Earlier this week, Stan Collender wrote a longish piece about the prospects for tax reform. His bottom line? Don't expect anything until 2017.
He makes several points, most of which I agree with. But I'm not sure I agree with the conclusion. In particular, Collender argues, essentially, that tax reform will happen only when Republicans give in to the Democratic position that reform should be revenue-positive this time around, as opposed to the revenue-neutral 1986 effort.
I strongly disagree with that -- as I've argued in the past, I think tax reform is really only plausible when it's revenue-neutral. Why? Because tax reform by its nature is all about overcoming well-organized, generally influential losers by putting together a coalition of marginal winners. That only works if the end product is essentially an overall net winner (because it increases economic efficiency). Use it to raise revenues, and you lose most or all of that. That's one way to look at it; another is that it's not plausible that a revenue-raising bill of any kind will attract very many Republican votes in the foreseeable future, which means that the votes just aren't going to be there.
Because of that, I'd say that the recent reductions in the deficit -- and more importantly, the recent reductions in everyone's focus on the deficit, along with the at least partial demise of "grand bargain" talk -- is extremely good news for tax reform. It still doesn't make it easy, or likely, but I think the only chance for tax reform is to decouple it from deficits and grand bargains. Indeed, that's what happened in the 1980s; tax reform was (as far as I remember) placed on a completely different track from Gramm-Rudman and other deficit-cutting efforts.
The other thing I'd say about tax reform is that it's no surprise that it's rising to the top of the agenda during a second term of a presidency and during divided government. Regardless of what House Republicans are saying right now, tax reform is never at the top of any party's agenda -- for example, Ed Kilgore makes the sensible point that the IRS scandal could revive GOP flat tax mania, making "normal" tax reform that much less possible. A new presidency brings a new agenda, and tax reform is unlikely to be near the top. Especially if there's another round of unified government.
So while I agree with Collender about all the reasons that tax reform is difficult at best over the next three years, I think this is still the real window; if it doesn't happen now, it's likely not to happen for a while.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Thursday, June 13, 2013
Sunday, April 28, 2013
Sunday Question for Liberals
Since I think I'm writing about this soon: holding spending the same, which do you prefer: higher taxes (written, let's say, by liberals, so making taxes more progressive) or taxes where they are and a larger deficit?
Tuesday, April 2, 2013
Oy, Reich
I'm not gong to get full-on cranky at Robert Reich's column today...only somewhat cranky.
Reich's complaint is that politicians are happy to follow public opinion when it comes to marriage equality, guns, and immigration...but on raising taxes for rich people politicians ignore public opinion. To his credit, he cites real research, from Page and Bartels, on the question of politicians ignoring the poor and even the middle-class. So I won't get too cranky.
But really...well, I'll give you some context before I complain:
Who says American politics is gridlocked? A tidal wave of politicians from both sides of the aisle who just a few years ago opposed same-sex marriage are now coming around to support it. Even if the Supreme Court were decide to do nothing about California’s Proposition 8 or DOMA, it would seem only matter of time before both were repealed...Yes, well. It is absolutely true that Senate Democrats have gone stampeding on marriage...enough that there are almost a majority for it. Which is still far short of what they would need to actually do anything.
It’s nice to think logic and reason are finally catching up with our elected representatives, but the real explanation for these changes of heart is more prosaic: public opinion...
The exception is in the economic sphere, where public opinion seems beside the point...
Before January’s fiscal cliff deal, for example, at least 60 percent of Americans, in poll after poll, expressed strong support for raising taxes on incomes over $250,000. As you recall, though, the deal locked in the Bush tax cut for everyone earning up to $400,000.
Yes, legislative deals require compromise. But why is it that deals over economic policy almost always compromise away what a majority of Americans want?
Also: they haven't actually done anything on guns.
Also: they haven't actually done anything on immigration.
And that's the Senate. The easy side, for these policies!
In other words, Congress did, after all, raise taxes, albeit after compromise. They haven't done these other things that Reich compares them to at all. And yet Reich somehow managers to believe that it's raising taxes and other "big money" items, in particular, that politicians refuse to do despite public opinion.
The problem is that when you talk about things this way, ignoring what actual politicians are actually doing on actual issues, you lose the ability to effectively criticize -- and the opportunity to potentially do something about it. Anyone reading Reich's column would have no idea that the parties differ on all of these issues; that 51 Democrats in the Senate just voted for a budget which raises revenues; that Republicans not only oppose revenues, but that low taxes for rich people may be their highest priority, while (once again) most Democrats support Reich's position on this, and have voted for it in the House and the Senate; and that not all Democrats are the same on this or any issue.
All of which is a terrible message to send to activists and potential activists. People who read Reich and believe him wouldn't realize that there's any point to getting active in primary elections or even in general elections; his story is one of "politicians" in general who don't care about what anyone thinks on any of these issues. Even worse, he's portraying a world in which there are only two things: politicians moved by public opinion on most things, and by the rich on others. Nothing about parties, interest groups (outside of those representing the rich), or activists. It's a world in which individual political action doesn't make a difference.
That's not true. It's not true on marriage, it's not true on guns, it's not true on immigration...and it's not true on "big money" issues.
Wednesday, March 13, 2013
Two More Notes on Imaginary Numbers
Two more quick notes on the Ryan budget's tax numbers:
1. I said yesterday that what's real about the budget as a whole is that it's an opening bid for further negotiations. That might be wrong. The other possibility, as Ed Kilgore says, is that it's simply a gift to the crazies in exchange for not blocking the debt limit increase last time around -- and perhaps the next time, too. Could be!
2. The implausibility of the tax numbers is drawing a lot of attention. But on second thought, I'm not sure that's fair, or at least necessary. This is a budget, not a tax reform plan. As long as the tax cuts proposed in the budget are only intended -- and will only be implemented -- as part of revenue-neutral comprehensive tax reform, then who cares (from a budget point of view) whether it's going to be possible to come up with enough offsets to make it work? If it doesn't, then (presumably) tax policy just reverts to the status quo.
So perhaps what people need to know about Ryan and the House Republicans is (1) whether they'll use real numbers in their projections -- which it appears so far that they are -- and (2) are all the tax cuts mentioned in the budget contingent on revenue-neutral tax reform, or only the tax rate cuts? As long as the answers tell us that we can trust that their plans should get to the overall revenue estimates, then I'm not sure how much it matters that what they're promising for tax reform is entirely implausible.
1. I said yesterday that what's real about the budget as a whole is that it's an opening bid for further negotiations. That might be wrong. The other possibility, as Ed Kilgore says, is that it's simply a gift to the crazies in exchange for not blocking the debt limit increase last time around -- and perhaps the next time, too. Could be!
2. The implausibility of the tax numbers is drawing a lot of attention. But on second thought, I'm not sure that's fair, or at least necessary. This is a budget, not a tax reform plan. As long as the tax cuts proposed in the budget are only intended -- and will only be implemented -- as part of revenue-neutral comprehensive tax reform, then who cares (from a budget point of view) whether it's going to be possible to come up with enough offsets to make it work? If it doesn't, then (presumably) tax policy just reverts to the status quo.
So perhaps what people need to know about Ryan and the House Republicans is (1) whether they'll use real numbers in their projections -- which it appears so far that they are -- and (2) are all the tax cuts mentioned in the budget contingent on revenue-neutral tax reform, or only the tax rate cuts? As long as the answers tell us that we can trust that their plans should get to the overall revenue estimates, then I'm not sure how much it matters that what they're promising for tax reform is entirely implausible.
Friday, March 1, 2013
Catch of the Day
I really like Jonathan Chait on Paul Ryan's new go-to excuse on why Republicans can't close tax "loopholes" to raise revenues in regular budget talks -- because supposedly that would make tax reform impossible.
As Chait points out, the odds of tax reform actually happening this year are slim at best. But supporting tax reform, at least in theory, is a cheap way for conservatives to impress centrist Washingtonians.
In fact, Republicans have reserved the symbolic "H.R. 1" designation for their tax reform bill, thus making the claim that it's the centerpiece of their legislative agenda.
I have my doubts. In fact, while it is true that the House has held hearings on tax reform, I strongly suspect that tax reform will wind up exactly as substantive as the "replace" part of "repeal and replace" on ACA was in the last Congress. In other words, they'll keep promising to get to it, but never actually do it. We'll see.
Meanwhile, it's worth pointing out explicitly that Ryan's objection makes no sense at all. Tax reform, everyone agrees, means removing tax exclusions, deductions, and credits. Lowering rates is a consequence of eliminating the other treatments, but changing rates isn't in and of itself reforming; no one thinks that simply cutting tax rates counts as "tax reform." Therefore, getting rid of loopholes doesn't prevent tax reform. It is tax reform! Ryan could, I suppose, argue that removing the low-hanging fruit makes a larger bill harder, but I really don't see why. Every tax provision has lobbyists and interest groups supporting it. Having fewer provisions to eliminate means fewer people objecting to the bill.
Indeed, separating tax increases (however obtained) from the main tax reform bill would make tax reform far more likely, not less likely. Revenue-raising tax reform is basically impossible. Any comprehensive tax reform is difficult because the benefits are general and the costs specific, and usually carried by well-organized, influential groups. Add to that increases in overall revenue, and you make that equation even worse. And that's without the reality that large groups of Republicans (for better or worse) simply will not support higher revenues, even if the GOP leadership might grudgingly go along. No, if you really care about tax reform, the best plan is to divorce it from any search for higher revenues, which would mean accepting higher taxes elsewhere if you have to do it at all.
But mainly, the argument makes no sense. If you really want tax reform, you shouldn't care whether it comes all in one bill or piecemeal.
Nice catch!
As Chait points out, the odds of tax reform actually happening this year are slim at best. But supporting tax reform, at least in theory, is a cheap way for conservatives to impress centrist Washingtonians.
In fact, Republicans have reserved the symbolic "H.R. 1" designation for their tax reform bill, thus making the claim that it's the centerpiece of their legislative agenda.
I have my doubts. In fact, while it is true that the House has held hearings on tax reform, I strongly suspect that tax reform will wind up exactly as substantive as the "replace" part of "repeal and replace" on ACA was in the last Congress. In other words, they'll keep promising to get to it, but never actually do it. We'll see.
Meanwhile, it's worth pointing out explicitly that Ryan's objection makes no sense at all. Tax reform, everyone agrees, means removing tax exclusions, deductions, and credits. Lowering rates is a consequence of eliminating the other treatments, but changing rates isn't in and of itself reforming; no one thinks that simply cutting tax rates counts as "tax reform." Therefore, getting rid of loopholes doesn't prevent tax reform. It is tax reform! Ryan could, I suppose, argue that removing the low-hanging fruit makes a larger bill harder, but I really don't see why. Every tax provision has lobbyists and interest groups supporting it. Having fewer provisions to eliminate means fewer people objecting to the bill.
Indeed, separating tax increases (however obtained) from the main tax reform bill would make tax reform far more likely, not less likely. Revenue-raising tax reform is basically impossible. Any comprehensive tax reform is difficult because the benefits are general and the costs specific, and usually carried by well-organized, influential groups. Add to that increases in overall revenue, and you make that equation even worse. And that's without the reality that large groups of Republicans (for better or worse) simply will not support higher revenues, even if the GOP leadership might grudgingly go along. No, if you really care about tax reform, the best plan is to divorce it from any search for higher revenues, which would mean accepting higher taxes elsewhere if you have to do it at all.
But mainly, the argument makes no sense. If you really want tax reform, you shouldn't care whether it comes all in one bill or piecemeal.
Nice catch!
Thursday, January 3, 2013
Looking Back at the Cliff
I'm late to this post, so I'm just going to do it scattershot-style...
First, I'll give you some links. Of course you're going to want to start with what Sarah Binder says. See also Simon Jackman on voting in the House, And Jared Bernstein is worth reading on the policy and the politics.
Meanwhile, I wound up not having a post-length reaction, but I have a bunch of small points, so here they are before they get too stale:
* "Permanent" in budget-speak is meaningful and important, but it doesn't mean what "permanent" means in ordinary language. If Democrats have the votes to do it in the future, there's nothing to stop them from raising taxes on the $250 and up group that they failed to raise taxes on this time. Same thing if Republicans have the votes to cut the upper-level tax rates.
* There's a difference between wanting to vote against something and wanting it to lose. It's very possible -- likely, in my guess -- that a majority of Republicans in the House wanted the deal to pass. They just didn't want to vote for it. If that's true, then they might be a lot more happy with Speaker Boehner than they will admit in public.
* What about the role of the Plan B fiasco? It never made much sense in the first place; what exactly does Boehner have to show for it if he does get Plan B through the House? Maybe it helps in the spin war, but it's hard to see how it changes the negotiations. However, while I don't want to say he planned it this way, it probably did help in the endgame. Remember when the conference reportedly rebelled at the thought of passing the final package, and decided to add spending cut amendments and then send it back to the Senate? That collapsed quickly -- most likely because it rapidly became obvious that they didn't have the votes to do it themselves...which might have taken less time to realize because they had already realized they didn't have the votes for the vaguely similar Plan B.
* The blow-by-blow reporting, of course, is focused on personalities. And it's possible that Joe Biden and Mitch McConnell were able to work together in a way that Boehner and Obama, or Boehner and Harry Reid, couldn't. But be careful about that: we don't know if what changed were the negotiating partners -- or the clock.
* Which leads to another point: it's in the nature of these things that they come down to the last minute. We shouldn't assume the process ran badly just because it played out over New Year's. It's in everyone's interest to work for their best deal, and that usually means holding out up to the deadline. When the deadline is fuzzy, it's no surprise that they'll sort of go past it.
* There hasn't been very much talk about the Democrats' votes. Why wasn't there a parallel incentive on the Democratic side to want the bill to pass but not to vote for it?
* And barring that: surely it must have been very tempting for Nancy Pelosi and the House Democrats to mess with Republicans during the final vote. If indeed there were Republicans who would have supported the bill only if necessary, Pelosi could have withheld Democratic votes, at least for a while, to try to make Republicans play their hands. At the very least, she could have demanded that Republicans provide a respectable number of votes for the package. I think she got that, especially with Senate Republicans strongly supporting it, but it wasn't a sure thing until well into the vote.
OK, I think that's about enough. Time to switch over to the new Congress, anyway.
First, I'll give you some links. Of course you're going to want to start with what Sarah Binder says. See also Simon Jackman on voting in the House, And Jared Bernstein is worth reading on the policy and the politics.
Meanwhile, I wound up not having a post-length reaction, but I have a bunch of small points, so here they are before they get too stale:
* "Permanent" in budget-speak is meaningful and important, but it doesn't mean what "permanent" means in ordinary language. If Democrats have the votes to do it in the future, there's nothing to stop them from raising taxes on the $250 and up group that they failed to raise taxes on this time. Same thing if Republicans have the votes to cut the upper-level tax rates.
* There's a difference between wanting to vote against something and wanting it to lose. It's very possible -- likely, in my guess -- that a majority of Republicans in the House wanted the deal to pass. They just didn't want to vote for it. If that's true, then they might be a lot more happy with Speaker Boehner than they will admit in public.
* What about the role of the Plan B fiasco? It never made much sense in the first place; what exactly does Boehner have to show for it if he does get Plan B through the House? Maybe it helps in the spin war, but it's hard to see how it changes the negotiations. However, while I don't want to say he planned it this way, it probably did help in the endgame. Remember when the conference reportedly rebelled at the thought of passing the final package, and decided to add spending cut amendments and then send it back to the Senate? That collapsed quickly -- most likely because it rapidly became obvious that they didn't have the votes to do it themselves...which might have taken less time to realize because they had already realized they didn't have the votes for the vaguely similar Plan B.
* The blow-by-blow reporting, of course, is focused on personalities. And it's possible that Joe Biden and Mitch McConnell were able to work together in a way that Boehner and Obama, or Boehner and Harry Reid, couldn't. But be careful about that: we don't know if what changed were the negotiating partners -- or the clock.
* Which leads to another point: it's in the nature of these things that they come down to the last minute. We shouldn't assume the process ran badly just because it played out over New Year's. It's in everyone's interest to work for their best deal, and that usually means holding out up to the deadline. When the deadline is fuzzy, it's no surprise that they'll sort of go past it.
* There hasn't been very much talk about the Democrats' votes. Why wasn't there a parallel incentive on the Democratic side to want the bill to pass but not to vote for it?
* And barring that: surely it must have been very tempting for Nancy Pelosi and the House Democrats to mess with Republicans during the final vote. If indeed there were Republicans who would have supported the bill only if necessary, Pelosi could have withheld Democratic votes, at least for a while, to try to make Republicans play their hands. At the very least, she could have demanded that Republicans provide a respectable number of votes for the package. I think she got that, especially with Senate Republicans strongly supporting it, but it wasn't a sure thing until well into the vote.
OK, I think that's about enough. Time to switch over to the new Congress, anyway.
Wednesday, January 2, 2013
Revenue-Raising Tax Reform Still Probably Impossible
I'm inclined to agree with Ezra Klein's post today that liberals are failing to recognize that this week's fiscal cliff deal was actually pretty good for them.
However, it seems to depend on there being a good chance of revenue-raising tax reform. That still seems very unlikely.
I've written about this before, but here's the problem, once again. Tax reform -- eliminating or reducing favorable tax treatments in exchange for lower rates -- is a nightmarish problem to solve under the best of circumstances. Revenue-neutral tax reform almost certainly creates marginal winners and solid losers, which means that tax reform legislation produces intense opposition and mild support. It's hard to pass bills under those conditions! Under normal conditions, revenue-raising tax reform is even worse; it probably tips some marginal winners into marginal losers. But under current conditions, revenue-raising tax reform starts out by losing at least several dozen, and maybe over 100, House Republicans who simply won't vote for anything that's called "tax increase." Even, as we saw yesterday, if you manage to get the votes to set it up as a "cliff" in which opposing it will just trigger some other tax increase.
And you'll have to do that. There's no way that you're going to have any kind of comprehensive tax reform ready in two or three months. So that means a deal involving a fail-safe to "force" Congress to actually raise some target revenue amount. Which means for starters, you're talking two revenue-raising votes -- one for the fail-safe as part of getting past the debt limit, and another when the tax reform bill is finally ready. That's already pretty tough.
But the real trouble is when you get to the tax reform bill. Because it will lose votes from Democrats who support higher revenues, and lose other votes from pragmatic Republicans willing to accept revenues in return for other priorities, you just aren't going to have enough remaining votes. Or at least the chances of having enough votes are very, very small.
Now, maybe that just means that we're stuck with the fail-safe, whatever that is, and assuming you can get the votes for that in the first place. Or maybe it means that (again assuming that the thing is passed in the first place) the revenue-raising tax reform bill fails, the fail-safe kicks in, and then the tax reform bill is redone as revenue-neutral from the higher baseline, and anti-taxers pretend to fall for it. But I just find it very hard to believe that the revenue-boosting tax reform bill gets anywhere. More likely, you wind up with Republicans insisting that lower rates pay for themselves, and Democrats sticking with neutral projections, and no way to bridge the difference. For liberals, it's very easy to see a trap in which the two sides compromise on a halfway point between real revenues and imaginary ones, yielding a bill which actually winds up raising half the revenues they originally voted for (although it would be tough for even that to pass, since it still has the same problem as a larger revenue-raising bill).
The only way that revenue-raising tax reform could be at all useful would be if there are some Republicans who wouldn't vote for plain-vanilla new revenues to get past the debt limit/sequester deadline, but would vote for revenue-raising tax reform backed up by vanilla-ish tax increases. I don't think that group exists, but maybe it does.
But otherwise, I just don't see how it's going to happen. Raising taxes is hard enough, but doing it through tax reform makes it harder, not easier.
Wednesday, December 26, 2012
Which Cans To Kick?
Matt Yglesias has a good item this morning about the possibility of pushing back the fiscal cliff deadline. Good topic, and I'm surprised there hasn't been more talk about it. Congress certainly could extend deadlines on everything for two weeks, four weeks, whatever, to allow time for negotiations to get done.
Of course, there's no reason that all the deadlines would have to be pushed back. Looking at the two big pieces of it:
The issue with taxes is that not only do liberals believe that the expiration of Bush-era tax rates gives them a bargaining advantage, but many Republicans may well prefer that outcome as well. I think if there was any information generated by the Plan B fiasco, it might have been just that: some Republicans really would prefer an eventual outcome that involves relatively higher tax rates as long as they don't have to make an affirmative vote for it. If that's true, then we have to go over the cliff to make a deal; expiration of the tax rates is basically a necessary condition for the votes that are going to be needed.
On the other hand, one would think that there may well be a coalition available to kick the spending can down the road. Most mainstream Democrats simply don't want the spending cuts that the sequester would make, certainly on the domestic side; they may like the level of Pentagon cuts, but even there many Democrats don't, and even more don't want Pentagon cuts carried out this way. On the Republican side, pro-military Members of Congress might be willing to suspend the sequester while a deal is in the works. The resistance to kicking the spending can down the road should come from those who really do want to slash government spending; they might fear, with good reason, that Democrats would lose the incentive to bargain if they believed they could just make the sequester go away. Still, hawks might argue that a one-time, short-term delay would be worth it because it would avoid disruptions in military procurement, and that Republicans could always pull the plug if Democrats responded by stalling and requesting more delays.
I'm not going to go into more of it, but don't forget that Bush-era tax cuts and the spending sequester are only two of the pieces of the "fiscal cliff." Yet another issue in any can-kicking is negotiating whether other things would be part of it, and the more complicated kicking-the-can negotiations get, the more it probably seems to everyone involved that they might as well just stick to the main negotiations.
At any rate: if there's to be any delay, it could come together very, very, quickly, as long as everyone agrees -- or it could take a week or more to pass, if a handful of Senators decide to grind things to a halt. I think the logic is there for a sequestration pause, but it's a pretty close call, depending mainly on the balance within the GOP between Pentagon hawks versus spending cut true believers. But don't expect anything on taxes; that part of the cliff is only going to be avoided if Republicans just decide to surrender in the next few days, and that seems very unlikely.
Of course, there's no reason that all the deadlines would have to be pushed back. Looking at the two big pieces of it:
The issue with taxes is that not only do liberals believe that the expiration of Bush-era tax rates gives them a bargaining advantage, but many Republicans may well prefer that outcome as well. I think if there was any information generated by the Plan B fiasco, it might have been just that: some Republicans really would prefer an eventual outcome that involves relatively higher tax rates as long as they don't have to make an affirmative vote for it. If that's true, then we have to go over the cliff to make a deal; expiration of the tax rates is basically a necessary condition for the votes that are going to be needed.
On the other hand, one would think that there may well be a coalition available to kick the spending can down the road. Most mainstream Democrats simply don't want the spending cuts that the sequester would make, certainly on the domestic side; they may like the level of Pentagon cuts, but even there many Democrats don't, and even more don't want Pentagon cuts carried out this way. On the Republican side, pro-military Members of Congress might be willing to suspend the sequester while a deal is in the works. The resistance to kicking the spending can down the road should come from those who really do want to slash government spending; they might fear, with good reason, that Democrats would lose the incentive to bargain if they believed they could just make the sequester go away. Still, hawks might argue that a one-time, short-term delay would be worth it because it would avoid disruptions in military procurement, and that Republicans could always pull the plug if Democrats responded by stalling and requesting more delays.
I'm not going to go into more of it, but don't forget that Bush-era tax cuts and the spending sequester are only two of the pieces of the "fiscal cliff." Yet another issue in any can-kicking is negotiating whether other things would be part of it, and the more complicated kicking-the-can negotiations get, the more it probably seems to everyone involved that they might as well just stick to the main negotiations.
At any rate: if there's to be any delay, it could come together very, very, quickly, as long as everyone agrees -- or it could take a week or more to pass, if a handful of Senators decide to grind things to a halt. I think the logic is there for a sequestration pause, but it's a pretty close call, depending mainly on the balance within the GOP between Pentagon hawks versus spending cut true believers. But don't expect anything on taxes; that part of the cliff is only going to be avoided if Republicans just decide to surrender in the next few days, and that seems very unlikely.
Monday, December 24, 2012
Mildly Cranky Monday Blogging
The basic, underlying fact of the fiscal cliff negotiations is, well, what you learn in high school civics: the eventual solution will need to pass the House, the Senate, and be signed by the president. Given a Republican House and a Democratic president, that means (1) that the Senate is mostly irrelevant (hey, someone tell Jonathan Weisman at the New York Times), and (2) that it really doesn't matter whether a GOP-only or conservative-only bill can get through the House (hey, someone tell Nate Silver at the New York Times).
And going back a bit: the other underlying fact is that there will, eventually, be a bill or bills that passes. It's not quite 100% certain, the way it is with government shutdown or debt limit showdowns, but it's awful close to certain. The bill or bills may come before January 1 (very unlikely now), in early January, in late January, in February, even in March...but the odds are overwhelming that sooner or later something passes that will undo the bulk of the fiscal cliff tax increases, take care of the Doc Fix and the AMT fix, and do something about the sequester, among other things.
Moreover, everyone involved knows it. Well, maybe not Michele Bachmann and Louie Gohmert, but just about everyone.
So why am I not really cranky? Well, it is possible that a deal will be struck in the Senate that could work; the eventual deal needs the support of Barack Obama and John Boehner, but they don't have to be the ones making the deal (quick reminder: there is a possibility on the table that Republicans in the House could vote present and force Democrats to supply all the votes; that still means Boehner supports a deal, even if the way the support is expressed is by not voting against it). So I'm not ready to completely write off Weisman's article. And I suppose Silver's post is okay as an intellectual exercise; it just doesn't tell us much about how we'll actually get through the fiscal cliff.
But, yeah, the first thing to keep in mind is that something will eventually pass, and it will be a deal that mainstream Democrats and mainstream Republicans can live with. Any analysis of the situation that doesn't accept that starting point is probably not helping us understand it.
Saturday, December 22, 2012
What Mattered This Week?
How about I'll just say that the early-week negotiations over a fiscal cliff deal mattered a lot more than the late-week Plan B fiasco, and leave it at that.
What else? What do you think mattered this week?
What else? What do you think mattered this week?
Friday, December 21, 2012
Read Stuff, You Shold
Happy Birthday to Samuel L. Jackson, 64.
Right to the good stuff:
1. Chris Frates in National Journal gets it right on Plan B and the road ahead; see also a good pre-non-vote post by Matt Yglesias.
2. And of course you want to read Sarah Binder on the debacle.
3. The presidency and gun control, from Brendan Nyhan.
4. Jennifer Duffy with fun facts from the 2012 elections.
5. Philip Klein tries to talk sense to conservatives about realistic expectations from the fiscal cliff.
Right to the good stuff:
1. Chris Frates in National Journal gets it right on Plan B and the road ahead; see also a good pre-non-vote post by Matt Yglesias.
2. And of course you want to read Sarah Binder on the debacle.
3. The presidency and gun control, from Brendan Nyhan.
4. Jennifer Duffy with fun facts from the 2012 elections.
5. Philip Klein tries to talk sense to conservatives about realistic expectations from the fiscal cliff.
Thursday, December 20, 2012
No, Boehner Isn't Nuts
Speaker John Boehner is getting pretty bad reviews pretty much everywhere for his gambit of submitting a Plan B for a House vote, with Plan B made up of a set of tax policies which can't possibly become law. Democrats and some centrist types are upset with him because Plan B meant walking away from budget talks with the president just as they were apparently getting close to a deal. Conservatives, meanwhile, are against Plan B because it involves voting for what they consider a tax increase, with rates going up for a tiny group of highest-income filers (up compared with where they are now; of course, rates are scheduled to go up for lots of people if Congress does nothing by January 1). All of which leads to comments about Boehner being a very weak Speaker who can't control his own conference.
I think that's the wrong way to think about it. It's correct that Boehner can't order his conference to do whatever he wants; nor will they automatically trust what he says. But that's normal for all Speakers.
So what is Boehner up to? He knows -- knows -- that the election returns almost certainly meant that tax rates on at least some upper income filers were going to go up,* and that Republicans were either going to have to vote for a bill to set those tax rates before or after the Bush rates expired. What he might not know, however, is whether and to what extent his Members cared about the timing of the vote. How much were they willing to give up to push the bill past January 1 so that they could sell it as a tax cut (even though it would do exactly the same thing as a pre-January vote)? The Plan B vote might generate some information about that. Anyone voting for it would presumably be willing to vote for an overall fiscal cliff deal this month, after all, and pushing it to a vote might be the best way for Boehner to get a sense of whether he can get the votes for a deal -- or if he should just wait until January, even if it risks getting him a worse deal. More than that: it also could give him a sense of whether the Senate-passed taxes-only bill could pass the House. That one is a lot easier; it would presumably get every Democrat and therefore only need a small number of Republicans, whereas an overall deal would probably require a majority of both parties in order to pass (since Democrats wouldn't support it without Republican votes).
Will it work? Hard to say. It's easy to imagine Plan B winding up with basically zero votes if it comes up short -- I can very much imagine a scenario in which the vote on the House floor stalls at 200, and then everyone flips to "no" before the gavel comes down. While that would give Boehner some information (just the ongoing whip count gives him better information than he would have had without scheduling a vote), itt wouldn't accomplish the trick of making 218 Republicans on record voting for a tiny bit higher taxes, and therefore presumably more open to voting for a tiny bit more (that is: I think conservatives who are urging a no vote for this reason are basically correct about this).
Remember, at some point, House Republicans -- at least some of them, and probably more than half -- are going to have to vote for a tax bill which sets taxes higher than a full extension of current rates would set them. It might happen sooner, it might happen later, but it's going to happen.** Boehner knows that. Every House Republican should, and probably does, know that, although they might not know which of them will have to do it. Come to think of it, Plan B might not just be a method for Boehner to generate information; it also might be a way for him to teach his conference some of the basic facts of what has to happen, and their place in it.
And meanwhile...yeah, it wastes a few days of the Boehner/Obama negotiations, but even there it's certainly possible that the number-crunchers and the legislation-drafters are hard at work turning their almost-framework into the details they'll eventually need. And meanwhile: if he learns he has the votes to pass a mega-deal now then he can move ahead with one; if he learns he doesn't, then he can let everyone go home for the year and avoid the disaster of making a deal and then having it collapse on the House floor.
Put it all together, and I'm not at all convinced that Boehner is making any sort of mistake by scheduling the Plan B vote.
*Almost certainly? Yeah; I think it's at least vaguely possible in theory that Republicans could have found some trade that Democrats would accept, but in reality they don't actually value tax cuts for rich people quite that high. For example, what if Republicans said that they would vote for a serious climate bill in exchange for full renewal of the Bush-era tax cuts? Democrats would have to go for that, wouldn't they?
**Okay, there is one other way out of this for them; the idea they were floating a while back to vote "present" on a tax bill and let the Democrats pass it. Again, part of the question here is whether GOP-aligned groups see any difference in slightly different House Republican actions which deliver the same result.
I think that's the wrong way to think about it. It's correct that Boehner can't order his conference to do whatever he wants; nor will they automatically trust what he says. But that's normal for all Speakers.
So what is Boehner up to? He knows -- knows -- that the election returns almost certainly meant that tax rates on at least some upper income filers were going to go up,* and that Republicans were either going to have to vote for a bill to set those tax rates before or after the Bush rates expired. What he might not know, however, is whether and to what extent his Members cared about the timing of the vote. How much were they willing to give up to push the bill past January 1 so that they could sell it as a tax cut (even though it would do exactly the same thing as a pre-January vote)? The Plan B vote might generate some information about that. Anyone voting for it would presumably be willing to vote for an overall fiscal cliff deal this month, after all, and pushing it to a vote might be the best way for Boehner to get a sense of whether he can get the votes for a deal -- or if he should just wait until January, even if it risks getting him a worse deal. More than that: it also could give him a sense of whether the Senate-passed taxes-only bill could pass the House. That one is a lot easier; it would presumably get every Democrat and therefore only need a small number of Republicans, whereas an overall deal would probably require a majority of both parties in order to pass (since Democrats wouldn't support it without Republican votes).
Will it work? Hard to say. It's easy to imagine Plan B winding up with basically zero votes if it comes up short -- I can very much imagine a scenario in which the vote on the House floor stalls at 200, and then everyone flips to "no" before the gavel comes down. While that would give Boehner some information (just the ongoing whip count gives him better information than he would have had without scheduling a vote), itt wouldn't accomplish the trick of making 218 Republicans on record voting for a tiny bit higher taxes, and therefore presumably more open to voting for a tiny bit more (that is: I think conservatives who are urging a no vote for this reason are basically correct about this).
Remember, at some point, House Republicans -- at least some of them, and probably more than half -- are going to have to vote for a tax bill which sets taxes higher than a full extension of current rates would set them. It might happen sooner, it might happen later, but it's going to happen.** Boehner knows that. Every House Republican should, and probably does, know that, although they might not know which of them will have to do it. Come to think of it, Plan B might not just be a method for Boehner to generate information; it also might be a way for him to teach his conference some of the basic facts of what has to happen, and their place in it.
And meanwhile...yeah, it wastes a few days of the Boehner/Obama negotiations, but even there it's certainly possible that the number-crunchers and the legislation-drafters are hard at work turning their almost-framework into the details they'll eventually need. And meanwhile: if he learns he has the votes to pass a mega-deal now then he can move ahead with one; if he learns he doesn't, then he can let everyone go home for the year and avoid the disaster of making a deal and then having it collapse on the House floor.
Put it all together, and I'm not at all convinced that Boehner is making any sort of mistake by scheduling the Plan B vote.
*Almost certainly? Yeah; I think it's at least vaguely possible in theory that Republicans could have found some trade that Democrats would accept, but in reality they don't actually value tax cuts for rich people quite that high. For example, what if Republicans said that they would vote for a serious climate bill in exchange for full renewal of the Bush-era tax cuts? Democrats would have to go for that, wouldn't they?
**Okay, there is one other way out of this for them; the idea they were floating a while back to vote "present" on a tax bill and let the Democrats pass it. Again, part of the question here is whether GOP-aligned groups see any difference in slightly different House Republican actions which deliver the same result.
Wednesday, December 19, 2012
Read Stuff, You Should
Happy Birthday to Kristy Swanson, 43. Sure, she's not the real Slayer, and not even the real Mannequin. But so what?
The good stuff:
1. It's good to read what smart outsiders say about you -- here's Alex Massie on Newtown.
2. Stan Collender is not optimistic about a deal before January 1. Jonathan Cohn has more.
3. Michael Linden notes that John Boehner is extremely selective as to whether interest on debt counts as government "spending" or not.
4. Which president:
5. And Mary Elizabeth Williams interviews the great Julie Brown.
The good stuff:
1. It's good to read what smart outsiders say about you -- here's Alex Massie on Newtown.
2. Stan Collender is not optimistic about a deal before January 1. Jonathan Cohn has more.
3. Michael Linden notes that John Boehner is extremely selective as to whether interest on debt counts as government "spending" or not.
4. Which president:
under our institutions there was no middle ground for the negro race between slavery and equal citizenship. There can be no permanent disfranchised peasantry in the United States. Freedom can never yield its fullness of blessings so long as the law or its administration places the smallest obstacle in the pathway of any virtuous citizen.Answer? That's Garfield, in his inaugural address in 1881. I know very little about Garfield other than "disappointed office seeker," so I found it interesting. From Kenneth Lowande; part of a series from the Miller Center.
5. And Mary Elizabeth Williams interviews the great Julie Brown.
Thursday, December 6, 2012
Catch of the Day
To Brad DeLong, for debunking some bad budget history:
Hmmm...I think I'll sneak something else in here at the bottom. Steve Kornacki had a history of GOP tax monomania the other day which was mostly excellent, but I do have one small quibble (surprising, because he's extremely reliable on this sort of thing). Anyway, it doesn't really matter to the main point he's making, but he conflates old-fashioned Eastern Establishment Republicanism with opposition to post-1978 GOP tax policy, so he winds up saying that of the 1990 budget fight: "At the time, the top Republican in the Senate (Bob Dole) and the top Republican in the House (Bob Michel) were also Eisenhower-types who’d never been comfortable with supply-side." I don't think so. The key here is that the old split was between Taft Republicans and Ike/Dewey Republicans, and it was the Taft side that really cared about budget deficits -- and while they were certainly anti-spending, they were not anti-tax. In other words, they were real deficit hawks (and got made at Ike when he supported deficits). I'd classify Dole, certainly, and probably Michel too as solidly on the Taft side of that divide. The supply-side idea, and the fixation on low taxes in general, should be seen as a movement within the conservative side of the party, not one separating conservatives from Eastern Establishment types.
Anyway, back to economic and budget history: nice catch!
Why 1970--when nothing happens to derange either the pattern of deficits as a share of GDP or the trajectory of the debt-to-GDP ratio--rather than 1980, when the election of Ronald Reagan does change the pattern of deficits and the trajectory of the debt-to-GDP ratio?Something that I'm amazed at is the success of the idea that the prosperity of the second half of the 1990s simply doesn't count. Yes, of course, some of it was unsustainable. All of it? Nope. And you know what? It existed, regardless. Unless one believes that subsequent policies were ideal -- does anyone? -- then it's very hard to say that it was responsible for the problems of the early 2000s. Let alone the recession beginning in 2007, or the crash in 2008. And if it wasn't responsible for those problems, then whose to say we shouldn't count the good times as, well, good times? I mean, yes, some people thought they were richer than they really were, or would be, because they had paper gains in the stock market that would never be realized (although some people, of course, did realize those gains). But people were also working, producing goods and services and getting paid for them, all of which made them individually and the national as a whole more wealthy. That's real, not phony.
Why speak of the late 1990s only as the era of the dot-com boom (which makes about 1/4 of the difference for the deficit) rather than the era of Clinton tax increases and spending cuts (which make about 3/4 of the difference for the deficit)--both of which were very hard-fought and hard-won, and then casually trashed and reversed by George W. Bush and his Republicans in the early 2000s?
I read this, and I sense--from Thornton and Taylor--a willful denial of a lot of the past generation's American economic history.
Hmmm...I think I'll sneak something else in here at the bottom. Steve Kornacki had a history of GOP tax monomania the other day which was mostly excellent, but I do have one small quibble (surprising, because he's extremely reliable on this sort of thing). Anyway, it doesn't really matter to the main point he's making, but he conflates old-fashioned Eastern Establishment Republicanism with opposition to post-1978 GOP tax policy, so he winds up saying that of the 1990 budget fight: "At the time, the top Republican in the Senate (Bob Dole) and the top Republican in the House (Bob Michel) were also Eisenhower-types who’d never been comfortable with supply-side." I don't think so. The key here is that the old split was between Taft Republicans and Ike/Dewey Republicans, and it was the Taft side that really cared about budget deficits -- and while they were certainly anti-spending, they were not anti-tax. In other words, they were real deficit hawks (and got made at Ike when he supported deficits). I'd classify Dole, certainly, and probably Michel too as solidly on the Taft side of that divide. The supply-side idea, and the fixation on low taxes in general, should be seen as a movement within the conservative side of the party, not one separating conservatives from Eastern Establishment types.
Anyway, back to economic and budget history: nice catch!
Talking "Fiscal Cliff"
I completely endorse Kevin Drum's smart post today about liberal complaints about the name "fiscal cliff" for the convergence of a spending sequester, expiring tax rates, and other things. Drum says, correctly, that it's the name we're stuck with regardless of what anyone wants at this point, and also that it's not really all that easy to manufacture this stuff and have it stick.
Beyond that, the really important point is that in almost every case, what we call this stuff matters a whole lot less than people think, and probably not at all.
Remember, there's a real bias here: most of the people who talk about and argue about what things are called have a major personal interest in...word choice. Actually, in both senses of interest; a lot of people in the argument have a self-interest in people caring about word choice, but they also simply find word choice interesting.
At any rate, my view is that there's basically no evidence that it would make any difference at all that whether we call all of this the "fiscal cliff" or something more accurate. Similarly, pick an issue: it almost certainly didn't matter that people came to call the recent health care reforms "Obamacare," or that people called certain taxes a "death tax." If you can produce evidence, fine, but I'll warn you right now: showing that policies poll differently when you call them different things is not evidence that those different names have any effects on which policies are adopted. You need more than that, and I don't think you're going to find it.
As for the present case: it's of course all kinds of true that "fiscal cliff" is a terrible name for it. But I'm just baffled at the idea that anything would be different if it was called something else. I mean, it's not even a question here, as it is with the estate/death tax, of what one thinks of the policy; it's a question of what to call the process, and renaming it doesn't seem to me to favor either party or any interest.
I suppose it may be the case that some reporters, and beyond them the wider public, might understand what will happen in January without a deal better if the process had a better name. But I don't think that's affecting anything. The policy arguments here are pretty important, but what to call it just doesn't matter much.
Beyond that, the really important point is that in almost every case, what we call this stuff matters a whole lot less than people think, and probably not at all.
Remember, there's a real bias here: most of the people who talk about and argue about what things are called have a major personal interest in...word choice. Actually, in both senses of interest; a lot of people in the argument have a self-interest in people caring about word choice, but they also simply find word choice interesting.
At any rate, my view is that there's basically no evidence that it would make any difference at all that whether we call all of this the "fiscal cliff" or something more accurate. Similarly, pick an issue: it almost certainly didn't matter that people came to call the recent health care reforms "Obamacare," or that people called certain taxes a "death tax." If you can produce evidence, fine, but I'll warn you right now: showing that policies poll differently when you call them different things is not evidence that those different names have any effects on which policies are adopted. You need more than that, and I don't think you're going to find it.
As for the present case: it's of course all kinds of true that "fiscal cliff" is a terrible name for it. But I'm just baffled at the idea that anything would be different if it was called something else. I mean, it's not even a question here, as it is with the estate/death tax, of what one thinks of the policy; it's a question of what to call the process, and renaming it doesn't seem to me to favor either party or any interest.
I suppose it may be the case that some reporters, and beyond them the wider public, might understand what will happen in January without a deal better if the process had a better name. But I don't think that's affecting anything. The policy arguments here are pretty important, but what to call it just doesn't matter much.
Wednesday, November 28, 2012
Read Stuff, You Should
Happy Birthday to Dave Righetti, 54. That's the pitching coach of the World Series Champion (and two-time champion) San Francisco Giants. I don't know of any similar story: he's been retained as the pitching coach under three different managers. Who knows with coaches, but he certainly seems to be first-rate. Also a terrible Giants FA signing, long ago.
A little good stuff:
1. Great question from Tim Fernholz: "Why isn't anyone...asking about Lael Brainard for Treasury Secretary?" This blog has been woefully behind on this story; Wesleyan boosterism (Brainard is not only Wesleyan '83 but also CSS '83) should be a major Plain Blog running theme...I think the eldest daughter's plans to go elsewhere had me off my Wes boosterism of late, but I should get back to it. There's also the case on the merits, and Fernholz does a good job with it.
2. I suspect that few will be freed by the (relatively) non-election atmosphere for the next year or so more than Ross Douthat. He's taken up a campaign against the payroll tax; here's the latest installment. I'm not sure I agree, but I think he's generally stronger on policy than on electoral politics, and that's doubly true with the constraints that being a NYT conservative place on him.
3. Harold Pollack interviews Paul Starr on the ACA. Must-read for anyone interested in health care reform.
4. Wonkbloggers Suzy Khimm, Ezra Klein, Dylan Matthews, and Brad Plumer have compiled the Biggest Fiscal Cliff FAQ Ever. Helpful, obviously.
5. And Alyssa Rosenberg asks why TV hasn't mastered the political procedural. Good item, but oddly missing any consideration of Yes, Minister.
A little good stuff:
1. Great question from Tim Fernholz: "Why isn't anyone...asking about Lael Brainard for Treasury Secretary?" This blog has been woefully behind on this story; Wesleyan boosterism (Brainard is not only Wesleyan '83 but also CSS '83) should be a major Plain Blog running theme...I think the eldest daughter's plans to go elsewhere had me off my Wes boosterism of late, but I should get back to it. There's also the case on the merits, and Fernholz does a good job with it.
2. I suspect that few will be freed by the (relatively) non-election atmosphere for the next year or so more than Ross Douthat. He's taken up a campaign against the payroll tax; here's the latest installment. I'm not sure I agree, but I think he's generally stronger on policy than on electoral politics, and that's doubly true with the constraints that being a NYT conservative place on him.
3. Harold Pollack interviews Paul Starr on the ACA. Must-read for anyone interested in health care reform.
4. Wonkbloggers Suzy Khimm, Ezra Klein, Dylan Matthews, and Brad Plumer have compiled the Biggest Fiscal Cliff FAQ Ever. Helpful, obviously.
5. And Alyssa Rosenberg asks why TV hasn't mastered the political procedural. Good item, but oddly missing any consideration of Yes, Minister.
Tuesday, November 20, 2012
Read Stuff, You Should
Happy Birthday to Joe Biden, 70. The Practically Perfect Veep.
Some good stuff:
1. Lessons from 2012 from The Gamble, the campaign book by John Sides and Lynn Vavreck.
2. Jonathan Chait on the fiscal cliff.
3. Rod Dreher on Marco Rubio, Genesis, liberals and conservatives. I think he's right in principle about (many) liberals, but to be fair: there are plenty of Republican politicians who do, in fact, seem to be actually anti-science, whether or not particular strains of Christian belief are inherently anti-science.
4. "The Rich People Who Don't Know How Tax Rates Work," from Dave Weigel; see also Kevin Drum's "Handy Tax Table for Innumerate Rich People."
5. And Paul Krugman on Paul Ryan.
Some good stuff:
1. Lessons from 2012 from The Gamble, the campaign book by John Sides and Lynn Vavreck.
2. Jonathan Chait on the fiscal cliff.
3. Rod Dreher on Marco Rubio, Genesis, liberals and conservatives. I think he's right in principle about (many) liberals, but to be fair: there are plenty of Republican politicians who do, in fact, seem to be actually anti-science, whether or not particular strains of Christian belief are inherently anti-science.
4. "The Rich People Who Don't Know How Tax Rates Work," from Dave Weigel; see also Kevin Drum's "Handy Tax Table for Innumerate Rich People."
5. And Paul Krugman on Paul Ryan.
Sunday, November 18, 2012
Sunday Question for Liberals
Okay, same question: what would you consider a good solution to the issues involved in the fiscal cliff?
Sunday Question for Conservatives
What, in your view, would be a good solution to the issues surrounding the fiscal cliff?
Thursday, November 1, 2012
Read Stuff, You Should
Happy Birthday to Marcia Wallace, 70.
Quickly to some good stuff:
1. Dylan Mathews and Ezra Klein bring us a revenue calculator: make Mitt Romney's tax plan add up!
2. If you like that sort of thing, perhaps you'll like Joseph Cera's electoral college simulator.
3. I missed this for some reason, but you shouldn't: E.J. Graff on freedom.
4. What exactly is up with GOP attacks on the plain facts of the polls? Robert Farley speculates, sensibly.
5. And I think Alyssa Rosenberg is largely right in arguing against Joss Whedon for Star Wars, and especially for the tendency to think that pretty much he should make all the movies and all the TV shows. But I'd say Buffy vs. Angel at the end of Season 2 and Buffy vs. Faith at the end of Season 3 were both pretty awesome, and that he handled the big blowout in The Avengers about as well as anyone possibly could. Also, I'm trying really, really, hard to stay out of any of these discussions, especially on twitter, but I'll add that anyone who thinks Ronald Moore would be good for Star Wars either doesn't get BSG/DS9, or really wants Star Wars to be far, far, far, more about The Force than it ever has been. But if there is a non-Jedi scoundrel role, hard to think of anyone better than Katee Sackhoff to play it.
Quickly to some good stuff:
1. Dylan Mathews and Ezra Klein bring us a revenue calculator: make Mitt Romney's tax plan add up!
2. If you like that sort of thing, perhaps you'll like Joseph Cera's electoral college simulator.
3. I missed this for some reason, but you shouldn't: E.J. Graff on freedom.
4. What exactly is up with GOP attacks on the plain facts of the polls? Robert Farley speculates, sensibly.
5. And I think Alyssa Rosenberg is largely right in arguing against Joss Whedon for Star Wars, and especially for the tendency to think that pretty much he should make all the movies and all the TV shows. But I'd say Buffy vs. Angel at the end of Season 2 and Buffy vs. Faith at the end of Season 3 were both pretty awesome, and that he handled the big blowout in The Avengers about as well as anyone possibly could. Also, I'm trying really, really, hard to stay out of any of these discussions, especially on twitter, but I'll add that anyone who thinks Ronald Moore would be good for Star Wars either doesn't get BSG/DS9, or really wants Star Wars to be far, far, far, more about The Force than it ever has been. But if there is a non-Jedi scoundrel role, hard to think of anyone better than Katee Sackhoff to play it.
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