What should Congress and the President compromise on?

[RetiredGySgt]

The House is willing to discuss increasing revenue, but I have not seen the Senate or the President willing to talk about any real cuts.

What should they discuss?

 

[RetiredGySgt]

Am I right in assuming the Democrats have no intention on compromising? Reid has publicly said so, numerous liberal posters on this board have said so.

I love the claim that elections have consequences, since the Consequence of this election is that a majority of people chose to leave the House firmly in Republican hands.

 

[Wiseacre]

I'll tell you what I think the republicans should not compromise on: not one dime of extra revenue unless and until it is covered with real spending cuts to the tune of at least 3 to 1. Not just in defense spending either, although that should be in the mix equally with everything else. I don't want to see spending cuts in 2020 coupled with tax hikes in 2013; fuck that, the two have to go together, year by year.

As for the democrats, I don't think they're willing to compromise on any real spending cuts. I think they'll push hard for the tax hikes and extgra revenue, as much as they can get, but give up very little on the spending side. And dems and repubs alike will not want to accept cuts that affect their constituents; It's going to have to be across the board with everybody taking a somewhat equal hit. The impact of whatever deal they ultimately come up with cannot be overstated politically or economically; The viability of the GOP is at stake, and so is Obama's place in history. For the rest of us, we could end up in a recession if things go badly o rif the end result is not pro growth.

 

[oldfart]

Am I right in assuming the Democrats have no intention on compromising? Reid has publicly said so, numerous liberal posters on this board have said so.

I love the claim that elections have consequences, since the Consequence of this election is that a majority of people chose to leave the House firmly in Republican hands.

First, obviously I speak for myself alone. Whatever the deal is, the deal is. You are conmingling two questions. The first one is what kind of negotiations will occur and what the final deal will be. This is a political question and I have not the foggiest idea how it will play out.

The second question is what kind of deal MIGHT be struck if the nerds on each side crafted a plan. I do have some opinions on that.

First, there is a little wriggle room on the progressive side on tax rates. A top rate of 39.6% starting at about $400,000 (in the last year it was used, 2000, this bracket started at $288,350 for everyone but married separate filers, and is indexed for inflation) is not engraved in stone. It is possible to modify this in two ways: by choosing a slightly lower maximum rate such as 38% (this makes a difference to the uberrich even if it doesn't to the mere half-million dollar a year job creator) and/or the threshold for higher rates could be increased. Suppose the 36% rate was lowered to 35% and started at $250,000 of taxable income and the top rate was 38% on income over $1 million. I could live with that.

Second, there are important expiring measures in the tax law that matter a lot which could be compromised. For example:
1. the "carried interest" rule which allows equity managers to treat earnings as capital gains
2. the treatment of dividends at the rate of capital gains rather than ordinary income
3. the capital gains rate increasing to 20%
4. the estate tax exclusion reverting to a lower amount and higher rate
5. the alternative minimum tax reverting to 2000 level exemptions.

If I were crafting an offer, I would stick to my guns on carried interest, end capital gains rates on dividends but allow a ceiling rate on dividends of 25% or so (along with a reduction in corporate tax rates to the same 25%), offer to decrease the maximum estate tax rate to 45% and have a $20 million exclusion, and abolish the AMT.

I also would want some middle class tax relief in the measure and a few tax reforms, like:
1. Stop taxing Social Security and unemployment benefits.
2. Abolish the separate taxes for funding the unemployment system and make it a part of the Social Security tax rate structure.
3. Convert itemized deductions into a 25% tax credit.

Now the general impact of these kind of changes and a host of others that seem to be a good idea to me would be to raise taxes slightly on the very wealthy and reduce taxes to the middle class. I don't like the Republican proposal to cap itemized deductions as that throws the $400k true job creator under the bus while not making much of a difference to the very affluent.

OK enough. You get my drift. Let's just try to keep the discussion of political positions separate from what we would like to see happen.

 

[Politico]

I don't care what the Presdient thinks. They need to cut spending. The Dems won't do it.

 

[RetiredGySgt]

Am I right in assuming the Democrats have no intention on compromising? Reid has publicly said so, numerous liberal posters on this board have said so.

I love the claim that elections have consequences, since the Consequence of this election is that a majority of people chose to leave the House firmly in Republican hands.

First, obviously I speak for myself alone. Whatever the deal is, the deal is. You are conmingling two questions. The first one is what kind of negotiations will occur and what the final deal will be. This is a political question and I have not the foggiest idea how it will play out.

The second question is what kind of deal MIGHT be struck if the nerds on each side crafted a plan. I do have some opinions on that.

First, there is a little wriggle room on the progressive side on tax rates. A top rate of 39.6% starting at about $400,000 (in the last year it was used, 2000, this bracket started at $288,350 for everyone but married separate filers, and is indexed for inflation) is not engraved in stone. It is possible to modify this in two ways: by choosing a slightly lower maximum rate such as 38% (this makes a difference to the uberrich even if it doesn't to the mere half-million dollar a year job creator) and/or the threshold for higher rates could be increased. Suppose the 36% rate was lowered to 35% and started at $250,000 of taxable income and the top rate was 38% on income over $1 million. I could live with that.

Second, there are important expiring measures in the tax law that matter a lot which could be compromised. For example:
1. the "carried interest" rule which allows equity managers to treat earnings as capital gains
2. the treatment of dividends at the rate of capital gains rather than ordinary income
3. the capital gains rate increasing to 20%
4. the estate tax exclusion reverting to a lower amount and higher rate
5. the alternative minimum tax reverting to 2000 level exemptions.

If I were crafting an offer, I would stick to my guns on carried interest, end capital gains rates on dividends but allow a ceiling rate on dividends of 25% or so (along with a reduction in corporate tax rates to the same 25%), offer to decrease the maximum estate tax rate to 45% and have a $20 million exclusion, and abolish the AMT.

I also would want some middle class tax relief in the measure and a few tax reforms, like:
1. Stop taxing Social Security and unemployment benefits.
2. Abolish the separate taxes for funding the unemployment system and make it a part of the Social Security tax rate structure.
3. Convert itemized deductions into a 25% tax credit.

Now the general impact of these kind of changes and a host of others that seem to be a good idea to me would be to raise taxes slightly on the very wealthy and reduce taxes to the middle class. I don't like the Republican proposal to cap itemized deductions as that throws the $400k true job creator under the bus while not making much of a difference to the very affluent.

OK enough. You get my drift. Let's just try to keep the discussion of political positions separate from what we would like to see happen.

And you offered NO cuts at all. It is not compromise when only one side gies up everything. Which is the whole point. Republicans are willing to discuss new revenue streams the dems are unwilling to discuss any real cuts. Get the idea yet?

 

[LoneLaugher]

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/ccs.pdf

Something like 4 trillion dollars worth of cuts. Read it.

 

[oldfart]

And you offered NO cuts at all. It is not compromise when only one side gies up everything. Which is the whole point. Republicans are willing to discuss new revenue streams the dems are unwilling to discuss any real cuts. Get the idea yet?

Well I didn't get around to discussing cuts in spending because the current discussion in the news has been a tax deal because that is immediate. If you can curb your snarky, here is where I think the budget can be cut.

1. We can reduce defense spending by at least $100 billion a year without damaging national security.
2. A couple of adjustments to the inflection points in the Social Security benefit formula and adding a fourth tier for benefits in excess of $10,000 per month, combined with a reform of the SSA COLA computation would almost make Social Security permanently solvent. Abolishing the upper limit on the Social Security wage base would finish the job with enough left over to fix the FUTA fund debacle.
3. A single payer universal health care ("Medicare for all") would save tens of billions each year in administrative cost. It could also allow for cost savings from folding civil service health insurance and veterans health benefits into the system. Stop subsidizing health insurance industry waste.
4. Providing free contraception and abortion services would drastically cut medical costs over time. A major study in St Louis revealed that the contraceptive program alone reduced unwanted pregnancies by 80% and abortions by 65%.
5. Ending all energy production subsidies would save about $27 billion per year.
6. Fairly pricing water rights in the West and insisting on market rates for energy development and logging on public lands would also generate several billion per year.
7. The Administration has identified about $40 billion per year that could be saved by eliminating things like duplicate programs, which we have not been able to do because most of them have a Congressman who needs them to get re-elected.
8. End all agricultural subsidies.

So, do these cuts meet your approval?

 

[RetiredGySgt]

And you offered NO cuts at all. It is not compromise when only one side gies up everything. Which is the whole point. Republicans are willing to discuss new revenue streams the dems are unwilling to discuss any real cuts. Get the idea yet?

Well I didn't get around to discussing cuts in spending because the current discussion in the news has been a tax deal because that is immediate. If you can curb your snarky, here is where I think the budget can be cut.

1. We can reduce defense spending by at least $100 billion a year without damaging national security.
2. A couple of adjustments to the inflection points in the Social Security benefit formula and adding a fourth tier for benefits in excess of $10,000 per month, combined with a reform of the SSA COLA computation would almost make Social Security permanently solvent. Abolishing the upper limit on the Social Security wage base would finish the job with enough left over to fix the FUTA fund debacle.
3. A single payer universal health care ("Medicare for all") would save tens of billions each year in administrative cost. It could also allow for cost savings from folding civil service health insurance and veterans health benefits into the system. Stop subsidizing health insurance industry waste.
4. Providing free contraception and abortion services would drastically cut medical costs over time. A major study in St Louis revealed that the contraceptive program alone reduced unwanted pregnancies by 80% and abortions by 65%.
5. Ending all energy production subsidies would save about $27 billion per year.
6. Fairly pricing water rights in the West and insisting on market rates for energy development and logging on public lands would also generate several billion per year.
7. The Administration has identified about $40 billion per year that could be saved by eliminating things like duplicate programs, which we have not been able to do because most of them have a Congressman who needs them to get re-elected.
8. End all agricultural subsidies.

So, do these cuts meet your approval?

So other then gutting defense no real cuts, got it.

As to the claim Obama offered cuts reread it, they are all years after he leaves office, which means never.

 

[saveliberty]

I suggest a scale. One where tax increases are based on acheived reductions with spending in the present.

 

[Trajan]

And you offered NO cuts at all. It is not compromise when only one side gies up everything. Which is the whole point. Republicans are willing to discuss new revenue streams the dems are unwilling to discuss any real cuts. Get the idea yet?

Well I didn't get around to discussing cuts in spending because the current discussion in the news has been a tax deal because that is immediate. If you can curb your snarky, here is where I think the budget can be cut.

1. We can reduce defense spending by at least $100 billion a year without damaging national security.
2. A couple of adjustments to the inflection points in the Social Security benefit formula and adding a fourth tier for benefits in excess of $10,000 per month, combined with a reform of the SSA COLA computation would almost make Social Security permanently solvent. Abolishing the upper limit on the Social Security wage base would finish the job with enough left over to fix the FUTA fund debacle.
3. A single payer universal health care ("Medicare for all") would save tens of billions each year in administrative cost. It could also allow for cost savings from folding civil service health insurance and veterans health benefits into the system. Stop subsidizing health insurance industry waste.
4. Providing free contraception and abortion services would drastically cut medical costs over time. A major study in St Louis revealed that the contraceptive program alone reduced unwanted pregnancies by 80% and abortions by 65%.
5. Ending all energy production subsidies would save about $27 billion per year.
6. Fairly pricing water rights in the West and insisting on market rates for energy development and logging on public lands would also generate several billion per year.
7. The Administration has identified about $40 billion per year that could be saved by eliminating things like duplicate programs, which we have not been able to do because most of them have a Congressman who needs them to get re-elected.
8. End all agricultural subsidies.

So, do these cuts meet your approval?

100 billion a year in dod cuts?Uhm,that's like a 20% cut, thats beyond huge and would literally cripple them.

I don't see raising the payroll limit for FICA, let them means test those receiving ssi over a high threshold.

Subsidies and tax breaks are not the same thing.

Agri, yup, most especially the ethanol subsidy , because that is a subsidy.

 

[AVG-JOE]

The House is willing to discuss increasing revenue, but I have not seen the Senate or the President willing to talk about any real cuts.

What should they discuss?

How about the FACT that We, The Peeps spend 30% more on guns than the next 10 countries combined.

The Military Imbalance: How The U.S. Outspends The World

The only thing dumber is putting it on a credit card.

 

[Trajan]

I would say that what Obama put on the table, deferred entitlement discussion /cuts, 1.6 trillion in revenue, rate changes and no more debt ceiling limit, that's not serious, unless he wants to just make it impossible to reach a deal.

 

[Trajan]

The House is willing to discuss increasing revenue, but I have not seen the Senate or the President willing to talk about any real cuts.

What should they discuss?

How about the FACT that We, The Peeps spend 30% more on guns than the next 10 countries combined.

The Military Imbalance: How The U.S. Outspends The World

The only thing dumber is putting it on a credit card.

And how is say Europe doing with all of that money they no longer used for their militaries after gutting their armed forces in the 90's? Even if we gutted it with a 100 Bn cut like the other guy suggested, fine, so, that leaves a yearly deficit of still more than a trillion.....

The military has actually been cut, new carriers cut from 5 to 2, down to 10 carrier groups, the raptor cut at 180, etc.

 

[uscitizen]

They should compromise on whether to serve turkey or ham.

 

[oldfart]

100 billion a year in dod cuts?Uhm,that's like a 20% cut, thats beyond huge and would literally cripple them.

A 20% cut would return the level of military spending as percentage of GDP to nearer what it was in the Eisenhower Administration. Remember Ike's farewell speech about the military-industrial complex? We currently spend more than the next 10 nations combined. So how much of a defense cut do you think would be acceptable?

I don't see raising the payroll limit for FICA, let them means test those receiving ssi over a high threshold.

We don't have a limit for the Medicare tax, so why not have no limit for OASDI? SSI already is means tested, and quite restictively. As a compromise we could just raise the OASDI limit to, say, $250,000. Would that be better?

Subsidies and tax breaks are not the same thing.

Not exactly, but direct payment subsidy programs and refundable credits are functionally equivalent. You can means test both.

Agri, yup, most especially the ethanol subsidy , because that is a subsidy.

We agree on something! And we are having a civil debate/ discussion/ negotiation without name calling or either of us melting. See, it can be done.

 

[Luddly Neddite]

I don't care what the Presdient thinks. They need to cut spending. The Dems won't do it.

Actually, the D offered the last time and the R refused to accept the cuts. They practically gave away the store last time and the R held the country hostage with their demands. This time, the mechanics are just a bit different and the Ds don't have to bend over backward to make the R happy. Its the R who needs points before the next election or they're gonna lose again.

As for now, the biggest cause of the deficit are the Bush tax cuts. Second is the economy not moving fast enough and third are the costs of two wars started by Bush.

Rs don't want to admit it but that's just fact. Bush was incredibly irresponsible to start two unpaid for wars while also magnanimously handing out tax cuts like they were M&M's

So, the president ended one war and put a stopper on the other. If taxes aren't raised on the top 2%, the economy cannot move. If taxes are raised on the bottom 98%, the economy cannot move.

Its obvious that its time for the top 2% to start paying their way, their share. Again, I know rw's don't like that but its also fact.

 

[Sallow]

Nothing.

 

[Trajan]

I don't care what the Presdient thinks. They need to cut spending. The Dems won't do it.

Actually, the D offered the last time and the R refused to accept the cuts. They practically gave away the store last time and the R held the country hostage with their demands. This time, the mechanics are just a bit different and the Ds don't have to bend over backward to make the R happy. Its the R who needs points before the next election or they're gonna lose again.

As for now, the biggest cause of the deficit are the Bush tax cuts. Second is the economy not moving fast enough and third are the costs of two wars started by Bush.

Rs don't want to admit it but that's just fact. Bush was incredibly irresponsible to start two unpaid for wars while also magnanimously handing out tax cuts like they were M&M's

So, the president ended one war and put a stopper on the other. If taxes aren't raised on the top 2%, the economy cannot move. If taxes are raised on the bottom 98%, the economy cannot move.

Its obvious that its time for the top 2% to start paying their way, their share. Again, I know rw's don't like that but its also fact.

Actually, the D offered the last time and the R refused to accept the cuts. They practically gave away the store last time and the R held the country hostage with their demands. This time, the mechanics are just a bit different and the Ds don't have to bend over backward to make the R happy. Its the R who needs points before the next election or they're gonna lose again.

Not quite-
The debate on the money was close to 800 Bn, not 1.6 trillion, Obama didn't want to Let Reid overshadow him as he , Reid had a deal in the making with McConnell, a better one than obama had, obama went to boehner for more, boehner waked.

 

[Trajan]

100 billion a year in dod cuts?Uhm,that's like a 20% cut, thats beyond huge and would literally cripple them.

A 20% cut would return the level of military spending as percentage of GDP to nearer what it was in the Eisenhower Administration. Remember Ike's farewell speech about the military-industrial complex? We currently spend more than the next 10 nations combined. So how much of a defense cut do you think would be acceptable?

I don't see raising the payroll limit for FICA, let them means test those receiving ssi over a high threshold.

We don't have a limit for the Medicare tax, so why not have no limit for OASDI? SSI already is means tested, and quite restictively. As a compromise we could just raise the OASDI limit to, say, $250,000. Would that be better?

Subsidies and tax breaks are not the same thing.

Not exactly, but direct payment subsidy programs and refundable credits are functionally equivalent. You can means test both.

Agri, yup, most especially the ethanol subsidy , because that is a subsidy.

We agree on something! And we are having a civil debate/ discussion/ negotiation without name calling or either of us melting. See, it can be done.

On an iPad will answer tomorrow.