Archive for Saturday, December 1, 2012

Simons’ Saturday Column: Stakes are high in the current federal tax debate

December 1, 2012


“Lame duck” legislative sessions, facing tight time deadlines, whether at the state or national level, do not provide the best political environment in which to conduct serious discussions or shape long-lasting laws and policies.

Those serving in the U.S. House of Representatives and Senate have known for years that if the 2001 and 2003 federal tax provisions are not extended and a variety of other tax provisions are allowed to lapse, the nation and most of its citizens face the likelihood of plunging over a “fiscal cliff.”

According to the Tax Policy Center, a joint venture of the Brookings Institution and Urban Institute, 90 percent of American households will face higher taxes in 2013 if Congress and President Obama are not able to agree on a deficit reduction plan.

Tax increases are scheduled to come about because the various tax cuts were approved on a temporary basis due to end on Jan. 2, 2013, roughly four weeks from now.

The American public, as well as the welfare of the nation itself, now are in the middle of a massive political game with President Obama, a number of Democratic senators playing hardball and the Republican-controlled House.

The debt crisis and how to keep the economy afloat are the critical issues. Obama and his fellow Democrats say the first step in trying to solve the problem is to raise taxes.

Republicans say they, too, want to help bring about a solution, but that if taxes are to be raised, there must be an even greater level of cuts in federal spending to make a meaningful dent in the growing national debt.

Democrats say tax hikes must be approved this year and that any cuts in federal entitlement programs will be put off until sometime next year. Republicans say “no way” and that federal spending cuts must be detailed before they OK tax hikes.

Neither side wants to budge, although all lawmakers realize they must take reasoned, positive action to avert a very serious situation. The big question is whether this “serious situation” is sufficiently serious to force the various players to cut a deal that meets opposing viewpoints somewhere in the middle.

Unfortunately, this all is taking place after a heated presidential campaign, and the fallout from the election certainly is playing a big role.

Obama and his followers in the Senate won the White House for another four years and retained their majority in the Senate. To the winner belong the spoils, and they see no reason they should have to compromise on how they intend to avoid falling off the fiscal cliff. They want tax hikes now and say they will consider spending cuts next year.

Republicans still control the House and, due to Obama failing to measure up on many promises and pledges he made in his 2008 election bid, along with the adamant stance of 30 or more Democratic senators saying they will not agree to any cuts in major federal entitlement spending programs, it is difficult for GOP House members to agree to tax increases at this time and accept a good-faith proposal by Democrats to consider spending cuts next year.

Some might fear the Democrats offer a bait-and-switch proposal. Others might suggest Obama believes this is the time to force the issue and, in the process, crumble any GOP unity in the House.

Also, the manner in which Democrats are staging this battle could be a tip-off to how they intend to conduct affairs for the next four years in partisan legislative battles and the use of executive power.

If Obama is able to split the GOP in this debate, there is every reason to believe he will intensify efforts in future contentious legislative negotiations. He has said he intends to change America and obviously plans to follow through on this pledge. He is on the attack on the tax hike issue, scheduling campaign-style stops around the country to rally support for the Democratic plan and urging citizens to flood the offices of GOP lawmakers with calls for them to approve his tax plan.

Now is not the time to play chicken or see which side is the first to blink.

Granted, Obama won the presidency and, again, to the victor belong the spoils, but there are times when it seems much more can be accomplished when a winner tries to come close to meeting the wishes of those who didn’t win.

Such an approach often pays off in the long run and for the benefit of all parties.

It will be interesting to see whether Democrats continue to try to win a knuckles-down arm wrestling contest or offer a genuine compromise that is best for the country.

Unfortunately, it appears the game rules have been set by Obama, Sen. Harry Reid, Rep. Nancy Pelosi and the 30 hard-core Democrats who say they will not budge on any entitlement cuts.

Once more, to the victor belong the spoils, but consider what the “spoils” may be in this case.


Richard Heckler 5 years ago

  1. Mergers = jobs and industry gone
  2. Hostile Takeovers = jobs and industry gone
  3. Leveraged Buyouts = jobs and industry gone
  4. Free Trade Agreements = jobs and industry gone
  5. Reagan/Bush Savings and Loan home loan scandal which killed the economy and cost the USA millions of jobs.
  6. Bush/Cheney Home Loan scandal killed the economy and cost the USA millions of jobs

All of above ultimately supply side economics translate into millions upon millions upon millions of USA job losses. Big time layoffs are the end result. These jobs go abroad with tax codes that prevent taxation on profits made abroad from USA big name corporations.

There was a time when becoming employed by corporate America came with long term employment, fine wages and dependable retirement benefits. Those days are gone.

Considering repubs have been against any type of new job creation after a 4 year degree one might consider a Vocational-Technical Institute to become a highly skilled technician in some field. This will make any college grad more marketable and perhaps open doors to self employment. It is unlikely that there will be enough jobs for college grads anytime soon.

Or if one has the dollars becoming a career student is as respectable as any other job.

Richard Heckler 5 years ago

The GOP is dead so what to do?


--- put people back to work fixing the nations highways and bridges.

--- put more funding directly into public schools and hire more teachers ( bypass the state legislatures).

--- implement Medicare Single Payer Insurance which is estimated to save $400 billion annually while creating 2.4 million jobs. Move all government employees into this STAT and watch the cost of government and public schools drop significantly.

--- all of the above will create millions of more jobs BUT we must invest in jobs that cannot be outsourced.

--- let the Bush tax cuts hit the road BUT save the middle class tax cuts. Middle class spending
is more likely to create jobs due to larger population numbers of the 99%

--- Bring on the Robin Hood Tax

--- vote out more and more of the new anti american right wing party members who are now posing as republicans. They are frauds.

If the nation is stuck on a two party system those two parties might should be the Green Party and the Democratic Party. At least the nation could have some "working together" yet with plenty of debate.

The more often Kansas votes in the same faces the less opportunity for significant change. Sending back the same faces tells those faces that political election corruption is still okay.

Sam Brownback is one perfect example of why we need to send career politicians home.

woodscolt 5 years ago

Dolph is too blind to see as usual. Every since the tea party republicans were elected to congress and inflicted their "our way and our way only" policy and are just to stupid to realize that rarely do you get only your way in politics, the congress has been gridlocked. Leave it to the wisdom of the dolphster to read that as....

..."President Obama, a number of Democratic senators playing hardball"....

Once again dolph has proven he has no journalistic creditability or integrity with his to blind to see mentality. Oh, by the way Dolph, did you notice who won the last election? Or did that slip by you as well.

Briseis 5 years ago

"our way and our way only"

Oh, by the way Dolph, did you notice who won the last election? Or did that slip by you as well.

lol... Psychological projection as its finest....spike the football much?

This reminds me of the Democrat convention, -spike the football event-, parading bin laden's death continuously and blaming Benghazi murders on an obscure movie a couple hundred Muslims may have seen 8 months prior the attack.

/nanny nanny boo boo, we won and you didn't, so there!!

jafs 5 years ago

Come on folks - if it's true that D are saying tax hikes now, spending cuts later, that's a bad idea.

We need both, and they should both be part of any deal made now, before the cliff comes, I think.

Why should R trust D to come up with spending cuts later, when they know D don't really want those?

just_another_bozo_on_this_bus 5 years ago

In the midst of a recession, we don't need spending cuts as that will only fuel the recession, which will cause a further reduction in revenues coming into government coffers.

But we do need different spending-- spending that will stimulate the economy by doing the things necessary to remake it for 21st century realities.

Throwing the most disadvantaged of us under the bus just to reduce spending has only one purpose-- to increase their suffering in order to continue the steady redistribution of wealth to the already wealthy.

jafs 5 years ago

Even Obama says the debt issue is a "medium term" problem that needs to be fixed, and that increased revenue and decreased spending are necessary to fix it.

Why should R trust that D will do that, if they keep putting off the spending cuts, and demanding tax increases?

And, given the outrageously high spending at the federal level, I'm sure there are ways to cut that without "throwing the disadvantaged under the bus".

Obama's proposal that I just read claims to offer a 4.4 trillion reduction in the deficit over ten years. That equates to about half a trillion each year, which leaves about the same amount (if not more) in deficits. So, even though it decreases annual deficits, we're still increasing the national debt by 5 trillion dollars (or more) over ten years.

That's just not good enough for me - we need to be at least stabilizing the national debt, and preferably paying it down.

If the feds actually followed Keynesian principles all the time, it might be ok - that way they'd build up a surplus in the good years, and use it in the bad ones, so it wouldn't involve massive debt. But, they just don't do that.

just_another_bozo_on_this_bus 5 years ago

The debt projections of a decade or two out are completely irrelevant if global warming/climate change aren't seriously addressed, as the world economy will be completely destroyed by it.

jafs 5 years ago

That's called "shifting the goalposts".

Everything's meaningless if we destroy ourselves in a nuclear WWII as well.

just_another_bozo_on_this_bus 5 years ago

True enough. A serious effort at eliminating nuclear weapons (unlike the charade we currently have) is essential, as well.

But the deficit/debt issue is nothing but a deadly distraction if it keeps us from addressing the very large killer elephant in the room that really will kill us, unlike the abstraction we are currently obsessing over.

jafs 5 years ago

I think they're all issues.

And they should all be dealt with appropriately.

just_another_bozo_on_this_bus 5 years ago

I agree, but I would also throw in that they should be dealt with in a way that recognizes their relative importance and urgency. With that in mind, I'd say the deficit resides way down the list.

msezdsit 5 years ago

cut military spending. bingo. fixes the problem. We don't need to be able to blow something to smithereens and then come back and blow it up another 1000 times after it is already blown up but thats what we are paying for now while blowing up grandma as collateral damage in the process. Military spending is so far out of necessary proportion and it is just big business for the rich get richer fraternity.

jafs 5 years ago

I agree that military spending should be cut, but I'm not at all sure that fixes the deficit issue, unless we cut huge amounts - we're currently running deficits of about $1.5 trillion each year.

And, also, even those cuts will affect people negatively - there are lots of folks working at jobs for the military, and businesses supplying them, etc. If we just cut the military, where will all those people work?

just_another_bozo_on_this_bus 5 years ago

Dolph exhibits yet again the Republican definition of compromise-- "It's our way or no way at all."

Paul R Getto 5 years ago

"Granted, Obama won the presidency and, again, to the victor belong the spoils, but there are times when it seems much more can be accomplished when a winner tries to come close to meeting the wishes of those who didn’t win."

Huh? W claimed a mandate on a narrower victory in 2004. The TP crowd needs to grow up.

deec 5 years ago

The debt ceiling has been raised 76 times since 1917. It is political posturing to pretend this is a new problem that began when Obama took office.

February 2010 - $14.294 trillion

December 2009 - $12.394 trillion

February 2009 - $12.104 trillion

October 2008 - $11.315 trillion

July 2008 - $10.615 trillion

September 2007 - $9.815 trillion

March 2006 - $8.965 trillion

November 2004 - $8.184

May 2003 - $7.384 trillion

June 2002 - $6.4 trillion

August 1997 - $5.95 trillion

March 1996 - $5.5 trillion

August 1993 - $4.9 trillion

JackMcKee 5 years ago

And there it is. My week is now complete. Thanks Dolph.

Phillbert 5 years ago

If it's Saturday, it must be Dolph ranting about either KU or Obama. I see it's Obama's turn this week.

beatrice 5 years ago

So name the cuts desired. Republicans need to state how much they want to cut Medicare, Medicaid and Social Security, then go back home and face the people they represent. Obama shouldn't be the one offering up cuts, but he should consider those put forward. If Republicans only want cuts in social programs but no cuts in military spending, then they aren't to be taken seriously.

Republicans act as if they are entitled to have the temporary tax cuts extended forever. What part of "temporary" do they not understand and what is with this entitlement mindset?

Alyosha 5 years ago

Mr. Simons writes, "Obama and his fellow Democrats say the first step in trying to solve the problem is to raise taxes."

Mr. Simons knows, or should know, apparently being an educated individual with access to accurate information, with a quick, honest appraisal of the issues easily available in a number of news sources and statements by the President, that this is not actually the case. Yet, given a choice between accuracy and fairly portraying the President's positions, and repeating sloppy thinking and partisan-motivated mischaracterizations, Mr. Simons takes the unethical and dishonorable path of asserting falsehoods.

Until Mr. Simons can see beyond his own misunderstandings, stop asserting falsehoods, and apprehend honestly the actual state of affairs, his opinion is worthless, and he is shown to favor dishonorable falsehoods over truth.

That kind of thinking is exactly why Republicans, like Mr. Simons in their inability to argue honorably or ethically, were rejected by the American people in terms of the popular vote at the polls.

Get out of the way, Mr. Simons, if all you bring to the table is dishonorable practices.

yourworstnightmare 5 years ago

Mr. Simons, you should stick to bashing KU.

voevoda 5 years ago

Mr. Simons, I think you have forgotten the history of President Obama's first term. He started out intending to be a bipartisan president, trying to include Republicans in the process of designing ways to deal with the disparity between income and government expenditures. But he found the Congressional Republicans to be so intransigent, so focused on making him a one-term president, that they used every parliamentary subterfuge to prevent concerted action on the Federal budget (and everything else). The best that President Obama could get out of them was a stop-gap--the "fiscal cliff" we are now facing. Republicans agreed to it because they believed that the 2012 election would give them control of the government--House of Representatives, Senate, and White House, and then they could avert the "fiscal cliff" on their own terms. But the voters didn't agree to give the (far right wing) Republicans control of the government.

So it's the Republicans who created this situation, and that means that it is their responsibility, first and foremost, to make the compromises they should have made earlier, to avoid the creation of the "fiscal cliff" in the first place. The country is watching: will Republicans destroy the economy of the United States in order to deny Obama a positive legacy, as Charles Krauthammer recommends in his op-ed piece today? I hope, Mr. Simons, that you don't advocate the same.

beatrice 5 years ago

Your doomsday prediction is likely to be as accurate as your presidential election predictions. You were likely saying you would stay out of stock market until it fell to 3000 for the same reasons, all while blaming Obama.

Briseis 5 years ago

Obama is already tapping into the natural gas market. China needs coal. The country has plenty of both to sell to foreign markets. Those markets alone will offset the debt and pay for the 47%'s needs.

Lawrence is a government town. It will do just fine.

just_another_bozo_on_this_bus 5 years ago

The needs of the 0.01% are even greater, and they produce many orders of magnitude less than the 47% you so despise. Why do you hate the 0.01%

Briseis 5 years ago

lol.... I despise no one sparky. lol

enough of your .01%, fiscal cliff, doom and gloom meme.....btw chief...these are the 1%'

good morning to you mate

JohnBrown 5 years ago

O'Bama is trying to avoid the 'austerity crisis' that the Eurpoeans have so adroitly placed themselves into.

As for the 'debt crisis' , most of it is thanks to Reagan, Bush, and GW. O'Bama's deficits are the direct result of the Republicans trashing the economy much more severely than anyone thought just four years ago.

There needs to be a discussion about supply side economics, and an explanation as to why rich people (the so-called 'job creators' ) would want to create one single job so long as there is no demand for their products from the middle class.

O'Bama has suggested the following order in which to fix things: First traunch: 1. get the economy going again (Republicans opposed this over the past 4 years because they wanted to have a lousy economy during this election year and blame it on O'Bama). 2. Raise taxes on the top ~2% Second traunch: 3. Get the Republicans to identify and quantify the cuts they want. 4. Make bipartisan cuts.

As for raising the debt ceiling: O'Bama doesn't need congress to okay that. He has the Constitution ordering the debts be paid. Once congress authorizes expenditures the full faith and credit of the United States is in play. Congress can't first authorize expenditures and then renege on them when the time comes to pay up. Since much of the debt we owe is owed to foreigners, paying on the debt without congressional approval would be necessary as a national defense issue.


Paul R Getto 5 years ago

Bravissimo! A breath of fresh air, Ye are

kippcolorado 5 years ago

Hey, Dolph, be glad I never dated Pam because she'd be a Democrat by now.

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