(Please join us for a live chat during the President's budget address today beginning at 1:15pm Eastern. The speech itself will start around 1:35pm, we're told.)
We're at a cross-roads, obviously, as a nation. Obama caved on the Bush tax cuts, on the deficit "showdown" last week, and now, according to the Washington Post, will make a major speech today at 1:35PM Eastern on the deficit and Paul Ryan's "joke of a plan" (per Paul Krugman) in the face of GOP threats not to raise the debt ceiling unless they get all of their way.
This is actually a huge opportunity, says Rachel Maddow in the clip below. What the Republicans want is hugely unpopular. What will Obama do? Will he find his inner "winner" and shoot the easy layup? Or will he "kick his base in the teeth" one more time and fold one more time?
Rachel sets the scene:
The choices are pretty clear:
▪ Tax cuts for millionaires. The Paul Ryan plan reduces the top marginal tax rate to 25%, forcing $2.9 billion in spending cuts over 10 years to achieve "balance". ("From your pocket to mine, sucker.")
You'll note that this is almost identical to what the Obama "Deficit" Commission recommended. That Wash Post article linked above says we may see this recommendation forwarded by Obama himself on Wednesday.
For what it's worth, Obama's "Deficit" Commission also wants to lower the nominal corporate tax rate, from 35% to 26%. That, of course, would increase GE's tax refund considerably. Lucky them. If Obama chooses this option, let's see if that sweet proposal comes up on Wednesday as well.
▪ Tax hikes for millionaires. Unlike the tax breaks mentioned above, tax hikes on millionaires are immensely popular — 81% of actual Americans favor this method of closing the deficit gap (1:10 in the clip).
This is actually doable. As John pointed out in this great post, all Obama has to do regarding the debt ceiling is to hand the decision to the GOP House and say "It's on you."
One way to do that would be simply to say:
"Look, I hate deficits, just like you do. My proposal is to raise revenues. Your proposal is to cut spending. So I'll give you two choices — my proposal, or we meet halfway. Halfway means a clean bill that raises the debt limit while we discuss it further. Period. Your call."Even I could play that hand and win.
▪ Those pesky cultural riders. They are all over the map — kill EPA, kill PBS, kill safe drinking water (what, you can't buy bottles?), kill winter heat for old people, even kill wolves from helicopters. A lot of killing in those riders (literally).
So, what will Barack Obama do? Will he find his inner FDR? Or confirm his title as Mr. Surrender You Can Count On? That title is at risk of becoming his brand, at this point.
I do believe this is his absolute last chance with anything resembling his base (as opposed to his own paid retainers). A surrender here would guarantee his legacy as the "Democrat who killed the New Deal." His picture would go up in the Reagan Library.
I also think an Obama surrender here would tear the party apart (good news? who knows?). And it just might make our newest addition to the blog, Tom Wellington, the prescient Democrat who first publicly predicted Obama's defeat in 2012.
There's a lot riding on the debt limit deal, and the clock is ticking. Is Obama really Mr. Surrender You Can Count On? If so, the next two years will be a train wreck. Here's hoping for better.
GP
(By the way, if you'd like to read more about that 17% number, the percentage people opposed to tax hikes on millionaires, click the "Read More" link below.)
About that 17%, the people who oppose tax hikes on the rich. That looks like a good proxy for the ruling classes plus the retainer class — the professionals, the lawyers, the doctors, the yuppies, the corporate middle-men, the software engineers, the marketing managers — everyone who actually benefits from "trickle down". These are the people who make the system actually work, by doing the actual creating and administering.
That's also roughly the percentage of beneficiaries in a classic top-down agrarian economy, ancient Rome for example. Five main layers: (1) the ruler and his family; (2) the senators, knights and priests (barons and the like); (3) the retainers (administrators, bureaucrats, merchants, soldiers, who got land after their service, etc.); (4) the productive masses — the peasants, artisans, and slaves — who actually created the wealth; (5) the destitute.
Of these groups, the first three constitute about 15% of the population, and (with the exception of merchants) live off the wealth created by group four, the peasants, artisans and slaves (about 80% of everyone). The destitute (bottom 5%) are those rotting in the streets.
The goal of the system is to take as much as possible of the peasants' created wealth (via, yes, taxes) without rendering them unproductive and send it upward. (There's a great discussion of this in John Dominic Crossan's The Historical Jesus, if you're interested. He has more groups, but the result is the same, as are the ratios.)
Anyway, that 17% is roughly your modern barons-plus-retainers class. Of course they don't want their taxes raised; or rather, most of them don't. Successful journalists are in that retainer group, by the way — Krugman, Taibbi, Ezra Klein, David Gregory, and so on. So is the guy who works 60-hour weeks traveling to China for Apple, making sure the wafer fabs are delivering quality chips. It's not all glory, what the retainers do, but it is well paid.
I don't use the phrase "retainer class" lightly. Without retainers, rulers are powerless. Saying "make it so" does nothing until Data pushes buttons on the console.
