple drive through a wealthy neighborhood and a poor neighborhood should bring to light many observable differences in the quality of the roads, sidewalks, crime levels, police response, schools and parks. And that speaks nothing to the fact that the business owners, many of which fall into the wealthy category, have been able to be successful because of the stability provided by a well run country. Whether that is the roadways for transportation of goods, police for security of their business or schools for a quality educated workforce.

Sure there are people who make a butt ton of money who are still terrible with handling it. That, however, is a separate issue. And you are technically correct, that wealth is how much you've accumulated. But obviously someone who makes "100's of thousands a year" has the potential to accumulate orders of magnitude more wealth in the same time period as someone who only makes 50k a year.

Certainly some exemption are on purpose, and created via lobbists and the like. However, there are also "loopholes" for lack of a better term, where it's pretty obvious that the results were not the initial intent, but the results of someone gaming the system.

Neither are desireable.

As for my comment about "equitable and fair", it's more pointing out that many of the various tricks out there to reduce one's tax burden require significant amounts of money in order to employ. So by definition they are only available to the "wealthy".

In addition to that, because many tax related calculations are percentage based, the impact on the revenue side is larger on top of it. Someone gaming the system for a 10% reduction in their taxes @ 50k doesn't have near the impact on the national budget as someone gaming a 10% reduction @ 10M.

A "progressive flat tax" is something I basically made up, and it's more or less what it says. It's a flat tax (no exemptions, deductions, etc.) where the tax rate does change based on income level. So as just a theoretical example, 0% at the poverty line, 5% from the poverty line to 2x the povertly line, 10% from 2x the poverty line to 10x the poverty line, etc. NOTE: I'm pulling those numbers and breakpoints out of thin air, with no thought into how "correct" they would be just as an example.

Certainly those things are examples of society's benefits. As are things like roads, schools, parks, police...
Upper income levels absolutely benefit more from those things than those of lower incomes. A simple drive through a wealthy neighborhood and a poor neighborhood should bring to light many observable differences in the quality of the roads, sidewalks, crime levels, police response, schools and parks.

And that speaks nothing to the fact that the business owners, many of which fall into the wealthy category, have been able to be successful because of the stability provided by a well run country. Whether that is the roadways for transportation of goods, police for security of their business or schools for a quality educated workforce.

I understand perfectly what Washington Monument Syndrome is. The thing is, cuts to the Parks Service wouldn't require them to close the Washington Monument. Not raising the debt cap would require the government to suspend some entitlement payments. That's a big difference.

I mentioned the one that's now most likely to pass. The Republicans could have gotten cuts, but instead now they get no cuts. The irony is the Tea Party will probably praise them for holding out and getting nothing.

To be perfectly honest, I like that plan too. But it has no chance of passage, we both know that. I think it would have been much better for Republicans to sign onto Obama's plan and gotten cuts rather than political grandstanding that results in no cuts.

I said the government has enough money to pay for entitlements + 1/5th of military spending. According to that chart, the government has enough money to pay for entitlements + 4/5ths of military spending. And you can't just not pay federal salaries. Even if you cut their departments and fire them now, they still earned that money. The SS/Medicare portions of the federal salaries definitely have to be paid, it's a felony for any other employer to not pay those, even if they miss payroll otherwise.

I don't think you really believe that (take for example, the minimum income before taxes are assessed). I'd be in a completely different situation financially if there were no mortgage interest exemption, child tax-credit, depreciation of goods and property.

Like what?

I don't see those things as being within the purview of the Federal Gov't - which may be part of the problem we have in seeing things through the same lens.

I don't see how business owners benefit any more than their customers from those items. Additionally, those business owners benefit society to a greater degree than others because they offer other people employment. Again, those should be state and local issues in any event. If that were truly the case, we'd be able to see which taxation methodology would be most effective and really beneficial to society if the state/local gov'ts were allowed control of how it is dealt with. The whole "50 laboratories of innovation".

Washington (CNN) -- President Barack Obama will meet with top Senate Democrats at the White House on Wednesday afternoon as part of ongoing talks to pass a measure raising the nation's debt ceiling, according to presidential spokesman Jay Carney.
The president discussed the issue over the phone Tuesday night with House Speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid, and Senate Minority Leader Mitch McConnell, Carney said.
Key administration and congressional officials are currently focused on a new bipartisan $3.7 trillion debt reduction plan -- the latest effort to avoid a potentially catastrophic default next month on the federal government's financial obligations.
Obama offered strong praise for the initiative on Tuesday, calling it "broadly consistent" with his own approach to debt reduction because it mixes tax changes, entitlement reforms and spending reductions.
Senate Democratic leaders, however, expressed skepticism that they will be able to increase the debt limit and pass the plan -- drafted by members of the chamber's so-called "Gang of Six" -- by the August 2 deadline.
If Congress fails to raise the current $14.3 trillion debt ceiling by that date, Americans could face rising interest rates, a declining dollar and increasingly jittery financial markets, among other problems.
'Gang of Six'
A bipartisan group of U.S. senators who have unveiled a $3.7 trillion debt reduction plan. Members include:

Republicans: Saxby Chambliss of Georgia, Mike Crapo of Idaho and Tom Coburn of Oklahoma.
Democrats: Dick Durbin of Illinois, Kent Conrad of North Dakota and Mark Warner of Virginia.
The seriousness of the overall situation was reinforced last week when a major credit rating agency, Standard and Poor's, said it was placing the United States' sovereign rating on "CreditWatch with negative implications." Another major agency -- Moody's Investors Services -- said it would put America's bond rating on review for a possible downgrade.
House Republicans, meanwhile, approved a "cut, cap and balance" plan Tuesday night that would raise the debt ceiling while imposing strict caps on all future federal spending and making it significantly tougher to raise taxes -- the solution favored by hard-line conservatives.
The GOP plan -- which also requires Congress to pass a balanced budget amendment to the Constitution before raising the debt ceiling -- has little chance of clearing the Democratic-controlled Senate or surviving a certain presidential veto. The vote did, however, allow rank-and-file Republicans to clearly demonstrate their preference for steps favored by many in the tea party movement even as their leadership seeks a middle ground with Democrats.
"While President Obama simply talks tough about cutting spending, House Republicans are taking action," Boehner, R-Ohio, said in a statement after the sharply polarized 234-190 vote.
Obama said before the vote that legislators "don't have any more time to engage in symbolic gestures."
"We have a Democratic president and administration that is prepared to sign a tough package that includes both spending cuts (and) modifications to Social Security, Medicaid and Medicare that would strengthen those systems and allow them to move forward, and would include a revenue component," Obama added.
"We now have a bipartisan group of senators who agree with that balanced approach. And we've got the American people who agree with that balanced approach."
Obama also refused to rule out a fallback plan proposed by McConnell, R-Kentucky, that would raise the debt ceiling up to $2.5 trillion through the 2012 election.
Under the Gang of Six plan -- put together by three Democrats and three Republicans -- $500 billion in budget savings would be immediately imposed, with marginal income tax rates reduced and the controversial alternative minimum tax ultimately abolished.
The plan would create three tax brackets with rates from 8% to 12%, 14% to 22%, and 23% to 29% -- part of a new structure designed to generate an additional $1 trillion in revenue. It would require cost changes to Medicare's growth rate formula, as well as $80 billion in Pentagon cuts.
Sen. Tom Coburn, R-Oklahoma, announced Tuesday that he had decided to rejoin the group. Coburn had recently withdrawn from the Gang of Six due to a dispute over entitlement cuts, but declared Tuesday that the plan, which now includes $116 billion in entitlement health care cost savings, has "moved significantly, and (is) where we need to be." The other members are Republican Sens. Saxby Chambliss of Georgia and Mike Crapo of Idaho, and Democratic Sens. Dick Durbin of Illinois, Kent Conrad of North Dakota, and Mark Warner of Virginia.
Other legislators supporting the plan included two conservative Republicans -- Sen. Lamar Alexander of Tennessee and Rep. Roger Wicker of Mississippi -- while another GOP conservative, Sen. Jeff Sessions of Alabama, raised questions about whether it achieves necessary spending cuts and raises taxes.
"We don't have 60 votes, but we're moving toward it," Durbin, the Senate majority whip, told reporters Wednesday, referencing the number of votes necessary to overcome a potential filibuster and win Senate approval.
A spokesman for Boehner said Tuesday the Gang of Six plan is similar in concept to what Boehner and Obama had discussed in their negotiations so far, "but also appears to fall short in some important areas."
Other House Republican leaders, including Majority Leader Eric Cantor of Virginia and Budget Committee Chairman Rep. Paul Ryan of Wisconsin, also questioned the Gang of Six plan's call for increased tax revenue and commitment to reducing future costs.
Reid, D-Nevada, meanwhile, noted that the Constitution requires revenue bills to originate in the House, while Durbin pointed out that the plan still must be drafted into legislative language and analyzed by the Congressional Budget Office before it can be considered.
"It's not ready for prime time," said Durbin.
Reid said he's open to incorporating some elements of the proposal into a separate bill that he and McConnell are drafting as a fallback option to prevent the U.S. government from defaulting on its debt.
Several new public opinion polls, meanwhile, show that a majority of Americans want legislators to compromise on a deficit reduction deal instead of refusing to yield from their starting positions.
A CBS News poll released Monday indicates that two-thirds of Americans say any agreement should include spending reductions and tax hikes, with 28% saying a deal should only include spending cuts and 3% saying it should only include tax increases.
According to the survey, there is little partisan divide on the question. More than seven out of 10 Democrats and more than two-thirds of independent voters support a balanced approach, as do 55% of Republicans and 53% of self-described tea party movement supporters.
A Quinnipiac University poll released last week had similar findings. The survey indicated that two-thirds of the public supported a deal that included spending cuts as well as tax increases for wealthy Americans and corporations. Nearly nine out of 10 Democrats and two-thirds of independents in the survey supported the inclusion of tax increases, with Republicans divided on the issue.
The GOP initiative -- which would require any new tax increases to be approved by two-thirds of the members of the House and Senate -- stands in sharp contrast to Obama's stated preference for a package of roughly $4 trillion in savings over the next decade, composed of tax increases on the wealthy and spending reforms in Medicare, Social Security and elsewhere.
Hopes for such a so-called "grand bargain" appeared to have faded in recent days, partly because Republicans have continued to insist that any tax increases could derail an already shaky economic recovery. It was not immediately clear whether the Gang of Six proposal would be able to revive those hopes.
At the heart of the tax dispute has been Obama's call for more revenue by allowing tax cuts from the Bush presidency to expire at the end of 2012 for families making more than $250,000. The president's ideal plan would keep the lower tax rates for Americans who earn less.
Obama noted last week he is not looking to raise any taxes until 2013 or later. In exchange, the president said, he wants to ensure that the current progressive nature of the tax code is maintained, with higher-income Americans assessed higher tax rates.
But resistance to higher taxes is now a bedrock principle for most Republicans, enforced by conservative crusaders such as political activist Grover Norquist. His group, Americans for Tax Reform, has sponsored a high-profile pledge to oppose any tax increase.
The pledge has been signed by more than 230 House members and 40 senators, almost all of them Republicans.
Despite their differences, leaders from both parties insist they are committed to reaching an agreement that will allow them to raise the debt ceiling before August 2. McConnell's fallback proposal would give Obama the power to raise the borrowing limit by a total of $2.5 trillion, but also require three congressional votes on the issue before the 2012 general election.
Specifically, Obama would be required to submit three requests for debt ceiling hikes -- a $700 billion increase and two $900 billion increases. Along with each request, the president would have to submit a list of recommended spending cuts exceeding the debt ceiling increase. The cuts would not need to be enacted in order for the ceiling to rise.
Congress would vote on -- and presumably pass -- "resolutions of disapproval" for each request. Obama would likely veto each resolution. Unless Congress manages to override the president's vetoes -- considered highly unlikely -- the debt ceiling would increase.
The unusual scheme would allow most Republicans and some more conservative Democrats to vote against any debt ceiling hike while still allowing it to clear.
McConnell and Reid are also working on two critical additions to the plan, according to congressional aides in both parties. One would add up to roughly $1.5 trillion in spending cuts agreed to in earlier talks led by Vice President Joe Biden; the other would create a commission meant to find more major spending cuts, tax increases and entitlement reforms.
Changes agreed to by the commission -- composed of an equal number of House and Senate Democrats and Republicans -- would be subject to a strict up-or-down vote by Congress. No amendments would be allowed.
Sources say the panel would be modeled after the Base Closing and Realignment Commission, which managed to close hundreds of military bases that Congress could not otherwise bring itself to shut down.

Dude, I can understand you don't want to deal with the reality of people questioning your statements, but you're continually spinning. Yes, he could guarantee that those things were paid, but that wouldn't make for a good crisis, and you know "you never want a serious crisis to go to waste". Yes, I could see doing just that by cutting enough of that crap to pay for what's needed. Defer about half of the vendor payments and pay off the line items for VA, IRS, Military Pay and a portion of TANF, HHS, and Justice...voila, we go from "no way" to "that's a way".

I've tried to roughly prioritize spending as I think is politically palatable to both tea partiers and others: the debt payments first, followed by military payrolls and family housing, VA benefits, Social Security, Medicare and Medicaid. After that, we hit the red bloc: funding for military operations. Somewhere in there, the money runs out. Anyone in line after that doesn't get paid.

The problem is, prioritizing strictly the way this chart does won't work. Are you really going to just stop funding current military operations on August 3rd? You're going to leave a bunch of guys sitting in Iraq and Afghanistan and Libya with tanks and automatic weapons and no way to get them home? Going to empty the prisons? How many guards do you think turn up for work when you stop paying them? How about border control? I don't think it's going to be popular with the GOP base when you cease border enforcement and invite anyone who wants to to stroll across our unmanned border checkpoints.

If we cut all funding for "general government", who is going to collect the revenues that you need to pay for all the social security checks and Medicare payments you plan to move out? How long are landlords going to let tenants ride when Section 8 checks don't arrive? Going to let kids sleep on the streets? Is your kid planning to take out a student loan for college this fall? Not any more, they're not. With joblessness going up, you're going to get an earful when unemployment checks don't arrive, and when the mortgage market shuts down because Fannie and Freddie and the FHA stop writing checks. Also, all those laid off state and federal workers are going to make the jobless numbers jump.

To the extent that you fix any of these problems, it means cutting into the sacred four: military payrolls, VA benefits, Medicaid/Medicare, and Social Security. Or defaulting on our debt. Also, when you cut spending, GDP is going to fall, which means that tax revenue will also fall, which means that we probably have to cut even deeper into those politically untouchable programs.

Okay, maybe this will really suck in the short term, but it's necessary to get us on a long term sustainable fiscal path. Uh, what long term? Voters are telling pollsters they're going to blame the Republicans for the shutdown. And the spending cuts you're going to do won't even be that popular with the tea party, who aren't much more enthusiastic about Medicare/Medicaid cuts than the rest of the country. To me that sounds like "huge Democratic victory in 2012". That has implications, not just for the debt ceiling, but for a whole range of problems....The GOP will have taken a chance at meaningful entitlement reform and a mostly-spending budget deal, and thrown it away for literally no gain. Anything you can achieve by simply saying no, [the Democrats] can undo by simply persuading voters not to re-elect you. And the 1996 experience suggests that this will not be hard for them.

Does that mean that I'm shilling for the Democrats and saying you can never cut spending? Hardly. But you cannot cut spending by 40% in the middle of a recession. Throw out any metaphors you have in your head about families or CEOs. The political system doesn't work like that. Neither voters, nor other congressmen, are children or employees who can be dictated to.

If we had to cut spending--if no one would lend us any more money--could we do it? Definitionally, yes. But it would mean an enormous amount of real suffering: homeless families, hungry old people, nursing homes closing their doors to indigent patients. And the fact that we could do it if we had to doesn't mean that we can therefore do it when we don't have to. If you try to artificially create a situation that requires drastic cuts, voters are going to get rid of you, not the spending.

In fact, we wouldn't even have to wait that long. The tea-partiers who are proud to stick to their guns are not actually tough enough to weather the television coverage of homeless families, the doctors regretfully turning away their Medicare patients, the angry constituents beating down their office doors. They'll fold--but not until they've lost virtually all their capital, and have no way to get back in the game.

I know I've said it before, and I'll say it again: there is no game-theoretic substitute for political legitimacy. There is no neat strategic maneuver which will allow you to bypass the American public and cut their government benefits by 40% overnight if they don't want you to. And if you think that the American public actually wants you to do it . . . well, then it's not Washington, DC that's out of touch with the rest of America.