The *Budget Fight* Thread (Jan-Feb-March 2013 Edition)

I was reading something about the deficit reduction that has occured. Simpson-Bowles is said to have $4T in debt savings over 10 years.
There are discretionary caps for spending; which is projected to save $1T (need $3T to hit S-B).
The revenue from tax increases is $600B (still $2.4T short of S-B).

So the question over the debt ceiling is this: I suspect 2014 is finally the year we get the "grand bargain" many are pushing for, and it will include tax reform (and more revenues) plus changes to entitlements. I was reading some of the Senate speechs from Democrats, and it seems like some of the Dem Senators are more willing to tackle entitlements than I previously thought (won't make the left-left happy but neither extreme will be happy).

I would expect Obama to be now saying 1:1 raises in revenue for any cuts, so if the GOP doesn't get any consessions they will be looking at $1.2T even on both sides to get to the $2.4T proposed by S-B. If the GOP is able to get more cuts (like $600B) they changed the equation and it's more like $900B-$900B to get to the $4T.

I've been known to miss on my political guessing games, but I'd bet the GOP tries to punt the debt ceiling to after 2014 elections.

I know that there are a lot of variables but I'd love to see where we would be if Bush never cut taxes and we were still paying at Clinton rates.

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Originally Posted by SpringfieldSkins

I know that there are a lot of variables but I'd love to see where we would be if Bush never cut taxes and we were still paying at Clinton rates.

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and the dot com era never ended..........

Obama can order a $1 trillion coin minted

Coin kept in treasury. Boom, no debt ceiling. **** congress

http://www.cnbc.com/id/43931430/The_...e_Debt_Ceiling

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Originally Posted by chipwhich

and the dot com era never ended..........

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I said... I know that there are a lot of variables.

But it seems to me that it's hard to raise taxes. Just as it's hard to cut funding. We had tax rates and a surplus. We can talk about cutting funding all day long. The fact is that we had higher tax rates and ran a surplus. Bush comes along and all the sudden a tax cut is a great idea because we were running a surplus. Now, here we are, bickering about the smallest of tax increase.

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Originally Posted by SpringfieldSkins

I said... I know that there are a lot of variables.

But it seems to me that it's hard to raise taxes. Just as it's hard to cut funding. We had tax rates and a surplus. We can talk about cutting funding all day long. The fact is that we had higher tax rates and ran a surplus. Bush comes along and all the sudden a tax cut is a great idea because we were running a surplus. Now, here we are, bickering about the smallest of tax increase.

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Yeah well you can raise taxes all you want when the economy is good. When the economy sucks you cant raise taxes.

Bad news for you, but our economy isn't driven by our tax policy. It's driven by the economy.

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Originally Posted by alexey

Yeah I saw that - he's basically saying that Congress spent that money and is now refusing to pay for it. I'm curious to see how far this thing will go, with the GOP saying that Obama spent the money and Obama saying that the Congress spent the money.

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You are exactly correct in your framing of the situation... Except of coarse when Congress say's Obama spent the money, or is looking to spend more money by increasing the debt ceiling... They are refuting the United States Constitution...

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Originally Posted by United States Constitition: Article 1 Section 9 Clause 7

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

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Even if Obama unilaterally raised the debt ceiling to 100 trillion dollars... which arguable he could do under the 14th ammendmdnt to the Constitution...although it would be precident setting.

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Originally Posted by US Constitution: 14 th Ammdendment Section 4

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

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Constititonally he could not spend a dime of it of the funds remaining under the debt ceiling, except to pay back what congress already authorized spent. Only Congress has been granted the power of the purse to raise taxes, and to spend money under the US constition....

Obama is asking for Congress to raise the debt ceiling, not to spend more money, but to pay for what Congress has already spent.

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Originally Posted by SpringfieldSkins

I know that there are a lot of variables but I'd love to see where we would be if Bush never cut taxes and we were still paying at Clinton rates.

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The CBO has produced a document, in which they look at where CBO projected 2012 would look like, in 2001, and what 2012 actually looks like, and attempts to break down how much of said difference are due to which causes.

Here's a link to the CBO's summary page for the document. (There's a link to the entire document, on that page.)

The NYT took the data from that document, and made it into a picture, if you'd rather.

http://upload.wikimedia.org/wikipedi..._2009-2012.png

Short summary: Yes, the Bush tax cuts are part of the reason for our deficits. But they aren't the whole reason. They aren't even the biggest reason. (The biggest reason, is the recession.)

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Originally Posted by twa

The debt rising 60% in 4 yrs not a factor?
Are the tax cuts not now the Obama tax cuts?


Sham is right

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stay true to yourseld dude!
(even if it smells rather turdish)

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Originally Posted by Larry

Short summary: Yes, the Bush tax cuts are part of the reason for our deficits. But they aren't the whole reason. They aren't even the biggest reason. (The biggest reason, is the recession.)

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Well we really can't predict what would have happened had Bush not cut taxes. You can certainly have an opinion, but you really don't know.

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Originally Posted by chipwhich

Yeah well you can raise taxes all you want when the economy is good.

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Yeah I can see it, both parties and the electorate going hey, things are going great, let's raise some taxes now, YAY!!!

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Originally Posted by alexey

Yeah I can see it, both parties and the electorate going hey, things are going great, let's raise some taxes now, YAY!!!

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Clinton did it. .com boom, thriving economy...he raised taxes.

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Originally Posted by chipwhich

Yeah well you can raise taxes all you want when the economy is good. When the economy sucks you cant raise taxes.

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You can cut spending all you want when the economy is good, too.

Yeah, it's true. Raising taxes hurts the economy. And the hurt is magnified, in a bad economy.

The exact same statement is true, about cutting spending.

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Originally Posted by mcsluggo

stay true to yourseld dude!
(even if it smells rather turdish)

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http://http://cdn.pjmedia.com/instap.../bushchart.jpg

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Originally Posted by chipwhich

Clinton did it. .com boom, thriving economy...he raised taxes.

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Yes, he raised taxes in 1993 and then came 1994.

Raising taxes and cutting spending are usually, if not always, politically difficult and risky things to do. We cannot even start this conversation If we cannot get agreement on that.