Tax reform should top federal agenda

January 30, 2011


— While I was out ill for six weeks in December and January, the world changed. Before that, the White House had badly misjudged the political climate. When I went to Ohio with Vice President Biden, he did his best to ignore the evidence of economic pain, giving a pep talk to skeptical factory workers and telling me and other reporters that he believed Democrats would retain their majorities in both the House and Senate.

The election rout came as a shock to President Obama and his administration. But Obama took the lesson and acted promptly. The first step in moving back to the center was to liberate himself from his dependence on Nancy Pelosi and Harry Reid and cut his own deal with Mitch McConnell, the Republican minority leader of the Senate. In return for a temporary extension of the Bush tax cuts, Obama got not only big pieces of his own economic agenda but approval of the arms treaty with Russia and the termination of “don’t ask, don’t tell.”

Thus fortified, he began to repair the White House, giving it a distinctly Clintonian cast. He had already hired Jack Lew, a skilled negotiator, as his budget chief. He brought in my friend Bill Daley, a politically savvy operative with strong business and banking ties, as chief of staff, and Clinton administration veteran Gene Sperling as his top economic adviser. Liberal Democrats fretted but the vibes from Washington to Wall Street were good.

Then fate intervened. The Tucson massacre provided the kind of occasion when all of the American people turn to the president to express their horror and grief but also their determination to reach out to each other and recover. As Ronald Reagan and Bill Clinton had done before him, Obama did not disappoint. His address to the memorial gathering reminded everyone why his voice had been cherished during the 2008 campaign — and why they might want to keep it in the White House.

Everything was cued up for the recovery process to climax at Tuesday’s State of the Union address. It played well with the public, with its invocations of bipartisanship and its bursts of economic optimism. But it lacked a centerpiece.

Obama called this a “Sputnik moment,” but offered no such ambitious enterprise. The one I had hoped he would choose is the overhaul of the tax code, which could pay multiple dividends.

I also hoped Obama would talk about closing special-interest loopholes, technically known as tax expenditures. Erskine Bowles and Alan Simpson, co-chairmen of the president’s debt commission, had spotlighted the remarkable fact that $1 trillion a year disappears from the Treasury because of these loopholes.

Recovering those funds ought to be at the top of the economic agenda. Big chunks of them are embedded in two pots that have broad public support — the mortgage-interest deduction and the tax exclusion for employer-provided health insurance.

But at least half of that $1 trillion is steered to favored special interests.

Think what recovering $500 billion a year would mean. If you used half of it to reduce individual and corporate tax rates, as Republicans would like, you would give a huge shot in the arm to economic recovery and job growth. If you used much of the rest to bolster education and alternative energy, and repair infrastructure, as Democrats wish, you could actually do those things without deepening the deficit. And you could even set aside $100 billion to reduce the national debt. What a great message that would send abroad — that the U.S. is serious about ending its economic tailspin.

I wanted to hear Obama urge Paul Ryan, the new Republican chairman of the House Budget Committee whose intellectually ambitious ideas have enlisted bipartisan interest, to meet soon with Kent Conrad, the retiring Democratic chairman of the Senate Budget Committee who well knows the arcane recesses of the tax code. Together, those two could provide an agenda and a strong nudge to the respective tax-writing committees. And I have to believe the big freshman class of legislators would welcome the opportunity to do what no predecessors since another politically divided Congress, prompted by Ronald Reagan, James Baker and the late Dick Darman, and Democratic Sen. Bill Bradley, had done in 1986: clean up and simplify the tax code.


just_another_bozo_on_this_bus 7 years, 3 months ago

"The first step in moving back to the center"

Moving back to the center? That would have meant a shift to the left, and that certainly didn't happen.

just_another_bozo_on_this_bus 7 years, 3 months ago

Heh, that's a good one.

Obama campaigned from a center-left position, but governed somewhere between center-left and center-right. His center-left positions were mostly symbolic, and had minimal effect on actual policy. His actual policy initiatives were center-right, and nothing exemplifies that better than his policies on healthcare, the war machine and towards Wall Street. And those are the major things any president has to deal with.

just_another_bozo_on_this_bus 7 years, 3 months ago

Obama and the Democrats lost because they failed to fully reversed the collapse of the economy that Republicans are largely responsible for creating (although they had plenty of help from Wall Street Democrats.)

Of course, the whole economic system is a house of cards, and there is no quick, easy fix possible.

But in our political system, there are only two choices, both of them bad, both of them corrupt. Just because the pendulum made a quick change back to Republicans doesn't mean we'll get anything other than the same idiocy they gave us the last time around. And they won't.

tomatogrower 7 years, 3 months ago

And that's why McCain chose Palin to be his running mate. The Republicans did not want to win the last presidential election, and have to clean up the inherited mess.

Mari Aubuchon 7 years, 3 months ago

Yes sirree, Bozo! He has certainly shown himself to be center-right.

Scott Drummond 7 years, 3 months ago

As evidenced by the extreme dissatisfaction with the President's performance of those who are truly on the left. As well as the President's proclivity to take regular jabs with those on the left.

Boosh 7 years, 3 months ago

To Ms Whitney, Matthew Lyons was a confederate soldier :)

Thinking_Out_Loud 7 years, 3 months ago

Are you sure? I thought he was in the U.S. Army during the Mexican-American War.

Boosh 7 years, 3 months ago

Could be, could be U.S. Army but he also could of been U.S.M.C.

Scott Drummond 7 years, 3 months ago

I think Mr. Broder's long illness must have further addled his poor old brain.

So the first step in the President's supposed move to the center was getting big pieces of his economic agenda, the termination of DADT, and an arms control treaty passed in the lame duck session by cutting a deal directly with an inexplicably agreeable Mitch McConnell?

It seems to me that it was Mr. McConnell who gave quite a bit of ground in order to achieve continuation of the ruinous bush tax cuts for his wealthy patrons.

Scott Drummond 7 years, 3 months ago

"The election rout came as a shock to President Obama and his administration."

This is, I believe, the first lie of this column & I thought it should not go without mention.

Anyone who followed politics was not "shocked" by the midterm election results. The corporate mainstream media propaganda machine had been trumpeting right wing gains for months prior to the election.

Scott Drummond 7 years, 3 months ago

Consider it odd, if you wish. Most who follow politics are not at all surprised by the whistling past the graveyard approach immediately before an election and understand that politicians must guard against the success of a media campaign to discourage their supporters from voting such as we witnessed before these midterm elections.

just_another_bozo_on_this_bus 7 years, 3 months ago

What mlyon does is arrive at whatever he wants to believe, and then scour for any tidbit that might support it (even if whatever point he's trying to make is pretty meaningless) while ignoring whatever mountains of evidence may indicate otherwise.

Before an election, all politicians are going to assert that all is well, and that their team is going to do just fine. (Coaches and players do the same thing before a big game, even if they probably don't have a good chance of winning.) Just because in their public statements they expressed optimism doesn't mean the behind closed doors Biden, Pelosi, Obama, et all, weren't fully cognizant of what the polls and the media were saying in the run up to the election.

Scott Drummond 7 years, 3 months ago

No, they needed to rally their supporters in the face of the right wing propaganda campaign.

Scott Drummond 7 years, 3 months ago

No, I am saying one of the key premises of Broder's argument is based on a lie. I don't put much stock in the opinions of liars.

Scott Drummond 7 years, 3 months ago

To be able to help point out the flawed analysis of his opinion pieces.

You're welcome

Scott Drummond 7 years, 3 months ago

Thank you. Enjoy your continued ignorance.

jafs 7 years, 3 months ago

I'd love to see your list of honest politicians.

sr80 7 years, 3 months ago

all anyone had to do either hater or zealot was watch that arrogant @#$*! pelosi after getting the health bill passed.that was enough for me not to vote democrat.

jafs 7 years, 3 months ago

Oh come on.

His point is good - many people watch stupid shows.

And it wasn't a partisan attack, which is refreshing.

just_another_bozo_on_this_bus 7 years, 3 months ago

Watching the occasional stupid show isn't necessarily bad.

Neither is eating junk food. But if your entire diet consists of junk food, it's definitely unhealthy.

And, sadly, too many Americans have a very unhealthy diet of exclusively stupid shows.

Scott Drummond 7 years, 3 months ago

Isn't this what you want, Tom? Consolidation of media programming in to the hands of 3-4 media conglomerates which decide what people watch.

jafs 7 years, 3 months ago

If people don't watch the shows, they'll be canceled - it happens all the time.

Can't blame the success of shows like Jersey Shore on media consolidation.

And, why attack TS when he makes non-partisan comments - that hardly encourages the practice, don't you think?

Scott Drummond 7 years, 3 months ago

Tom regularly parrots the right wing talking point about liberal mainstream media bias and the supposed harm the liberal media agenda visits upon us. I enjoy pointing out his error.

I do, indeed, blame shows like Jersey Shore on media consolidation. When control of media programming is consolidated in the the hands of a few huge media conglomerates, the risk of such lowest common denominator and low cost programming is increased. Such stupidity encouraged in our culture begets more and more of the same.

jafs 7 years, 3 months ago

Well, I think you're wrong about media consolidation.

It's a bad thing, in my opinion, but isn't responsible for individual decisions.

And, if you continue to attack Tom when he makes non partisan substantive posts, he won't continue to do so, which I'd like to see.

Scott Drummond 7 years, 3 months ago

I think the media is largely responsible for the degredation of our political process over the last 20 years or so, and the control of the mainstream media by fewer and fewer corporate interests who offer worse and worse programming has not been a positive development.

I applaud Tom for his nonpartisan disgust at Jersey Shore, but remind him of its cause, that's all.

jafs 7 years, 3 months ago

Perhaps - I agree that media consolidation is not a good thing.

However, network programming depends on how many people watch shows, and thus on how much advertising revenue they can generate.

So, bad programming is a result of enough people watching bad shows, and enough people being influenced by advertising.

Neither of which are the fault of media consolidation.

Richard Heckler 7 years, 3 months ago

  1. If Democrats tried to pass something without Republican input, Republicans filibuster.

2.If Democrats tried to pass something with Republican input, Republicans filibuster.

3.If Republicans propose legislation and Democrats agree to it, Republicans filibuster.

The Senate has become the place where legislation passed in the House—even legislation with bipartisan support—goes to die.

If the middle class would boycott all spending except for absolute necessities for sixty days Wall Street would tumble and the white collar folks would wake up..... so would congress.

The middle class could take control!

Scott Drummond 7 years, 3 months ago

And next week, in a very special episode, Gretchen goes shopping for short skirts so she can show off her talent as a morning news reader.

just_another_bozo_on_this_bus 7 years, 3 months ago

People like to watch wrecks. That's why NASCAR and the NFL are so popular.

Paul R Getto 7 years, 3 months ago

Here's the solution: 10% tax on all incomes above 50,000. You make 50, you pay five. You make a million, you pay 100,000. You make a billion, you pay 100 million. That, plus a 10% VAT tax on anything other than prescription drugs and basic foods targeted to the national debt should work over a period of years. The only problem: Lawrence's streets and many other communities would be littered with unemployed tax specialists and IRS attorneys who would be shaking their empty coffee cups begging for spare change. PS: It would help to end BS and pointless wars. The 200 billion the Tea Party wants to cut immediately just about equals the amount we pound into the sand in Afghanistan each year.

just_another_bozo_on_this_bus 7 years, 3 months ago

If we cut the defense budget by 80% and instituted a single-payer healthcare system, this might work.

just_another_bozo_on_this_bus 7 years, 3 months ago

One thing you left off your list is that these immigrants pay more taxes in than they get benefits out.

pace 7 years, 3 months ago

Great post, almost credible, until you fall apart when cornered and call names like a grade school bully. You could look at a variety of sources and come up with a reasoned and researched argument that people would not tease you about. Don't feel shame feel inspired, go for facts not crap.

pace 7 years, 3 months ago

Oh you little wing nut whaco, I meant what I said. oops. What I said was research, do a coherent argument and can the silly name business.

pace 7 years, 3 months ago

Well, maybe you can't bring it up a notch, sorry.

pace 7 years, 3 months ago

Lets will go one sentence at a time.
No. I don't disagree with all your points even if they were incoherently made. There are incredible costs to America tax payers and working families, more than you have considered. You solutions are inadequate and unlikely to be effective, I am guessing what solutions you are proposing. That was a bit unclear. My criticism is when the weakness of presentation was brought forward you reacted like a cornered child with inanities and name calling. I suggest you try to bring it up a notch. That type of posting is one of the reasons people think tea party is full of ranting fools. I consider the ideas of unbalanced budget, deceptive and inefficient government, the mire of the tax system to be part of the issues the "tea party" would like to see addressed. Valid issues. So if you have points to make, make points, not , well, personal remarks.

pace 7 years, 3 months ago

Still having a little problem with what "up a notch" might mean. MMMM You are correct on one point. i am criticizing you for lack of content. Make some point in argument, the ranting isn't cool man.

tomatogrower 7 years, 3 months ago

The president's debt commission came up with some really good solutions, but they will never fly, because of the gutless career politicians whose only concern is getting reelected. Want to keep campaign promises? Follow this commission's recommendations, and if you don't get reelected, so what, the budget will get balanced, and the debt with be diminished. If the solution works, then you will be hailed as a hero, and probably reelected later. But gutless wonders and puppets are the only people we elect to office, Democrat, Republican, or Tea Party. I'm going to start a new party called the People with Guts party.
There is also no one more gutless than the fake patriots who sport a yellow ribbon "Support the Troops" bumper sticker, but don't want to give up their vacation to help pay for the war, that they are so gungho about. God forbid they would have to drive a small economy car, instead of the nice Lexus SUV. Sorry, that's my rant for the day. I see a couple of vehicles like this every week, and it just grosses me out. I'm going to take a deep breathe and get back to work.

Scott Drummond 7 years, 3 months ago

While I applaud your sentiment, I am afraid you will witness such courage in few politicians. And those that do take such courageous steps will be quickly defeated by the powerful interests alligned with the continued exploitation of taxpayer funds. The answer is to convince the people to more carefully and thoughtfully lead the politicians to better actions. Politicians are mostly conmen and charlatans. We must demand the change we seek and force their actions.

JackMcKee 7 years, 3 months ago

Assume the average deduction for property taxes and mortgage interest is around $12,000 per year, and that translates into about $4,000 of tax savings. What rational person would trade $4,000 for not having to buy a $30 piece of software and a couple hours filling out a form each year? The answer is, nobody.

So your plan hurts property owners.

You also say that you want the poor people to spend the time and resources it takes to collect a year's worth of receipts and file those to get a refund of money they've paid all year long in sales taxes they couldn't afford in the first place. That's fair.

Your plan does nothing to limit special interests lobbying for exemptions and deductions from the sales tax.

You still need an IRS to enforce the sales tax. You still have lots of people filing tax returns. You have taken money out of a lot of other taxpayer's pockets.

So who does this sales tax plan benefit?

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