Million Dollar Quartets
Warren Buffett’s Op Ed begins:
SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”
Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.
(click here to continue reading A Minimum Tax for the Wealthy – NYTimes.com.)
Forget-me-not Social Security
And of course, he’s right, but logic has been banned from the modern conservative party. Historical perspective as well, apparently, unless Regan is involved. At least President Obama has said that Social Security is off the table, in the short term at least. Just waiting for Defense spending to join the deficit party – we could halve our military spending every year for the next ten, and still spend more than any other country on the planet. Even the Democrats never seem to mention slicing defense spending as part of the Grand Bargain.
In a speech at the Center for American Progress on Tuesday, Sen. Dick Durbin (D-Ill.) , urged progressives to be open to Medicare and Medicaid reforms as part of long-term deficit talks.
But he also said both entitlement programs, along with Social Security, should be off the table during fiscal cliff negotiations.
“Progressives should be willing to talk about ways to ensure the long-term viability of Social Security, Medicare and Medicaid, but those conversations should not be part of a plan to avert the fiscal cliff,” Durbin said in his remarks.
“I think the point we tried to make in the campaign was the Paul Ryan approach [turning Medicare into a quasi-voucher program] we think threatens the existence of these programs and the services they provide,” Durbin told reporters later in the day. “That’s unacceptable. There has to be a better, more positive approach that saves money and at the end of the day, is going to keep these programs alive.”
Sen. Jeanne Shaheen (D-N.H.) agreed with Durbin that Social Security should be off the table, noting that it has not contributed to the debt.
(click here to continue reading For Fiscal Cliff Talks, Medicare Reform Still On Table For Senate Democrats.)
Greg Sargent adds:
Now this is encouraging. I’m told that representatives of major unions and progressive groups met privately this morning with senior Obama administration officials at the White House — and were pleased with what they heard.
Things can always change at a moment’s notice. But attendees at this meeting came away convinced — for now — that the White House firmly believes it has the leverage in the fiscal cliff talks, and has no intention of budging on the demand for higher tax rates from the rich or on other core priorities.
Indeed, one person at the meeting — which included people from the AFLCIO, AFSCME, SEIU, MoveOn and others — came away convinced that the White House would ultimately prove willing to go over the fiscal cliff if necessary, rather than give ground on core demands, though this is not by any means a desired option and isn’t being discussed as a strategic possibility.
…“They remain in the same place: They expect taxes to go up on the wealthy and to protect Medicare and Medicaid benefits,” the attendee added. “They feel confident that they don’t have to compromise.”
White House officials also signaled in the meeting that they are going to insist that Republicans agree to resolve the need to raise the debt ceiling as part of the fiscal talks — and won’t abide a separate fight over it, attendees said. Also key: Attendees got the impression the White House does not view this looming debt ceiling battle in the same terms as the 2011 fight, where Republicans had the leverage.
(click here to continue reading Reasons to be encouraged about fiscal cliff’s endgame – The Plum Line – The Washington Post.)
For the Sake of Security
David Dayen:
Sen. Dick Durbin (D-IL), who has almost become the liaison to the left for cuts to federal health care programs in the grand bargain, gave a speech today at the Center for American Progress that included a couple important points:
• Durbin sequenced the provisions of the deal, saying that Republicans would have to build the framework on taxes, which includes an increase in the top marginal rates, before any Democrat will even begin to talk about social insurance programs. This seems like a hardline stance, but it just mirrors the dominant conversation, which has focused on taxes to the exclusion of practically everything else.
• Though Durbin has sought to bring rank-and-file Democrats along on a grand bargain that would include cuts to those social insurance programs, he set out some red lines. In addition to rejecting the privatization of Medicare or Social Security and the block granting of Medicaid – a common tactic to reject the extreme view to provide space for more modest but still damaging cuts – Durbin took Social Security almost entirely off the table. This matches White House Press Secretary Jay Carney’s statements yesterday. It does appear that’s been filed away for the time being.
In addition, Durbin said, regarding spending cuts on anti-poverty social programs, “Let me be clear: Those cuts will not happen.” And he sought to line up with the Administration’s viewpoint that any changes to Medicare and Medicaid can happen without cuts to benefits, through payment reforms or provider cuts. This would “strengthen” those programs through the reform, he said. He also wanted to exempt infrastructure spending fully from any cuts.
(click here to continue reading Durbin Outlines Democratic Approach on Grand Bargain | FDL News Desk.)
Spare Change
Brian Beutler:
Democratic leaders, frustrated by the GOP’s unwillingness to reckon with the need to raise taxes, are publicly airing the hard-bargaining demands they’re bringing to budget negotiations with Republicans.
The Senate’s top two Democrats, in separate remarks Tuesday, each said that Congress could avoid looming across-the-board tax increases and spending cuts if House Republicans agree to freeze all the Bush tax rates except those benefitting top earners. If that were accompanied by an increase in the debt limit, and the creation of a separate track for reforming the tax code and social safety net programs in 2013, the near-term austerity problem will be solved, and lawmakers can call it a day.
In other words, Senate Democrats are staking out the position that entitlement reform should not be on the table in fiscal cliff negotiations.
“If we fail to reach an agreement, the average middle-class family will see their taxes go up by $2,200 a year,” said Senate Majority Leader Harry Reid (D-NV) told reporters at his weekly press availability. “As I’ve indicated, the Senate has already reacted to stop that and the House is one vote away from making that a reality for many millions of Americans who are middle class.”
(click here to continue reading Top Democrats Drive Hard Bargiain In Budget Talks | TPMDC.)