Ezra Klein: The obvious compromise between the Reid and Boehner plans

[cal04]

http://www.washingtonpost.com/blogs/ezra-klein/post/the-obvious-compromise-between-the-reid-and-boehner-plans/2011/07/11/gIQAJa8DZI_blog.html

When it comes to cutting the deficit, the plans proposed by Senate Majority Leader Harry Reid (read it here) and House Speaker John Boehner (read it here) are much more similar than they are different. It’s when they come to raising the debt ceiling that the consensus cracks apart.

Both plans call for $1.2 trillion in cuts to discretionary spending. Both plans envision the formation of a bipartisan “Supercommittee” that will try to find consensus on a larger deficit-reduction package that, if it wins a majority on the Supercommittee, will be immune to amendments and filibusters and be fast-tracked for an up-or-down vote in the House and the Senate.

Reid’s plan includes $100 billion in savings from so-called “mandatory spending” like Fannie Mae and agricultural subsidies, $1 trillion in savings from winding down the wars, and $400 billion in reduced interest payments from cutting more than $200 billion in spending. Boehner’s plan doesn’t specifically include any of that, but it’s fair to expect that his bipartisan committee would end up recommending many of the same mandatory savings, that the wars will wind down whether Boehner mentions them or not, and if all that happens, his interest savings will be similar. So the two plans are roughly equivalent in their immediate savings.

(snip)
The similarity of the two plans does, however, suggest an obvious compromise. The final plan could adopt Reid’s initial spending cuts, which are both slightly larger and more impressively stated than Boehner’s, and Reid’s longer debt-ceiling increase. But it could adopt Boehner’s idea for across-the-board spending cuts — perhaps in an augmented form that includes penalties designed to bring Republicans to the table — if a second round of deficit reduction doesn’t pass. It could also include a vote on a balanced-budget amendment, though I personally dislike this policy and consider it a mistake.

[Avalux]

1. REVENUE?????? HELLO???????

Unless taxes are raised, there is no solution.

[emulatorloo]

3. The Republican House will not pass a bill that raises taxes.

That is the basic fact of this situation

Teabagger on TV

- default would not be bad. We have the money now to pay our debt. All we have to do is get rid of wasteful govt programs. If the government was not paying out, we would be fine. This is a simple spending issue. Not a revenue issue.

This is what they believe. They are like religious fanatic on a Mission.

[karynnj]

4. As he has noted before, unless Congress does something,

the Bush tax cuts automatically expire at the end of next year - right after the election.

Two scenarios, Obama wins - he can veto anything that includes extending them - even if that means everyone has a tax increase.

Obama loses, he has no reason not to veto and they expire.That means the new President has to re-enact them. Hopefully the Senate Democrats will remember that anything takes 60 votes to pass - and 41+ will filibuster.

[emulatorloo]

5. Thanks for that reminder.

[vi5]

6. On Obama ever vetoing the tax cuts

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!

That's the funniest thing I've heard all day. Either way, if he wins or loses the election he's someone who is far too concerned with his legacy and the perceptions of his presidency and character (see his obsessions with "historical legislation" and "grand bargains") to do that. Plain and simple.

He can prove me wrong. I hope he does. I'd love just once for him to prove me wrong.

But those tax cuts are going to be extended, no matter what.

[Horse with no Name]

7. And they would have expired sooner

if he hadn't agreed to extend them.

In an election year, I do not expect Obama to do what he needs to do for the country, I expect him to do what he needs to get reelected. It is who he is.

The US will be the collateral damage to his ambitions.

[karynnj]

11. The problem was that with the recession where it was, he needed

unemployment extended and he wanted to retain the tax cuts for people making under $250,000.

Now, I have no idea what will happen to the economy over the next year and a half. But, given that they would still be doing this deficit reduction, it might be easier to not extend all of them. The fact is that people absolutely don't know what is in the Ryan plan.

If people learned that Ryan completely removes the estate tax - allowing wealth to flow from generation to generation untaxed and he wants to end any taxes on income derived from capital. Given that the top 1% already has about 40% of the country's wealth - and this was achieved when there WERE estate taxes and capital gains and dividend taxes - imagine what the percent would grow too without those taxes.

Try to defend a person not having to pay taxes on the $1000 gain that he got when he sold a block of stock that he bought for $5000 for $6000, when every cent of income a person earns through work is taxed. I don't see how you can defend it. Their try that - that otherwise it is not worth it for the person to invest is obviously false - as they have for centuries. Not to mention the simple mathematics show it is lucrative. In this example would having to pay $150 make earning $1000 not worth it? Seriously, we need to run on this.

[Change Happens]

10. If noone does anything about the taxes, they will rise effective Jan. 1, 2013.....nt

Or is it 2012?

[Eric J in MN]

2. Who cares if a government program is good or bad?

Just make across-the-board spending cuts.

Brilliant.

(sarcasm)

[lumberjack_jeff]

8. A 5% across the board cut is a big cut for the military.

Not so much for NASA.

[thereismore]

9. That depends on who has been more wasteful. I think the military can function

with 5% less very well, if they trim their excesses, not so much NASA.