Republicans on the super committee made an offer they thought the Democrats couldn’t refuse. The GOP agreed to raise taxes $300 billion dollars, a departure from their no-tax stand. One catch, they want to cut taxes $3.7 trillion first.
The net effect of the GOP deal is a $3.4 trillion dollar tax cut. The super committee is at an impasse over the issue of balancing spending cuts and new revenue to pay down the debt.
Who wouldn’t take that deal? Democrats rejected it. They did the math and realized there was no GOP concession on revenue at all. Grover Norquist was relieved. All but 6 Republicans in the House and 4 in the Senate signed a pledge to Norquist to never raise taxes—ever for anything.
Republicans want to make Bush tax cuts permanent
It seems that Republicans on the super committee did not get the memo that the task of the special committee is to find a way to reduce the national debt, not increase it. The debt was essentially created because of the Bush tax cuts. So what is the GOP proposal to reduce the debt? Make the temporary Bush tax cuts permanent costing an additional $3.7 trillion over the next 10 years.
This is like getting on a freeway to go west and putting the car in reverse. Not only won’t you get to your destination, but the results will most likely be catastrophic. There is an old adage. If you find yourself in a hole, quit digging. Republican economics apparently is “dig baby dig.”
Super Committee suspends meeting; is failure eminent?
In light of the impasse on the issue of taxes on the top 1% of wage earners, the super committee canceled its meeting Tuesday. Neither side saw any reason for optimism. I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal,” Sen. Patty Murray (D-WA), the Democratic co-chairman of the panel, told reporters.
The committee is charged with finding a way to slash $1.2 trillion dollars from the national debt over the next 10 years. The law creating the committee requires it to submit a proposal to Congress by Thanksgiving. If it can not reach an agreement, then the law provides that automatic cuts to defense spending and entitlements.
Republicans generally want the entire $1.2 trillion to come from spending cuts on items like Social Security, Medicare, Medicaid, the EPA, education, green energy, and grants to local governments. Democrats want to see a balance of cuts and tax increases on the top 1% of wage earners to mitigate the damage done by the Bush tax cuts. Without Congress extending them, the Bush cuts expire in 2012.
The GOP proposal includes $700 billion in spending cuts, $600 in revenue.
The GOP proposal would meet the $1.2 trillion dollar mark by imposing $700 in spending cuts and $600 in revenue. The revenue is $300 in new taxes mostly by eliminating deductions like the mortgage deduction. The rest of the revenue comes from increased fees and premiums for things like Medicare, and sale of government assets.
The spending cuts in the GOP plan would come from cutting agency budgets $240 billion, cutting health care $275 billion, and $150 billion in reducing cost of living increases in things like social security.
In exchanges for this, they want the Bush tax cuts to become permanent. The entire $3.7 trillion to pay for the Bush tax cuts would come from future, unspecified spending cuts—on top of the $700 billion specified in the bill, or it could be added to the debt like it was during the Bush years.
Republicans were praising themselves for the $300 in new revenue. Democrats were saying it is no change in position at all since net taxes, especially on the rich, are decreased by keeping the bush tax cuts for the top brackets. So, the impasse remains.
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