Creating Fiscal Strife
Posted: November 29, 2012 Filed under: Catfood Commission, Economy, Federal Budget, Federal Budget and Budget deficit, George W. Bush, Global Financial Crisis, House of Representatives, Medicare, Politics as Usual, Republican politics, Republican Tax Fetishists, Super Committee, The Bonus Class, the GOP, U.S. Economy, U.S. Politics | Tags: fiscal cliff 15 Comments
One of the things that drives me crazy as an economist and a citizen looking at this so-called “fiscal cliff” is that our fiscal strife has been created by the people least likely to suffer from its resolution. Congress gave the Bush administration authority to start a series of unfunded, reckless wars that have lasted well over a decade. Congress passed the Bush administration’s reckless tax cuts and generous loopholes that have benefited the few at the cost of the many. The Bush administration’s and Congress’ lack of oversight and deregulation of the financial services’ industry created a low-risk, gambling casino with the national investment and savings accounts and the debt markets. This led to a huge recession. These are the roots of our fiscal problems. But, the discussions around cleaning up messes in the District mostly surround Social Security which has nothing to do with the national debt and deficit and items that have become more necessary to average Americans since Congress and the Bush Administration broke the country with its bad policies.
Here’s some of the latest examples. Closing loopholes and unnecessary deductions for certain constituents is a good idea. However, which of these things are on the chopping block? Inkling its way up the priority list is the major middle and working class deduction and source of household wealth: the mortgage interest deduction. I have no problem with eliminating second mortgages, mortgages on boats, and mortgages on second properties. These benefit very few people and really serve little policy purpose. Capping the deduction–with an annual COLA adjustment to the median price and below-based mortgages is also fine. However, what are we likely to see?
As the Obama administration and lawmakers on Capitol Hill scramble to defuse automatic spending cuts and tax increases set to take effect Jan. 1, a herd of sacred cows — from Social Security and Medicare to deductions for charitable giving and mortgage interest — are in danger of losing their untouchable status.
Members of both parties have largely steered clear of detailed proposals so far. But plans put forth in the past year by President Obama and Mitt Romney to place limits on annual total tax deductions are likely to crimp the mortgage-interest deduction for certain taxpayers. Top congressional Republicans also have expressed openness to limiting total tax deductions as part of an overall budget deal. In addition, the presidentially appointed Simpson-Bowles fiscal commission suggested scaling back the mortgage-interest deduction as part of its own set of tax-related proposals.
Current law allows homeowners to deduct the interest paid on mortgage balances up to $1 million, including on second homes, as well as on $100,000 worth of home-equity loans. The deduction overwhelmingly benefits wealthier families, partly because they tend to have larger mortgages and pay more interest, and partly because most low- and middle-income Americans do not itemize deductions on their tax returns. It also tends to favor homeowners on the East and West Coasts, as well as those in large cities such as Chicago, where average home prices are higher.
Edward Kleinbard, a tax expert and law professor at the University of Southern California, said the mortgage-interest deduction represents the kind of government “extravagance” that the country no longer can justify, given its fiscal troubles.
“We simply cannot afford wasteful government subsidy programs anymore, and this is one of the most important examples of that,” Kleinbard said. “It’s very much a subsidy to those Americans who need it least.”
Mitch McConnell continues to service Grover Norquist and the Club for Growth. He’s back on his high horse for no tax increases for the wealthy. Ending tax cuts for the wealthy endlessly shown to have no ill-impact on the economy. There is also no real benefit to extending them.
Senate Republican Leader Mitch McConnell (Ky.) slammed the door Thursday morning on Democratic demands to raise tax rates on families earning more than $250,000 per year.
“We’re insisting on keeping tax rates where they are, first and foremost, to protect jobs and because we don’t think government needs the money in the first place,” McConnell said on the Senate floor.
“The problem, as I’ve said, is that Washington spends too much. But if more revenue is the price that Democrats want to exact, then we should at least agree to do it in a way that doesn’t cost jobs and disincentivize rates, as we all know raising rates would do,” he said.
McConnell’s comments came a day after Speaker John Boehner (R-Ohio) shot down a proposal by a senior GOP lawmaker, Oklahoma Rep. Tom Cole, to agree to extend tax rates only for families earning below $250,000 and resume the battle against higher tax rates on the wealthy next year.
Boehner said President Obama and Democrats should focus on finding ways to cut spending and reform entitlement programs.
The fate of the Bush-era tax rates — which will expire for all income levels in January — has dominated the debate over the slew of tax increases and spending cuts that are set to begin next year.
McConnell scolded the president Thursday for sticking fast to his campaign pledge to seek higher taxes on the rich, and made clear that raising tax rates on anyone is unacceptable.
The debate over Medicare is likely to be equally absurd. Medicare needs some reworking. Most of its problems comes from the pharmacy benefit which currently allows Big Pharma to price gouge participants and the taxpayers. But, you wouldn’t know that from the conversation. Republicans are playing games with Amercan’s health. They appear to be clinging to the Ryan’s voucher plan which would be disastrous for the majority of retired seniors.
The austerity crisis talks have hit a peculiar impasse. The problem isn’t, as most analysts expected, taxes, where Republicans seem increasingly resigned to new revenue. It’s Medicare. And the particular Medicare problem isn’t that Democrats are refusing the GOP’s proposed Medicare cuts. It’s that Republicans are refusing to name their Medicare cuts.
Politico quotes a “top Democratic official” who paints the picture simply: “Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s your guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”
That’s partly politics. If nothing else, Republicans are respectful of Medicare’s political potency. Recall that a core Republican message in both the 2010 and 2012 elections was that Democrats, through Obamacare, were cutting Medicare too much. Republicans, already concerned about their brand, don’t want to rebrand themselves as the party of Medicare cuts.
But it’s partly policy, too. The fact is that short of converting the program to a premium support system — a non-starter after they lost the 2012 election — Republicans simply don’t know what they want to do on Medicare.
Scour the various outlets for Democratic policy ideas and you’ll find plenty of proposed Medicare cuts. President Obama’s 2013 budget, for instance, includes hundreds of billions in Medicare cuts (see pages 33-37), and caps the program’s long-term growth at GDP+0.5 percent. More recently, the Center for American Progress released a 46-page proposal for cutting Medicare by almost $400 billion.
Republicans, meanwhile, have focused their energy on a long-term effort to convert Medicare to a premium-support model. Paul Ryan’s 2013 budget kept the Affordable Care Act’s Medicare cuts for the next 10 years and proposed to convert the program to a premium-support model in the future. Mitt Romney’s platform proposed reversing Obamacare’s Medicare cuts and offered a vague framework for converting the program to a premium-support model in the future.
If you dig deep into the Republican think tank world, you can find a few proposals that focus on the near-term.
The current fiscal ‘cliff’ framework appears to place a lot of burden on those least able to take it as well as those least responsible for creating the problems.
Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.” And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had a 30-minute phone conversation Wednesday night — but the private lines of communications remain very much open.
No doubt, there will be lots of huffing and puffing before any deal can be had. And, no doubt, Obama and Congress could easily botch any or all three of the white-knuckle moments soon to hit this town: the automatic spending cuts and expiration of the Bush tax cuts, both of which kick in at the end of this year, and the federal debt limit that hits early next.
Go to the Politico story for a concept of what’s at stake and at issue.
Speaker John Boehner (R-Ohio) said Thursday there had been “no substantive progress” in fiscal-cliff negotiations in the two weeks since congressional leaders met with President Obama.
Boehner, addressing reporters after a meeting with Treasury Secretary Tim Geithner in the Capitol, called on the White House to “get serious” about the talks and warned of a “real danger” that Jan. 1 would come without a deal if President Obama did not offer up specific spending cuts he would be willing to accept.
“Despite claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts,” Boehner said. “Secondly, no substantive progress has been made in the talks between the White House and the House in the last two weeks.
“Listen, this is not a game,” he added. “Jobs are on the line. The American economy is on the line, and this is a moment for adult leadership.”
The Speaker criticized the president for holding “campaign-style rallies” instead of engaging in serious talks.
Thursday Reads: MKULTRA, Offshore Tax Havens, Mitt Romney’s WH Lunch, and a Tom Ricks Update
Posted: November 29, 2012 Filed under: 2012 elections, Mitt Romney, morning reads, U.S. Military, U.S. Politics | Tags: biological weapons, CIA, Eric and Nils Olson, Frank Olson, Ft. Dietrich, James Risen, LSD, memory hole, MKULTRA, tax havens, Torture 11 CommentsGood Morning!!
The CIA keeps hoping that their cold war mind control programs (of which there were many back in the 1950s and 1960s), usually referred to by the umbrella term Project MKultra, will disappear down the memory hole; but occasionally it still rears its ugly head.
Yesterday was one of those occasions. The New York Times published an article by Pulitzer Prize-winning investigative journalist James Risen about a new lawsuit by Eric and Nils Olson that accuses the CIA of covering up the real causes of their father Frank Olson’s death.
First, a little background. Frank Olson was a scientist who worked at Ft. Dietrich in Maryland on top-secret research related to Project MKultra. From Wikipedia:
Frank Olson was a senior U.S. microbiologist at Fort Detrick in Frederick, Maryland.[1] He was recruited from the University of Wisconsin, where his departmental advisor was Ira Baldwin, the civilian scientist who, along with industrial partners like George W. Merck and the U.S. military, established the U.S. bioweapons program in 1943, a time when interest in applying modern technology to warfare was at an all-time high.
His specific research work at Fort Detrick’s Special Operations Division has never been revealed, but he was clearly involved in biological weapons research. He had been assigned as a contact with the CIA’s Technical Services Staff, run by Dr. Sidney Gottlieb and his deputy Robert Lashbruck regarding experiments with bioweapons, toxins, and mind control drugs. This was the MKNAOMI – MKULTRA program, previously known as Project Artichoke and earlier, Project Bluebird, and justified based on claimed Soviet efforts to create a “Manchurian Candidate.” In 1953, as Deputy Acting Head of Special Operations for the CIA, Olson associated with Dr. William Sargant, investigating the use of psychoactive drugs at Britain’s Biological Warfare Centre at Porton Down. Hence, he was privy to the innermost secrets of the CIA interrogation and biowarfare programs.
In 1953, Olson was dosed with LSD without his knowledge at a retreat with his coworkers. Not surprisingly, he freaked out and became “paranoid.” A week later, he tried to resign his position, but his superiors sent him to New York City to see a psychiatrist involved with the CIA’s research, Harold Abramson. That night Olson supposedly committed suicide by jumping out of his 10th floor hotel room. Robert Lashbrook was in the room at the time, but claimed to have no idea how it happened.
Olson’s family had no idea what he had been working on or the details of his “accident.” All this came out after Congress began investigating the CIA’s insane mind control programs in the 1970s.
According to the the Risen article,
Eric and Nils Olson…said they plan to file a lawsuit in United States District Court here on Wednesday accusing the C.I.A. of covering up the truth about Mr. Olson’s death in 1953, one of the most infamous cases in the agency’s history.
During the intelligence reforms in the 1970s, the government gave the Olson family a financial settlement after the C.I.A. was forced to acknowledge that Mr. Olson had been given the hallucinogenic drug nine days before his death. President Gerald R. Ford met with the Olson family at the White House and apologized.
At the time, the government said Mr. Olson had killed himself by jumping out of a hotel window in Manhattan. But the Olsons came to believe that he had been murdered to keep him from talking about disturbing C.I.A. operations that he had uncovered.
Mr. Olson’s sons said that their past efforts to persuade the agency to open its files and provide them with more information had failed, and that a court challenge is the only way to find out the truth.
“The evidence points to a murder, and not a drug-induced suicide,” said Eric Olson, Frank Olson’s older son, who has devoted much of his life to investigating his father’s death. When the government told his family that his father had committed suicide, “one set of lies was replaced with another set of lies,” he said.
The Olson brothers claim that
In 1953, Mr. Olson traveled to Europe and visited biological and chemical weapons research facilities. The Olson family lawsuit alleges that during that trip, Mr. Olson witnessed extreme interrogations, some resulting in deaths, in which the C.I.A. experimented with biological agents that he had helped develop. Intelligence officials became suspicious of him when he seemed to have misgivings about what he had seen, the lawsuit contends. Eric Olson said Frank Olson also appeared to have deep misgivings about the use of biological weapons that was alleged in the Korean War.
According to Risen, it was after Olson expressed his “misgivings” that he was dosed with LSD. The lawsuit was filed yesterday afternoon.
Of course the CIA has never stopped developing methods of torture and mind control, as we learned during the Bush administration when the Abu Ghraib story broke and we began learning about the torture methods that were used on suspected terrorists and the CIA black sites in torture-friendly countries around the world.
I doubt if anything will come of this lawsuit, but I’m happy that Olson’s story and MKultra are back in the news. Perhaps a few people will read about it and wake up to the terrible things our government has been doing for decades and continues to do today.
In other news, the UK Guardian in cooperation with BBC Panorama and the International Consortium of Investigative Journalists (ICIJ) are in the process of publishing their research on Great Britain’s network of offshore tax havens. From the Guardian: Offshore secrets revealed: the shadowy side of a booming industry.
The existence of an extraordinary global network of sham company directors, most of them British, can be revealed.
The UK government claims such abuses were stamped out long ago, but a worldwide joint investigation by the Guardian, the BBC’s Panorama and the Washington-based International Consortium of Investigative Journalists (ICIJ) has uncovered a booming offshore industry that leaves the way open for both tax avoidance and the concealment of assets.More than 21,500 companies have been identified using this group of 28 so-called nominee directors. The nominees play a key role in keeping secret hundreds of thousands of commercial transactions. They do so by selling their names for use on official company documents, using addresses in obscure locations all over the world.
This is not illegal under UK law, and sometimes nominee directors have a legitimate role. But our evidence suggests this particular group of directors only pretend to control the companies they put their names to.
Another article reveals the real identities behind Britain’s secret property deals. Another article reveals how BBC Panorama filmed undercover in offshore tax havens.
Someone should tell Mitt Romney to turn off Fox News and read the Guardian for the next few days.
Speaking of Mitt Romney, he’ll be having lunch with President Obama at the White House today. The Boston Globe reports:
At some point late on Thursday morning, Mitt Romney will be driven to the steps of the White House. He will get out of the car, be escorted to a room adjacent to the Oval Office, and sit down for lunch.
But rather than arriving as an occupant, the one-time presidential hopeful will be a guest in someone else’s house.
In a meeting that has been weeks in the making, Romney will join President Obama for private lunch at the White House just 23 days after he lost the election. It will be the first time they have met since the election, and it follows several weeks in which Romney has started to contemplate life outside of politics.
I wonder if they’ll discuss the “gifts” that Romney claims Obama gave to the “47 percent” in order to get elected? I’m still waiting for mine.
At the Atlantic, Jen Doll writes about What Obama and Romney’s Lunch Might Look Like — or Should.
Mitt Romney and Barack Obama are having lunch! Mitt Romney and Barack Obama are having lunch! This is exciting to Americans because we just spent several mortifying days with our several mortifying relatives eating hopefully decent turkey, and now Romney is in our last-week’s shoes, sort of, as he prepares to sit across a table in a strange kind of tradition, breaking bread with a man he not so long ago vowed to defeat. So, yes, that’s slightly uncomfortable, perhaps. Kind of like the opening montage on Project Runway when those people who got kicked off in the first few episodes are all in your face saying how they’re number one and they’re going to win this whole thing, just watch.
This lunch will happen Thursday. Press is not allowed, which seems advisable. The lunch will be held at the White House (Obama’s home turf advantage) Private Dining Room (“next to the Oval Office in the West Wing”), and is the fulfillment of a promise Obama made on election night, as we reminded you earlier, that the president would meet with his former opponent. This is their first meetup since the election, or as the White House statement puts it, “It will be the first opportunity they have had to visit since the election.” Visit, of course, is the euphemism your grandmother uses.
This lunch, between a couple of men who didn’t seem terribly keen on each other just a few weeks ago, brings up a host of modern-day etiquette questions. Here, we do our best to answer them.
Read the rest at the link. It’s very funny.
The Tom Ricks vs. Fox News story continued into a third day. Ricks was invited to appear on MSNBC and said no. According to the WaPo’s Melissa Henneberger, Ricks’ Fox News putdown was
no mere partisan smackdown; it was more subversive than that, and even more bracing. Because as it turns out, Ricks doesn’t want to play on either the red or the blue team, and has no loftier view of Obama-cheering MSNBC than of Obama-jeering Fox.
When I talked to him Tuesday, he said yeah, actually, he had had some other TV invites, but we shouldn’t waste too much time clicking around looking for his next appearance: “MSNBC invited me, but I said, ‘You’re just like Fox, but not as good at it.’ They wrote back and said, ‘Thank you for your candor.’”
Henneberger asked Ricks if he had planned his Fox News smackdown ahead of time.
“It just kind of tumbled out,” he said, after “this fathead comes on and says the pressure is increasing on the White House; no, they’re backing off! Now their spokesman says I apologized; they’re just making stuff up.”
He told the young woman who pre-interviewed him that he felt the whole issue had been exploited for political reasons, “but my impression was she’s new to the game and thought that because I’m pro-military — and I do consider myself pro-military,” he’d naturally agree with the Foxified narrative.
After three years in the archives researching “The Generals,” Ricks said, “I’m blinking my eyes,” in the TV lights, and taken aback at how much a little truth-telling can set a guy apart around here.
Ricks was even more harsh in an interview with HuffPo yesterday.
Ricks hammered the point home when speaking with HuffPost Live’s Ahmed Shihab-Eldin. In response to Clemente’s statement indicating that Ricks “apologized” after the interview, “ignored the anchor’s question,” and doesn’t have “the strength of character to [apologize] publicly,” Ricks had one thing to say: “that’s horseshit.”
He recounted his hallway conversations once again, which included complimenting Fox News host Bret Baier on his weight loss and telling a Fox News staffer he was tired. “It was not an apology for what was said at all,” he added.
When asked about his decision to turn down an invitation to appear on MSNBC, Ricks said, “Fox really seems to sell outrage as its product, and MSNBC doesn’t as much. But they both seem to me to be running political campaigns almost more than they are running news networks. So I don’t particularly like either. That said, I’m not a fan of TV news generally. I think it’s a lousy place to get your information from.”
That’s all I have for you today. Now it’s your turn. What are you reading and blogging about?
Tom Ricks vs. Fox News, Take 2
Posted: November 27, 2012 Filed under: Republican politics, U.S. Military, U.S. Politics | Tags: Benghazi, Fox News, Hollywood Reporter, Michael Clemente, Thomas Ricks 22 CommentsWhat is the deal with this Tom Ricks story? Fox News sure is touchy these days. A Fox executive told the Hollywood Reporter that after his abruptly terminated interview yesterday, Ricks apologized for telling the truth about the network on the air.
Tom Ricks, a former Washington Post reporter and author of best-selling books Fiasco and The Generals, briefly spoke with FNC’s Jon Scott about the death of four Americans in Benghazi, Libya. In a brief interview, Ricks first said FNC “hyped” the embassy attack and said a bit later that “Fox was operating as a wing of the Republican Party” before Scott ended the interview.
Michael Clemente, executive vp, news editorial at FNC, tells The Hollywood Reporter that Ricks dodged Scott’s question (“When you have four people dead, including the first U.N. ambassador in more than 30 years, how do you call that ‘hype’?”).
“When Mr. Ricks ignored the anchor’s question, it became clear that his goal was to bring attention to himself — and his book,” Clemente said in an e-mail to THR. “He apologized in our offices afterward but doesn’t have the strength of character to do that publicly.”
But Ricks says the apology story is a big ol’ lie. From Politico:
Ricks told POLITICO that Michael Clemente, Fox’s executive vice president of news, made the claim he apologized privately because “when the facts aren’t on their side, they attack the person.”
“Clemente is making it up, and it is sloppy of Hollywood Reporter to not ask him for specifics — what exactly am I alleged to have said? — and also to seek a response from me,” Ricks wrote in an e-mail. “Why are they doing this? Because their MO is that when the facts aren’t on their side, they attack the person.”
Ricks told the Washington Post that
I had told the producer before I went on that I thought the Benghazi story had been hyped. So it should have been no surprise when I said it and the anchor pushed back that I defended my view.
I also have been thinking a lot about George Marshall, the Army chief of staff during World War II, and one of the heroes of my new book. He got his job by speaking truth to power, and I have been thinking that we all could benefit by following his example as much as we can.
After I went off the air I saw some surprised faces in the hallway. One staff person said she thought I had been rude. My feeling was that they asked my opinion and I gave it.
Ricks also told the Hollywood Reporter in an e-mail:
“Please ask Mr. Clemente what the words of my supposed apology were. I’d be interested to know,” he said. “Frankly, I don’t remember any such apology.”
Clemente responded, according to TPM:
“I’m surprised by the General’s utter dishonesty,” Clemente said. “I’ll refresh his memory – what he said following the segment was, ‘Sorry… I’m tired from a non-stop book tour.’ Perhaps now he can finally get some rest.”
Ricks is not a general, but he did write a book called The Generals.
You be the judge. I report, you decide. (This is an open thread.)
Tom Ricks Challenges Fox News on Beghazi; Interview Ends Abruptly
Posted: November 26, 2012 Filed under: open thread, U.S. Military, U.S. Politics | Tags: Benghazi, Fox News, John McCain, Susan Rice, Tom Ricks 31 CommentsTom Ricks, Pulitzer Prize-winning journalist, author, and blogger at Foreign Policy appeared on Fox News this morning, where he was asked by talking head Jon Scott why John McCain has toned down his attacks on Susan Rice recently. Ricks opted to answer truthfully. From Raw Story:
“I think that Benghazi was generally hyped by this network especially,” Ricks explained. “And now that the [2012 presidential] campaign is over, I think [McCain] is backing off a little bit. They’re not going to stop Susan Rice from being secretary of state.”
At that point, Scott shifted the interview’s focus from McCain to defending his employer, asking Ricks, “How do you call that hype” when four Americans died in the Benghazi attacks?
“How many security contractors died in Iraq, do you know?” Ricks wondered.
“I don’t,” Scott admitted, seemingly at a loss for words.
“No, nobody does because nobody cared,” Ricks pointed out. “Several hundred died but there was never an official count done of security contractors dead in Iraq. So when I see this focus on what was essentially a small fire fight, I think — number one — I’ve covered a lot of fire fights, it’s impossible find out what happened in them sometimes.”
“And second, I think the emphasis on Benghazi has been extremely political, partly because Fox was operating as wing of the Republican Party,” the author added.
Oops! And suddenly the interview with the distinguished military expert was terminated.
This is an open thread.













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