“If they [Democrats] don’t pass this bill in the next couple weeks it will materially increase the risk that the economy would stall out and we would have a double dip,” he told a gathering of reporters at an off camera briefing. A double dip recession? “What I said it would significantly increase the risk,” Summers replied. – Sam Stein of Huffington Post
The Obama White House is channeling George W. Bush on economics a lot these days. As Dan Froomkin proves, during Pres. Obama’s tantrum he also got his facts wrong on Social Security, but no one should be surprised, because he’s gunning for it too. As for Larry Summers, he was against the Bush tax cuts, before he started fearmongering for them.
Back in September, Larry Summers told CNBC that continuing the tax cuts for the wealthy wouldn’t really help the economy where it was needed. Via Bush Tax Cuts Not Important for US Economy: Summers:
But he dismissed the importance of continuing the cuts for those earning over $250,000, a key part of the political battle raging in Washington. The cuts expire at the end of 2010.
“With deficits looming as seriously as they are, why is now the right moment to lock in several hundred billion dollars of tax cuts for 2 percent of the population when we could be using those revenues to strengthen incentives for investment in the country’s future?” Summers said.
“I think the case is pretty clear, if you look at what the vast majority of economists are saying, (that) what will stimulate economy more are measures that are targeted at investments, it’s measures that are targeted at research and development,” he continued. “So I think those are the right steps forward.”
I thought Sen. Schumer’s millionaire gambit was the way to go, because more tax advantages for millionaires and billionaires just rings sour to most people.
I’ve said all along that I liked the idea of a payroll tax holiday, but only on the condition that the Bush tax cuts were let to expire. But I don’t take lightly what my progressive activist colleagues are warning, that this tactic would indeed be the first salvo against Social Security. Many believe this very strongly, beginning with Nancy Altman, author of “The Battle For Social Security”, who heads the group Social Security Works, and whose post on Firedoglake is worth a read. From her post:
… Given that unwillingness to raise taxes by less than a nickel on every dollar earned over $1 million, I find it unfathomable that a more conservative Congress, in two years, in an election year, will increase the payroll tax by 2 percent on the very first dollar, and every other dollar up to the cap, earned by virtually every single worker in the country. Consequently, I think we have to assume that the payroll tax holiday will be extended beyond the two years the president is proposing and quite likely could become permanent.
That means that the federal government will have to continue to transfer $120 billion to the Social Security trust funds each and every year even as it has to transfer more and more interest payments as the trust funds continue to grow and as interest rates return to more normal levels. Unless Congress acts to restore Social Security to solvency, the Treasury bonds held in trust will have to be redeemed, again on top of that new $120 billion transfer from the general fund, starting fifteen years from now, assuming Congress even continues to make the $120 billion every year before that point. These dollars will be competing with dollars for defense, environmental protection, education, school lunches, Food Stamps, Medicare, Medicaid, SSI, Pell grants for low income college students, and every other good and service financed by the federal government.
A permanent two percent cut in Social Security contributions doubles the 75 year projected shortfall. Scrapping the cap (eliminating the $106,800 maximum on earnings), tonally eliminates the shortfall today. If FICA is cut by 2 percent, scrapping the cap gets Social Security only halfway there. …
Pres. Obama’s Bushesque fearmongering on his right-leaning tax scheme is unfortunate, but this type of language is only going to get worse as we go forward.
As for congressional Democrats, they’ve simply got to make the tax scheme better or kill it. They need to prove to the people who elected them that they’re still willing to fight for Democratic principles and policies, because it’s clear the President is not.
Taylor posted: ***As for congressional Democrats, they’ve simply got to make the tax scheme better or kill it. They need to prove to the people who elected them that they’re still willing to fight for Democratic principles and policies, because it’s clear the President is not.***
Taylor,
Well said and AMEN!!!!!!!!!!!!!!!!!!
Larry Summers is a crook requiring Gitmo’s pleasures, permanently!
politico claims dems are moving towards accepting the deal. liberals mostly will oppose but repubs some others will go along. i keep hoping the thing falls apart. the cost is very high for obama. now the ca dem chair attacks wh deal:
ca dem chair attacks obama tax deal. also note senate killed 250.oo check for all ss recipeints but is seen now as approving 900 bil in tax cuts
http://www.calitics.com/diary/12916/john-burton-calls-for-action-against-tax-bonus-capitulation
No one will be surprised if Dems back Obama. We haven’t had a principled Congress in decades. It’s been partisan backstopping for the boss, no matter what party’s in the White House.
We’ll see if the new Tea Party members are going to change it, at least on their side.
Joan Walsh totally caved to conventional wisdom and should hang up her liberal strips because she does not qualify anymore. On Hardball tonight, She said something like…the left just needs to get over it because this is most progressive president this country can elect at this time.
I have news for Larry Summers- thanks partly to his advice, we’re about to hit that second dip anyway. That is, assuming you believe we never got out of the first dip. I wrote this back in June explaining why it was coming. Now with the November job numbers, it looks like it’s here.
Well said.
I agree a payroll tax holiday could work, but NOT like this. It has to be paid for by extending the cap after the first 250k in income. If it’s not paid for, it just becomes an excuse to do what Republicans have wanted to do all along, permanently lower payroll taxes, fund ss through the general fund, and turn the whole program into welfare.
Lake Lady,
I would only disagree that Joan Walsh *caved* to conventional wisdom. She’s always dispensed Beltway CW. A total career she’s made in sucking up to Spitty Chrissy Matthews and being a constant staple of his ignorant TV show on MSNBC.
Ms. Walsh tried that same tact on her Salon site, yesterday. Please go read the comments to her. She gets buried in her own arrogance and she’s Salon’s editor in chief. Her fans certainly not amused by her perpetual obsequiousness to Obama = hilarious! It’s why she’s Matthew’s most favored guest (other than, his fellow bigot/misogynist in Patrick Buchanan). Three rotten peas in a pod.
house dems lambaste biden- this is funny
http://www.huffingtonpost.com/2010/12/08/house-dems-biden-tax-cut-deal_n_794150.html
heh-heh…
Glen Ford, at Black Agenda Report (written before today’s WH games):
“The overarching truth of the last two years Is that Obama has been at constant war with the New Deal and the left hemisphere of his party, acting as Wall Street’s Trojan Horse in the White House. Tuesday’s press conference starred an unrepentant, unreconstructed, center-right, corporate operative who sees his primary duty as destroying what remains of the Democrat’s progressive legacy. And the first term of the disaster is less than half over.”
http://tinyurl.com/2566wdb
That’s some post, Joyce. Wow.
Ford and Black Agenda in general, are doing some great reporting and analysis.
Brilliant post, Taylor and Joyce…WOW!!!
To get elected, Obama promised to let the Bush tax cuts for the wealthy expire. He is breaking that promise, but promising again to let them expire later.
Um…if he breaks a promise without even letting the rest of the Democratic leadership in on his private deal with the Republicans, why should we believe him a second time?
This is Lucy pulling the football away from Charlie Brown all over again. So are we going to give this guy another 2 years and another shot at the White House just so he can keep on breaking his promises? If so, then the electorate is in a co-dependent and abusive relationship with the government.
I didn’t trust Obama before the 2008 election and I trust him even less now. In fact, he gives me no reason to trust him at all.
If this gets passed, so does the Bush torch and they are now Obama’s tax cuts for the wealthy, and from the passage point forward, should be identified as such.
This is not change we can believe in. It is a change for worse and the stuff of which nightmares are made. Might as well stick a fork in the Democratic Party and the New Deal. They are both done. The Fat Lady is back stage warming up her pipes.
Sorry for such a cliche-riddle post, but it is the only way I am able to hang onto any shred of sanity at this point.
Sometime cliches are necessary for sanity, as you say. And they also convey something about the badness of the bad we’re watching. To go with Lucy and the football, Obama is making it quite clear that it is his football, and only a limited number of very special people who play by his rules get a chance to kick it. For the rest of us, if we take a run at kick it will be just be air football.
Joyce,
Let me add my WOW as well. Keyword is Trojan Horse, perfect words to describe Obama! Thanks for sharing that bombshell.
Check out Black Agenda Report when you can. They don’t post frequently, but this is the kind of thing you’ll read.
In 2008 Obama called for a roll back on these upper level tax cuts. This rollback then became an expiration, until after the 2010 mid-terms. What is interesting is that no one asks the question to Obama or is economic/domestic policy folks if fiscal decisions made since becoming president were based on the assumption that these tax cuts would expire? Seems like a simple question but important question to ask.
I’d like to hear the answer.
Silly progressives.
Social Security is ponzi. It has been since the Political Class that we elected looted the program to pay for General Revenue. This is not what FDR and Frances Perkins had in mind, but there you have it.
Nobody in the Republican Party who is serious about getting elected wants to “destroy” Social Security. They do know that the program is going belly-up, and that it will at some point have to change radically and be seperated from what it is now: a piggybank for the Looters.
Progressives should have understood what serious conservatives always knew: when you put a pile of Other People’s Money in front of the Political Class, the Looting commences.
As to Obama, we always understood that he was the Banksters’ stooge. Wall Street bailed on the Bush Family over W’s incompetence in the Middle East and switched loyalties to this bright eyed, bushy-tailed young man from Illinois with a gift for gab who came up through the Bond Villain’s (Soros’) network. I mean, get serious, you people actually expected a restoration of Glass-Stegall and serious, accountable Bankster racket hearings?
“Change We Can Believe In!”
The Obama Campaign of 2008 will go down in history as a tribute to PT Barnum’s admonition that there is a sucker born every minute.
section9–BRILLIANT!!! The entire post, but my favorite line: “when you put a pile of Other People’s Money in front of the Political Class, the Looting commences.”
That is going to be carved on my gravestone…..