Fiscal Cliff

The most logical place to find this revenue and the approach favored by a majority of Americans is letting the Bush tax cuts on the top 1 percent of Americans expire, essentially taking the tax rates for those Americans back to where they were during the Clinton era.

Rep. Chris Van Hollen (D-MD) explained why he thinks House Speaker John Boehner can't get to yes on a budget deal before automatic, across the board tax increases and spending cuts take effect after New Years: Once he's re-elected Speaker he'll have greater flexibility to cut a deal.

"I'm getting increasingly concerned that one of the reason the Speaker is deciding to, I think, string out these discussions is that he wants to wait til January 3 when the election for Speaker takes place and he's concerned that any agreement he reaches if it violated the so-called Hastert Rule could undermine support for him in his caucus and make it more difficult on January 3," he told reporters at a Wednesday breakfast roundtable hosted by the Christian Science Monitor.

The Hastert Rule is shorthand for GOP protocol that no legislation should be brought up for a vote in the House unless it is supported by a majority of the Republican conference.

A number of leading Democrats have called out Boehner for placing his Speakership ahead of the will of voters -- Van Hollen is perhaps the first to lay out exactly what that means.
TPM

Nothing new rl. There was an "Open Shop" fight on the 1920s. Probably others. Owners versus workers.

Anti-union lawmakers attached a budget appropriation to the bill in order to thwart efforts to repeal it by referendum — the Michigan Constitution provides that “[t]he power of referendum does not extend to acts making appropriations for state institutions or to meet deficiencies in state funds.” This is not the end of the story, however. Under that same constitution, Michigan voters may still restore the lost wages and collective bargaining power denied by this bill through a state ballot initiative:


The people reserve to themselves the power to propose laws and to enact and reject laws, called the initiative, and the power to approve or reject laws enacted by the legislature, called the referendum. The power of initiative extends only to laws which the legislature may enact under this constitution. The power of referendum does not extend to acts making appropriations for state institutions or to meet deficiencies in state funds and must be invoked in the manner prescribed by law within 90 days following the final adjournment of the legislative session at which the law was enacted. To invoke the initiative or referendum, petitions signed by a number of registered electors, not less than eight percent for initiative and five percent for referendum of the total vote cast for all candidates for governor at the last preceding general election at which a governor was elected shall be required.

No law as to which the power of referendum properly has been invoked shall be effective thereafter unless approved by a majority of the electors voting thereon at the next general election.

By attaching the appropriations provision to the anti-union bill, its supporters accomplished two things: they increased the number of signatures necessary to place it before the voters, and they guaranteed that, if enacted, it will be in effect at least until it can be repealed in the next general election. Nevertheless, Michigan voters are far from powerless. In the last Michigan gubernatorial election, voters cast a total of 3,226,088 votes. So workers and their allies will need to collect just under 260,000 signatures to place a repeal initiative on the ballot.

Anti-tax hike crusader Grover Norquist on Thursday outlined a strategy for Republicans to fight President Barack Obama in the new Congress.

“Jan. 1st is not the end of the fight,” Norquist said on C-SPAN. “It’s the beginning of the fight.”

Norquist, whose comments came in reference to the looming fiscal cliff — automatic spending cuts and tax hikes that will kick in next year if a deal is not reached — said Republicans have key leverage points over the president.

“Obama will be on a very short leash, fiscally speaking, over the next four years,” he said. “He’s not going to have any fun at all, he may just have to go blow up small countries he can’t pronounce because it won’t be any fun to be here, because he won’t be able to spend the kind of cash he was hoping to.”

Norquist outlined tactics at the GOP’s disposal for challenging Obama and the Democrats.

“Republicans have three tools,” he said. “One: the sequester. The Democrats fear sequester more than Republicans because it actually reins in spending.”

Next, he said, is the upcoming debt ceiling vote.

“It will have to come up every month or so as Obama keeps hitting that ceiling,” Norquist said of the nation’s borrowing limit. “Republicans can raise it a little or a lot, or for a month or for six months. That gives them discipline as it did in 2011 to require spending restraint.”

Norquist cited other budget fights from earlier in this legislative session, as examples of how Republicans have fended off spending increases — the third tool the GOP can use.

“Because the Senate doesn’t do its job, because Harry Reid plays politics instead of governing, they haven’t got a budget,” he said. ‘They do a continuing resolution…they still have to vote to allow that money to be spent, which means the House of Representatives has to agree to continue the budget. What they did in 2011, for about a month or two, they said, ‘We’ll extend the continuing resolution for a few weeks if you save four billion dollars.’

“We’ve got lots of things Obama claims to be for and we will make –we, the Republicans in the House and Senate—will make him actually make those spending restraints in order to get the continuing resolution out a week, two weeks, a month,” Norquist added.

“Where are the president’s spending cuts?” asks John Boehner. With Republicans coming to grips with their inability to stop taxes on the rich from rising, the center of the debate has turned to the expenditure side. In the short run, the two parties have run into an absurd standoff, where Republicans demand that President Obama produce an offer of higher spending cuts, and Obama replies that Republicans should say what spending cuts they want, and Republicans insist that Obama should try to guess what kind of spending cuts they would like.

Reporters are presenting this as a kind of negotiating problem, based on each side’s desire for the other to stick its neck out first. But it actually reflects a much more fundamental problem than that. Republicans think government spending is huge, but they can’t really identify ways they want to solve that problem, because government spending is not really huge. That is to say, on top of an ideological gulf between the two parties, we have an epistemological gulf. The Republican understanding of government spending is based on hazy, abstract notions that don’t match reality and can’t be translated into a workable program.


Let’s unpack this a bit. We all know Republicans want to spend less money. So the construction of the debate appears, on the surface, to be a pretty simple continuum based on policy preferences. Republicans like Mitch McConnell say government spending is “out of control” and would, at least ideally, like to bring it into line with revenue entirely through spending cuts. Democrats like Obama endorse a “balanced” solution with revenue and taxes. Right-thinking centrists, like the CEO community and their publicists like Mike Allen and Jim VandeHei, think we should cut deeply into entitlement spending while also raising tax revenue. (VandeHei, in a video accompanying his execrable story, asserts, “There’s money to be cut everywhere.”)


There really isn’t money to be cut everywhere. The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure is grossly underfunded.


The Bowles-Simpson “plan” was an earnest and badly needed attempt to reconcile the GOP’s hazy belief that government is enormous with reality. They did everything they could possibly do: They brought in representatives from all sides for long meetings with budget experts, going through all aspects of federal policy in detail, in the hope of reaching an agreement on the proper scope of government and how to pay for it. It failed. The Bowles-Simpson plan wound up punting on all the major questions because it simply couldn’t bridge that gulf between perception and reality. That’s why, in lieu of any ability to identify government functions to eliminate, the plan simply pretended the federal government could have everybody do a lot more work for less pay.


The real domestic savings in Bowles-Simpson came from building on Obamacare’s steps to save money by holding down the growth of health-care costs and to cut defense spending by pretty steep levels. But these turned out to be ideas that alienated rather than satisfied Republicans. So basically it turned out to be impossible to find real spending cuts that Republicans wanted.


It’s true that Paul Ryan’s budget plan had some deep cuts. But none of those cuts touched Medicare for the next decade or Social Security at all. Ryan just kicked the crap out of the poor. So, that provision aside, if you’re not willing to inflict epic levels of suffering on the very poor, there just aren’t a lot of cuts to be had out there.


Republicans and even many centrists like to endorse taking away Medicare benefits from people like Warren Buffett. But even defining “Warren Buffett” at a level way below Warren Buffett’s income level yields pathetically little money. (The very rich have a vastly disproportionate share of income but not a vastly disproportionate share of entitlement benefits, which means taxing them produces way, way more savings than reducing their social spending.) This is why the spending side of the fiscal cliff negotiation is so discouraging. The potential cuts on the table range from fairly painful steps like reducing the Social Security cost-of-living index to even more painful steps like raising the Medicare retirement age, and none of them would save all that much money — certainly not on the scale that Republicans want.


When the only cuts on the table would inflict real harm on people with modest incomes and save small amounts of money, that is a sign that there’s just not much money to save. It’s not just that Republicans disagree with this; they don’t seem to understand it. The absence of a Republican spending proposal is not just a negotiating tactic but a howling void where a specific grasp of the role of government ought to be. And negotiating around that void is extremely hard to do. The spending cuts aren’t there because they can’t be found.