October 25, 2010

Deficit Destruction

Hatched by Dafydd

Quietly, through backchannel discussions with the fourth branch of the Democratic Party -- the mainstream news, a.k.a., the Ministry of Truth -- President Barack H. Obama has let it be known that in the slim and unlikely possibility that Republicans pick up seats in the November election, Obama plans to refocus his agenda for the next two years; he will prioritize "deficit reduction":

Obama will try to make gains on deficit reduction, education and energy. He will enforce his health care and financial overhauls and try to protect them from repeal should Republicans win control of Capitol Hill. He will use executive authority when blocked by Congress, and steel for scrutiny and investigations if the GOP is in charge.

Now to a Democrat, there are two ways of reducing the deficit: Cutting spending and raising taxes. (To a progressive, there is only one, as the first is in-con-seev-able.) The president assures us he is mulling the mix; but I think we have an inkling which way the Obamic scales are tipping:

While trying to save money, Obama will have to decide whether to bend to Republican and growing Democratic pressure to extend Bush-era tax cuts, even for the wealthy, that expire at year's end. Obama wants to extend them for people making less than $200,000 and married couples making less than $250,000, but a broader extension is gaining favor with an increasing number of Democrats.

Moving to the fore will be a more serious focus on how to balance the federal budget and pay for the programs that keep sinking the country into debt.

So he hasn't budged on letting most of the Bush tax cuts expire. What else is on the president's "deficit-reduction" Christmas list?

Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table just weeks before the deficit commission issues recommendations on policies to pare back with the aim of balancing the budget by 2015.

The tax benefits are hugely popular with the public but they have drawn the panel's focus, in part because the White House has said these and other breaks cost the government about $1 trillion a year....

At stake, in addition to the mortgage-interest deductions, are child tax credits and the ability of employees to pay their portion of their health-insurance tab with pretax dollars. Commission officials are expected to look at preserving these breaks but at a lower level, according to people familiar with the matter.

As the Obamacle says tax breaks for the rich, such as the mortgage-interest deduction, cost the government "about $1 trillion a year," I conclude that is the tax-increase target figure. But perhaps he'll compromise on an increase of only $500 billion per year.

The "deficit commission" referenced above is in fact the National Commission on Fiscal Responsibility and Reform, which Obama created this year (by executive order 13531); it comprises eighteen members, evenly divided: Six appointed from the House, three from each party; six appointed from the Senate, three from each party -- and six tie-breakers appointed by the president.

Obama included "two" Republicans among his appointees: former Sen. Alan Simpson (R-WY), who has a lifetime American Conservative Union rating of 78% (but a 59% in 1995 and a 65% in 1996, his last two years in the Senate); and David M. Cote, CEO of Honeywell... who is listed as a Republican by the White House, but is listed as a lifelong Democrat and close friend of the One in his Wikipedia entry. Go figure.

Obama's other appointees are:

  • Erskine Bowles, Chief of Staff to President Bill Clinton (1996-1998)
  • Andy Stern, former president of the Service Employees International Union (SEIU)
  • Alice Rivlin, Bill Clinton's director of Office of Management and Budget (1994-1996) and longtime member of the ultra-liberal Brookings Institution
  • Ann M. Fudge, a Democrat who sits on the Harvard Board of Overseers, chairs the U.S. Programs Advisory Board of The Gates Foundation, and is a trustee of the Rockefeller Foundation, Brookings Institution, and the Council on Foreign Relations

Eleven Democrats, six Republicans, and one RINO -- there's balance for you! I'm sure they'll soberly weigh the ratio of tax increases and spending cuts in a completely unbiased, down-the-middle manner when they make their deficit-reduction recommendations.

And rest assured, it's not all tax increases; Obama's National Commission on Fiscal Responsibility and Reform does indeed have a number of spending cuts in mind:

The officials are also looking at potential cuts to defense spending and a freeze on domestic discretionary spending.

See, if we could just declare defeat and go home from Iraq and Afghanistan, stop all that wasteful spending on building a security fence on our southern border, and close Gitmo, just think of all the fiscal responsibility!

I don't know about you all, but if the only alternative to huge deficits is to eviscerate our military, kill the mortgage-interest deduction, reinstate the death tax, and drag tax rates back to their former glory in the Jimmy Carter years (top rate -- 70%)... heck, I'd rather have the deficits.

At least until January 20th, 2013, when our national nightmare ends.

Hatched by Dafydd on this day, October 25, 2010, at the time of 1:28 PM

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