Because the sequester is (and is likely to continue to be) very ill-defined in the minds of most Americans, the politics of it will devolve into a popularity contest between the major players. Which gets us to the fact that Obama is at (or close to) his high-water mark in terms of job approval, while Congress sits in political reporter/used car salesman territory.The Washington Post’s Chris Cillizza, theorizing that there’s no way possible way Congress can win the sequester battle against President Obama. The thinking here is is based on three premises: One, that Obama believes the sequester ultimately will not be avoided, because Congress is dysfunctional and if they could have struck a deal on these cuts, there wouldn’t have been a sequester to begin with; two, that effects of the sequestered cuts will be felt by many Americans once they come into effect; and three, that Obama is significantly more popular than Congress. Given these three assumptions, it seems reasonable enough to conclude that if the sequester happens, Congress—and the GOP-led House of Representatives—will be blamed by the American public. It’s not a bad theory, though it’s still quite speculative given the assumptions. More information on the sequester here. source
One of the touted benefits of “Plan B” is that it only raises taxes for those making $1 million or more. As Eric Cantor said this morning, the plan would raise revenue “without hurting many small businesses” or taxpayers.
But a closer look at the tax impacts of Plan B shows that while it raises taxes on most million-plus earners, it also raises takes for many low-income earners.
According to the Tax Policy Center, the tax code adjustments contained in Speaker Boehner’s ‘Plan B’ proposal would only bestow a tax cut on those making between $200,000 and $500,000 annually. Worse, approximately 20 percent of those making $20,000 or less will see their taxes increase by $1,070 - an increase of at least five percent for each taxpayer.
We have to continue to grow our economy — we need to grow it from the middle class out. Millionaires and billionaires — they don’t need a tax cut. They’re not struggling in this economy. They’ve done well even as the middle class has shrunk.Obama campaign senior adviser Robert Gibbs • Speaking about the president’s upcoming speech, where he’s expected to push for an extension of the Bush-era tax cuts on those making less than $250,000 — but no extension of the tax cuts on levels above that. (The long-term goal is to make them permanent, as he’s pushed in the past, but this is for one year.) This is likely to make Republicans ticked, because they want the cuts extended for everyone. But if they can’t figure out how to handle this by January 1, the cuts will be cancelled for everyone. What are the odds that this will be dragged out until December 29th?
» Good news for Democrats: GOP leadership has indicated that they’ll pass a 10-month extension of the payroll tax without any offsets in spending. Democrats had wanted to balance the tax cut, in part, with higher taxes on the rich; Republicans wanted to do so, in part, with cuts to unemployment benefits. Ultimately, they couldn’t agree, and so it will be passed with no offsets at all. Why is this good news for Democrats? Well, the GOP took a hard-line against the payroll tax cut—which largely benefits the middle-class—last December, making the once-benign policy a partisan issue. Democrats, by and large, were okay passing it sans offsets—the suggestion to pay for it via tax cuts on the rich was more a general effort to increase taxes on the rich—and so the fact that the extension is going to pass is a political and legislative win for Democrats. But the extension expires in ten months—right around the presidential election—so this fight is only over in the short-term.
There is broad agreement on doing the payroll tax holiday through the end of the year … The problem is paying for it. … (Democrats) just don’t want to cut any spending. That is what made it problematic. But we will get it done. We will get it done before the end of February.Senate Minority Leader Mitch McConnell • Emphasizing that the payroll tax cuts that proved a thorn in the GOP’s side back around Christmas will get extended through the new year, no matter how many arms McConnell has to twist. The thing is, though, he’s not the guy who has to do the hard work. It’s Boehner in the House, who pissed off his rightward-leaning members by ignoring their wishes to score a deal. However, even Boehner is confident: “I’m confident that we’ll be able to resolve this fairly quickly,” he said. The tax cuts expire at the end of February, but there’s no word on how they plan to pay for this. source (via • follow)
The GOP lost one. The tell-tale signs were everywhere. On a day where John Boehner lost support from the GOP establishment on blocking a payroll tax-cut plan — which mind you, was just for two months, and otherwise would’ve been a big GOP victory because of the Democratic concessions made — the political kayfabe finally gave way to inevitability. Here’s how it went down. (Photo by Gage Skidmore, that guy who takes all the GOP politician photos on Flickr)
That’s what he says in a new op-ed column: ”The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass,” he writes. “This is no easy double play.” He also suggests that Republicans in Congress might have helped hand Obama an early 2012 victory. When you’ve lost Rove, you know you’ve messed up pretty badly. source
» Those who refinance will feel the pinch, too: To help pay for the $33 billion cost of the extended-by-two-months payroll tax cut, the federal government will increase the cost for homeowners to get their homes insured by Fannie Mae and Freddie Mac, who currently back nine out of ten home mortgages in the U.S. The fee, currently around 0.3 percentage points, would jump by 0.1 percentage points, which translates to roughly $17 per month for most homeowners. However, this fee would not affect current homeowners unless they refinance starting next year. Is this the best way to handle the extension?
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» Hitting the road: A group of OWS protesters have embarked on this lengthy walk, expecting to arrive in Washington DC on November 23rd, the congressional committee deadline on whether to keep the Bush-era tax cuts extensions President Obama agreed to last year. The Occupy movement, obviously, would like to see these cuts expire; while this would raise the tax burden of middle-income Americans to a remote extent, it would also cause a very large influx of revenue from the class most buoyed by the Bush tax policy — that vaunted 1%. The march consists of a mere dozen or so protesters right now, but they expect (we suspect rightly) to gain large numbers as they work their way towards the capitol.
The money has to come from somewhere. So why not the rich? “We are not going to have a one-sided deal that hurts folks that are most vulnerable,” he says. Let’s see what he says in six months.
(Source: CNN)
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