The title is the story. Obama's Deficit Commission — you may as well own it, sir — Obama's voluntarily created Deficit Commission proposal:
"clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans."That's Paul Krugman, who goes on to ask, "And what does any of this have to do with deficit reduction?"
Or, as we put it when the proposal first came out: "From your pocket to mine, sucker."
You should memorize this — the "Deficit" Commission proposal represents a major transfer of wealth to wealthy Americans. Who wrote the report? (Wealthy Americans.) Who will vote on it? (Wealthy Americans.) Done and done.
The detail, for those who want to see the ugly, from the New York Times initial report:
The proposed simplification of the tax code would repeal or modify a number of popular tax breaks — including the deductibility of mortgage interest payments — so that income tax rates could be reduced across the board. Under the plan, individual income tax rates would decline to ... 23 percent on the highest bracket (now 35 percent). The corporate tax rate, now 35 percent, would also be reduced, to as low as 26 percent.Reagan only managed to lower the top marginal rate to 28%. We're being robbed in front of our eyes — according to Krugman the money will come from the middle class (natch) by:
eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.But what about the actual deficit, you ask? Oh, that:
It’s true that the PowerPoint contains nice-looking charts showing deficits falling and debt levels stabilizing. But it becomes clear, once you spend a little time trying to figure out what’s going on, that the main driver of those pretty charts is the assumption that the rate of growth in health-care costs will slow dramatically. And how is this to be achieved? By “establishing a process to regularly evaluate cost growth” and taking “additional steps as needed.” What does that mean? I have no idea.His closing:
It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda ... tax cuts for the rich and erosion of the social safety net.And that doesn't begin to touch what Dave Dayen calls the "killer app" in the proposal —"Cap revenue at or below 21% of G.D.P." That would kill progressive government, one that "promotes the general welfare," forever. A revolutionary force at work, implacable and relentless.
Clearly this firestorm will cause the proposal to shift. But this is now one pole of the tent, the de facto starting point for discussion. I'm willing to bet a year's supply of perfumed cat litter that Obama will look for a "middle ground" on which to surrender.
What you can do. Democrats were not put in office to do this. Perhaps they should be made to know that.
GP
