Robert Reich
President Barack Obama gestures as he answers a question during a news conference in the East Room of the White House in Washington, Wednesday. Now that the President has set his goal on $1.6 trillion in additional taxes, Reich writes, the question is whether the rich are going to cough up $1.6 trillion more. (Charles Dharapak/AP)
Obama's grand bargain: broaden the base or tax the rich?
The President says he wants $1.6 trillion in tax hikes. Republicans say they won’t raise tax rates but might be willing to close some loopholes and limit some deductions and tax credits. Is compromise in the air?
Not a chance. True enough, such “base broadening,” as Republicans like to call it, could conceivably generate $1.6 trillion in additional tax revenues over the next decade.
But, wait. Didn’t the President just win a second term? The major issue decided in last week’s election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans.
“Broadening the base” has nothing whatever to do with the rich paying more. That’s because a lot of tax credits and deductions help the middle class and the poor. ( Continue… )
President Barack Obama steps up to the podium before a news conference in the East Room of the White House in Washington Wednesday. A strong economy should take priority over deficit reduction, Reich writes. (Charles Dharapak/AP)
Obama's grand bargain: economy first, deficit second
When he meets with Congressional leaders this Friday to begin discussions about avoiding the upcoming “fiscal cliff,” the President should make crystal clear that America faces two big economic challenges ahead: getting the economy back on track, and getting the budget deficit under control.
But the two require opposite strategies. We get the economy back on track by boosting demand through low taxes on the middle class and more government spending. We get the budget deficit under control by raising taxes and reducing government spending. (Taxes can be raised on the wealthy in the short term without harming the economy because the wealthy already spend as much as they want — that’s what it means to be rich.)
It all boils down to timing and sequencing: First, get the economy back on track. Then tackle the budget deficit. ( Continue… )
President Barack Obama makes Veterans Day remarks at Arlington National Cemetery in Arlington, Va., Sunday. Reich offers ideas for Obama's opening bid on a grand bargain on deficit reduction. (Jonathan Ernst/Reuters)
Obama should aim high in deficit negotiations
I hope the President starts negotiations over a “grand bargain” for deficit reduction by aiming high. After all, he won the election. And if the past four years has proven anything it’s that the White House should not begin with a compromise.
Assuming the goal is $4 trillion of deficit reduction over the next decade (that’s the consensus of the Simpson-Bowles commission, the Congressional Budget Office, and most independent analysts), here’s what the President should propose:
First, raise taxes on the rich – and by more than the highest marginal rate under Bill Clinton or even a 30 percent (so-called Buffett Rule) minimum rate on millionaires. Remember: America’s top earners are now wealthier than they’ve ever been, and they’re taking home a larger share of total income and wealth than top earners have received in over 80 years. ( Continue… )
In this November 2012 file photo House Speaker John Boehner, R-Ohio, talks about the elections and the unfinished business of Congress at the Capitol in Washington. (J. Scott Applewhite/AP/File)
Democrats, Republicans play economic chicken over taxing the rich
With the election behind us I had hoped we’d get beyond games of chicken. No such luck.
But first you need to understand that the game of chicken isn’t about how much or when we cut the budget deficit. Or even whether the upcoming “fiscal cliff” poses a danger to the economy.
The non-partisan Congressional Budget Office on Thursday warned that the automatic tax increases and spending cuts scheduled to start in January amount to too much deficit reduction, too soon. They’d put the economy back into recession, and push unemployment to about 9 percent. But the CBO also warned of an economic crisis ahead if the United States doesn’t stem the growth of the nation’s exploding deficit. ( Continue… )
Tea Party supporters picket the venue where President Barack Obama gave a speech at Mentor High School in Mentor, Ohio, in this November 2012 file photo. (Jerome Delay/AP/File )
Will the Tea Party compromise?
“If there’s a mandate in yesterday’s results,” said House Speaker John Boehner on Wednesday, “it’s a mandate to find a way for us to work together.” Republicans, he said, were willing to accept “new revenue under the right conditions,” to get a bipartisan agreement over the budget.
We’ve heard this before. The Speaker came close to agreeing to an increase in tax revenues in his talks with the President in the summer of 2011, but relented when Tea Partiers in the House made a ruckus.
But Tea Partiers may be more amenable to an agreement now that the electorate has signaled it doesn’t especially like what the Tea Party has been up to. ( Continue… )
This combination of Associated Press file photos shows some of the key economic sectors that could be impacted by America's decision to re-elect President Barack Obama. The way to ensure continued growth is to continue the president’s payroll tax cut and extend the Bush tax cuts for income under $250,000, and continue government spending, Reich writes. (AP Photos/File)
Obama's next economy: the danger of the fiscal cliff
When the applause among Democrats and recriminations among Republicans begin to quiet down — probably within the next few days — the President will have to make some big decisions. The biggest is on the economy.
His victory and the pending “fiscal cliff” give him an opportunity to recast the economic debate. Our central challenge, he should say, is not to reduce the budget deficit. It’s to create more good jobs, grow the economy, and widen the circle of prosperity.
The deficit is a problem only in proportion to the overall size of the economy. If the economy grows faster than its current 2 percent annualized rate, the deficit shrinks in proportion. Tax receipts grow, and the deficit becomes more manageable. ( Continue… )
Polling equipment is set and ready at a local polling station in a Milwaukee County Parks building the day before election day in Milwaukee, Wisc., Monday. When Americans get upset about politics these days they tend to stew in their own juices, Reich writes. (Darren Hauck/Reuters)
Election 2012: A house divided
The vitriol is worse is worse than I ever recall. Worse than the Palin-induced smarmy 2008. Worse than the swift-boat lies of 2004. Worse, even, than the anything-goes craziness of 2000 and its ensuing bitterness.
It’s almost a civil war. I know families in which close relatives are no longer speaking. A dating service says Democrats won’t even consider going out with Republicans, and vice-versa. My email and twitter feeds contain messages from strangers I wouldn’t share with my granddaughter.
What’s going on? Yes, we’re divided over issues like the size of government and whether women should have control over their bodies. But these aren’t exactly new debates. We’ve been disagreeing over the size and role of government since Thomas Jefferson squared off with Alexander Hamilton, and over abortion rights since before Roe v. Wade, almost forty years ago. ( Continue… )
President Barack Obama, right, is introduced by former President Bill Clinton, left, at a campaign event at Jiffy Lube Live, Saturday, in Bristow, Va. By turning its back on white working-class men the Democratic Party created a political vacuum Republicans have been all too eager to fill, Reich writes. (Pablo Martinez Monsivais/AP)
Election 2012: Three lessons for Democrats
It’s not too early to draw some lessons. Regardless of what happens Tuesday, Democrats should have three big takeaways from the 2012 election.
Lesson One: Democrats Can Own the Future.
Latinos, African-Americans, young people, and women have become the major Democratic voting blocs. That’s good news for Democrats because the first three constitute a growing percentage of the voting population (young people eventually become the entire voting population), while women continue to gain economic ground.
The challenge for Democrats will be to hold these groups in the future. All have been attracted to the Democratic Party in recent years mainly because Republican policies have turned them off – policies like the GOP’s draconian responses to undocumented workers, its eagerness to slash Medicaid and food stamps, its misogynistic approach to abortion, and its demand to cut federal spending on education and student loans. ( Continue… )
Republican presidential nominee Mitt Romney pauses while speaking at a campaign rally in Newport News, Va. Sunday. (Brian Snyder/Reuters)
Mitt Romney's 10 guiding principles
By now, in these last remaining days before the election of 2012, we have learned enough about the beliefs of the Republican presidential candidate to see them as a worldview all its own – a kind of creed that explains Mitt Romney. Those who say he has no principles are selling him short.
Despite its contradictions and ellipses, Romneyism has an internal coherence. It is different from conservatism, because it does not intend to conserve or protect any particular institutions or values. It is also distinct from Republicanism, in that it is not rooted in traditional small-town American values, nationalism, or states’ rights.
The ten guiding principles of Romneyism are:
1. Corporations are the basic units of society. Corporations are people, and the overriding purpose of an economy is to maximize corporate profits. When profits are maximized, the economy grows fastest. This growth benefits everyone in the form greater output, better products and services, and higher share prices. ( Continue… )
In this October 2012 file photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y. The biggest challenge ahead isn’t just to get jobs back Reich writes. It’s to raise the wages of most Americans. (Mike Groll/AP/File)
Employment report: more jobs, less pay
The two most important trends, confirmed in today’s jobs report from the Bureau of Labor Statistics, are that (1) jobs slowly continue to return, and (2) those jobs are paying less and less.
Today’s report showed 171,000 workers were added to payrolls in October, up from 148,000 in September. At the same time, unemployment rose to 7.9 percent from 7.8 percent last month. The reason for the seeming disparity: As jobs have begun to return, more people have been entering the labor force seeking employment. The household survey, on which the unemployment percentage is based, counts as “unemployed” only people who are looking for work.
As I’ve said, you have to take a single month’s report with a grain of salt because the job reports bounce around a great deal, and are often revised. Last month the BLS announced that 114,000 new jobs were created in September. Today the BLS revised that September figure upward to 148,000. ( Continue… )
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