Are you ready for the big fiscal cliff summit?

posted at 12:31 pm on December 28, 2012 by Allahpundit

3 p.m. ET in the White House. No reporters, no cameras, just five people sitting around a table wasting each other’s time while an excruciatingly bored pundit class waits for smoke signals afterward.

This is the part of the Scooby Doo episode where Shaggy and Scoob get chased by the “monster.” I wonder how it’ll end.

Lawmakers seemed as pessimistic as ever about averting the fiscal cliff Thursday evening despite the White House scheduling a meeting with the top four congressional leaders for Friday afternoon.

The White House announced that President Barack Obama would meet with Speaker John A. Boehner, R-Ohio; House Minority Leader Nancy Pelosi, D-Calif.; Senate Majority Leader Harry Reid, D-Nev.; and Senate Minority Leader Mitch McConnell, R-Ky…

Republican Sen. Bob Corker, R-Tenn., said the GOP had expected the White House to deliver a new proposal Thursday, which never arrived, and that the meeting with the White House was originally supposed to be in the morning and was later pushed to the afternoon. Corker said that suggests to him the meeting might be more for “optics” than for cutting a deal, and he said it’s becoming more likely that the next Congress will have to deal with the cliff. The failure to address a problem two years in the making is a total “dereliction of duty,” Corker said.

Two obvious possibilities. One is that they’ll try to hash out a short-term deal that will extend the Bush tax cuts across the board for another few months while they continue broader negotiations, possibly including tax reform. Why jump off a fiscal cliff today when you can jump off another in the spring? A short-term fix might appeal to both sides since Boehner won’t have to worry about the upcoming Speaker election and O will have more Dems in the House and Senate to add to his leverage. Two is that Obama might unspool that last-minute “scaled-back” plan that people were whispering about yesterday but which never happened. According to Politico, Republicans are saying privately that they want Obama to up his offer on the new threshold for tax hikes from $250,000 to $500,000. (One Republican senator told NRO that a bill with a $500K cut-off would pass both chambers.) I don’t know why he’d do that now when he can dive off the cliff next week and then give a big speech proposing “the Obama middle-class tax cut” for those who earn less than $250K. House Democrats would support it unanimously (or nearly unanimously) and there’d likely be 30 panicked Republicans willing to join them.

Just one hitch, though: If you believe Boehner, he won’t bring any bill to the floor unless a majority of the Republican caucus supports it.

On the packed GOP members-only call, Rep. Duncan Hunter, R-Calif., asked Boehner, R-Ohio, whether he would allow Democrats to carry a bill if the Senate passed a bill to which most House Republicans would object.

“I’m not interested in that,” Boehner remarked, according to a source on the call.

The speaker’s intention to stay steadfast means a rocky final stretch before Congress plummets off the fiscal cliff. Senate Majority Leader Harry Reid of Nevada tried to put pressure right back on Boehner by asking him to take up the bill the Senate passed earlier this year that extends the 2001 and 2003 tax rates on the first $250,000 of American’s annual income.

Could be he’s lying and just saying that now in order to pressure Obama into upping his offer, but having committed to it publicly, it’d be hard for him to walk away later. Question, then: How does Boehner get Obama to come off his $250,000 offer when O will have more leverage by going over the cliff, not less? One possible answer is to sweeten the pot by agreeing to raise the debt ceiling for another year. But could Boehner get a majority of Republicans to go along with that? Supposedly he had around 180-190 votes for Plan B; how many more would he lose for a compromise bill with Obama that lowers Plan B’s threshold for new taxes from $1 million to $500K and gives O what he wants on the debt ceiling?

Exit question via Marc Thiessen: Why not let it burn instead?

Update: HuffPo’s hearing rumbles that Obama will indeed make a “scaled-back” proposal at the meeting:

House Republicans expect Obama may offer to extend the Bush-era tax rates for incomes under $400,000, as he had done previously before negotiations blew up. The president had originally argued that any scaled-back deal should set that threshold at $250,000. Republicans still may insist that it be set at $500,000.

In addition, Republicans would be granted an extension of the current estate tax, which is a 35 percent rate over a $5 million threshold. The president wants a 45 percent rate on a $3.5 million threshold but would likely be willing to bend, in part because congressional Democrats are skittish about his proposal.

The deal would include an extension of unemployment benefits and various tax breaks for businesses and lower-income workers. In a concession to Republicans, it would not include the infrastructure funding that the president has requested to help stimulate economic growth. It would also allow the current payroll tax cut to expire, meaning that individuals would see larger withholdings in their paychecks.

The deal would delay sequestration, which if left in place would result in roughly $1 trillion in spending cuts over the next decade. It would leave the debt ceiling issue unresolved.

O’s going to come off of his $250K offer and hand the debt-ceiling issue back to the GOP so that we can go through another standoff over spending cuts in the spring? I know how I’d vote on that if I were a Republican legislator. And I know how I’d vote on it if I were a Democratic one.

Update: Hmmmm:


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Comment pages: 1 2

SWalker on December 28, 2012 at 2:02 PM

I’m torn: Obama qualifies as an arrogant bastard, and yet deep in my heart I do believe that his beer summit involved nothing but fizzy yellow beer. Making him more of a duplicitous bard.

Fenris on December 28, 2012 at 2:13 PM

I’ll go with, “What is arrogant beyond belief for $1000.00 Alex”…

SWalker on December 28, 2012 at 2:07 PM

Should have made it a true Daily Double!

Seriously. I just don’t understand why an EO lifting the freeze had to be signed just before the rat-eared wonder goes into a meeting that involves trying to resolve the fiscal ramifications of doing nothing by January 2nd. The pay freeze doesn’t even go into effect until the first pay period after March 27 2013.

Why today? This bastard doesn’t do anything by chance. What is the point of this?

Happy Nomad on December 28, 2012 at 2:15 PM

God forbid the American People actually pay for their government spending. If we don’t keep borrowing at ever-increasing rates, it’s a catastrophe that must be avoided at all costs!

Isn’t raising taxes to cover a little more of our profligate spending “fiscal sanity”?

EddieC on December 28, 2012 at 2:15 PM

EddieC on December 28, 2012 at 2:15 PM

No, because raising taxes will not actually increase real revenue. Fiscal sanity involves reducing government expenditures, paying off the debt, and lowering taxes.

What we’ll get is more borrowing and inflation, thereby reducing the buying power of individual savings and retirement plans. Yes, even union and government retirement plans.

Fenris on December 28, 2012 at 2:18 PM

Why today? This bastard doesn’t do anything by chance. What is the point of this?

Happy Nomad on December 28, 2012 at 2:15 PM

Why does the Dogeater-in-Chief always wipe his eyebrow with his middle finger when talking to people who disagree with him? Same reason.

SWalker on December 28, 2012 at 2:19 PM

Isn’t raising taxes to cover a little more of our profligate spending “fiscal sanity”?

EddieC on December 28, 2012 at 2:15 PM

Math isn’t your strong suit, is it.

SWalker on December 28, 2012 at 2:20 PM

Illinidiva on December 28, 2012 at 2:10 PM

For my money, Let It Burn includes refusing to raise the debt ceiling. At least not until the Dems come up with a budget proposal that can be reconciled with the House GOP proposal on living within one’s means. In other words, the Senate Dems will have to come to the table with cuts to the programs that are feeding the dependency of all the moochers, takers, and parasites that are contributing nothing to society. I just wonder how well the vermin class is going to like it when they find out that Social Security will be means tested, or Medicare is going to be gutted to pay for Obamacare, or that unemployment benefits end back at the pre-Obama rate instead of the current 99 weeks.

The same greedy selfish people that elected these bastards will turn on them in a heartbeat when it is their pockets that are being picked. Seriously, we shouldn’t even be considering raising the debt ceiling without cuts on the table.

Happy Nomad on December 28, 2012 at 2:23 PM

Happy Nomad on December 28, 2012 at 2:23 PM

That’s crazy talk! Why, if we did that, we might have to actually balance the budget. No wait, I’m sure there’s an Executive Order here somewhere that covers the situation, ah, got it. The President is hereby authorized …to do whatever the heck he wants.

Fenris on December 28, 2012 at 2:28 PM

They can’t say they weren’t warned before the election about taxes, more regulations and coming after guns. Some people just have to stick their finger on a hot stove to believe the truth about getting burned. DiFi isn’t the only one in DC who doesn’t read or understand the Constitution and that shall not be infringed upon part. She’s asking for the moon and if she gets half of what she wants, it’ll be considered a good first step. Oh, and the 200/250K crowd was warned, too.

Kissmygrits on December 28, 2012 at 2:32 PM

Isn’t raising taxes to cover a little more of our profligate spending “fiscal sanity”?

EddieC on December 28, 2012 at 2:15 PM

You can’t raise taxes high enough to cover “our” spending. If we get any new revenue, it won’t go to deficit reduction anyway, it will go to new spending.

zmdavid on December 28, 2012 at 2:33 PM

Happy Nomad on December 28, 2012 at 2:23 PM

I’m not really a “let it burn” person, but I don’t see a way to stop it from burning.

If we don’t raise the debt limit, Bernanke will increase QE to cover whatever Obama wants to spend. Congressional approval not required.

zmdavid on December 28, 2012 at 2:37 PM

“A short-term fix might appeal to both sides since Boehner won’t have to worry about the upcoming Speaker election…”

Attention GOP: Boehner has already shown he is not a leader, nothing will change that now.

You had damn well *better* replace him in January if you want a shred of hope of support from your constituency in the future.

Midas on December 28, 2012 at 2:43 PM

Boehner is in a no win situation.

Illinidiva on December 28, 2012 at 1:08 PM

Hey SWalker, apparently a certain someone does believe in the no win situation.

Dongemaharu on December 28, 2012 at 2:46 PM

Isn’t raising taxes to cover a little more of our profligate spending “fiscal sanity”?

EddieC on December 28, 2012 at 2:15 PM

Ok, say you have someone that’s just had their jugular slashed in an accident; someone suggests “hey, they’re bleeding pretty badly from that neck wound – maybe we should cut an artery in their leg so it bleeds less from their neck!”

Would this constitute ‘sanity’, or remotely resemble an approach that’s likely to actually solve the problem at hand?

Midas on December 28, 2012 at 2:46 PM

Isn’t raising taxes to cover a little more of our profligate spending “fiscal sanity”?

EddieC on December 28, 2012 at 2:15 PM

You can’t raise taxes high enough to cover “our” spending.

Even conservative economists such as Ben Stein will tell you that everyone’s taxes, not just those on the rich, must go up eventually.

If we get any new revenue, it won’t go to deficit reduction anyway, it will go to new spending.

zmdavid on December 28, 2012 at 2:33 PM

This is among the most popular rationalizations for maintaining a historically low and absolutely unsustainable tax rates.
And it’s completely contradicted by facts.

http://www.weeklystandard.com/articles/gorging-beast_663547.html?nopager=1

bayam on December 28, 2012 at 2:49 PM

Hey SWalker, apparently a certain someone does believe in the no win situation.

Dongemaharu on December 28, 2012 at 2:46 PM

The only way to win this one… Win the election. Boehner has absolutely no leverage. The best he could do is PR manuevers like Plan B. This is a battle that the Rs cannot win, but they can still win the war. The best they can do is tactically retreat and regroup to fight another day. The chaos and disunity helps no one. Let the tax increases go through and make the Ds own the increases. Delay the debt ceiling debate until April to give the Rs time to lick their wounds and sulk. Ideally, the debt ceiling is in play around the same time as the 2014 budget gets released. Republican fiscal sanity vs. Obama’s profligate spending – Those are much better terms for a Republican.

Illinidiva on December 28, 2012 at 2:54 PM

bayam on December 28, 2012 at 2:49 PM

Is this the same Ben Stein who can’t think of anything Nixon did that was so terrible (cough*wage and price controls*cough)? That Ben Stein? That’s your authority? And how can the US have the highest corporate taxes in the developed world, and have historically low tax rates. I’m confused.

Fenris on December 28, 2012 at 2:57 PM

bayam on December 28, 2012 at 2:49 PM
By what measure are taxes historically low? Before 1916 there was no income tax at all.

If it’s as a percentage of GDP, remember that the government is a large part of GDP, remove that and recalculate.

zmdavid on December 28, 2012 at 3:00 PM

This will never work; they’ve got no brewskies!

IndieDogg on December 28, 2012 at 3:01 PM

Even conservative economists such as Ben Stein will tell you that everyone’s taxes, not just those on the rich, must go up eventually.

Well.. if we keep maxing out the credit card on important things like birth control pills for 31-year-old professional students, tax credits and grants for failed energy companies, and food stamps so people can shop at Whole Foods, then it must. Methinks that this is what Obama believes. I also think that it is incredibly politically unpopular which is why he is all about middle class tax cuts. This is why I’m for the Rs surrendering on the tax cuts for the evvvvilll rich. There won’t be enough money to keep up the profligate spending because it is a pound of flesh and doesn’t solve the issue. Let him explain to Joe Sixpack in April about how his taxes are going to go up as well. Once Joe Sixpack hears how it will affect his pocketbook, then spending discipline sounds a lot better. Americans are in general both very selfish and very stupid. I totally support the Republicans actually turning Obama’s very cynical political strategy back at him.

Illinidiva on December 28, 2012 at 3:04 PM

Is this the same Ben Stein who can’t think of anything Nixon did that was so terrible (cough*wage and price controls*cough)? That Ben Stein? That’s your authority? And how can the US have the highest corporate taxes in the developed world, and have historically low tax rates. I’m confused.

Fenris on December 28, 2012 at 2:57 PM

Umm.. How about Watergate?

Illinidiva on December 28, 2012 at 3:04 PM

Let It Burn.

It’s time for the unending 0bama brinksmanship to hurt the American public.

It’s time for them to really see the awful… thing… that they re-elected.

Ronald Reagan would have gotten everyone together in a room and hashed it out.

So wuold I.

I can tell you now that I would be better president.

Full Stop.

I would force the sides together – provide leadership – and get it done.

By 0bama’s standards, ‘

YES, I am qualified to be POTUS, and I would do a better job.

I guarantee.

For all Americans.

cane_loader on December 28, 2012 at 3:07 PM

Umm.. How about Watergate?

Illinidiva on December 28, 2012 at 3:04 PM

I was referring to this article which I probably should have linked to before, but didn’t realize it was still available on the web.

Ben Stein isn’t really a conservative, and neither was Nixon.

Fenris on December 28, 2012 at 3:09 PM

Let him explain to Joe Sixpack in April about how his taxes are going to go up as well.
Illinidiva on December 28, 2012 at 3:04 PM

He won’t explain it. He’ll blame Republicans for it. Then he’ll propose a government program to help. Then he’ll say the rich aren’t paying their fair share.

zmdavid on December 28, 2012 at 3:10 PM

I have come to realize, during recent personal crises, that I am a “decider.”

In my older age, I think I have develeped a good “CEO mentality.”

Give me a problem: I’ll solve it. I’ll let the DJ revolve the hook while I resolve it.

Even in my own family, I realize that I have good CEO traits, and fair ones, too.

I want good data – let me check it out – and I will give direction.

Let’s solve the damn problem. First thing is to make the Dems own it until they beg me to solve it.

cane_loader on December 28, 2012 at 3:10 PM

bayam on December 28, 2012 at 2:49 PM

That article’s pretty… feeble. Doesn’t demonstrate a causal relationship at all between tax cuts/increases and spending (which apparently goes up either way.

Sorry bro; absent a big ole credit card and an active printing press, even keeping taxes the same would require spending reductions, tax cuts even more so.

Yes, if you have tax cuts *and* the people in charge are spendaholics, you wont get a reduction in spending – is that the feeble point? Remove the tax cut from that sentence and it’s still true – if the people in charge are spendaholics, you wont get a reduction in spending – no matter what you do tax-wise.

Tax cuts.

No increase in debt ceiling.

No more printing presses.

Guess what you’ll get? Spending cuts, by default. If you’re used to spending $50/week, then find that you have $20 in your pocket and want to spend $50, but can’t use a credit card, cant get further credit, and are limited to what’s in your pocket, how much can you spend? And is that a reduction or an increase from what you’re accustomed to spending?

Midas on December 28, 2012 at 3:12 PM

Well it appears bho isn’t all that concerned with spending? He did an eo to raise salaries of biden/congress/fed workers! That worthless gosh horrible evil man keeps spending spending and spending! bho has no intentions of dealing with the cliff, it is his way or the highway!

http://www.weeklystandard.com/blogs/obama-orders-raise-biden-members-congress-federal-workers_692223.html
L

letget on December 28, 2012 at 3:12 PM

On a more serious note, tax revenues (not rates) are only unstainable if it won’t pay for what you want to spend. There seems to be a disconnect here, between the structure of a government and the source of its governing authority.

We [supposedly we - actually it's another beast, the Member of Congress - which has become an animal all its own] decide what government will do and will not do. Those activities have a cost associated with them. There is nothing – repeat for emphasis, nothing – that government does on its own without the approval of its citizens, through their representatives.

And, just because a group of people want to spend everyone’s money to do something does not make that something a core requirement of government. It’s called making choices.

There is no such thing as an amount of revenue that a government must have to function. It’s as simple as personal living. Do you have to have a car? Do you have to have a Porsche Panamera Turbo? If your revenue won’t cover the cost of your Panamera Turbo, you might call your revenue level unsustainable. Or, you could get rid of the Turbo and get a Fiat. It’s a choice.

To suggest that we simply have to spend a certain amount of our citizens’ money (as an absolute number or as a % of GDP) because that’s what it’s going to cost to fund somebody’s wish list is a fool’s game. It’s certainly not economics.

IndieDogg on December 28, 2012 at 3:14 PM

so now the lsm says obama has all the leverage because he is setting out the same $250k tax increase…
he’s the last one that proposed anything so he’s the clear winner…

really????

cmsinaz on December 28, 2012 at 3:14 PM

Obama’s goal is to crash the dollar and then enact a global sharia compliant finance system.

tom daschle concerned on December 28, 2012 at 3:14 PM

My first Executive Order would be that all businesses will close for major holidays, excepting hospitals and gas stations, so that employees can spend time with their families.

If you didn’t prepare ahead of time, tough tittie.

The current situation where the folks we see day in, day out, are at the registers, sad, pissed, to accomodate ourt lack of planning, will end.

Get your damn turkey and dressing ahead of time.

Let everyone take a day off.

Elect me.

cane_loader on December 28, 2012 at 3:23 PM

IndieDogg on December 28, 2012 at 3:14 PM

Well said.

Midas on December 28, 2012 at 3:28 PM

Will there be beer?

Simonsez on December 28, 2012 at 3:30 PM

He won’t explain it. He’ll blame Republicans for it. Then he’ll propose a government program to help. Then he’ll say the rich aren’t paying their fair share.

zmdavid on December 28, 2012 at 3:10 PM

Part one of my part step solution is to cave on taxes now. The Rs don’t have enough leverage to win on that. And extend the debt ceiling into the new Congress by a few months to give the party time to lick its wounds. Then use the debt ceiling as leverage in April to demand spending cuts and force Obama’s hand on this one. Either he can explain to all his supporters that he’s sorry, but their taxes are going up as well. Most Americans, especially the ones who supported Obama, are stupid and selfish… Taxing the rich is always good because Joe Sixpack is upset that the rich are successful and he isn’t. However, gov’t spending is only good as long as it only uses the evvvvilll rich’s money. Once Joe Sixpack has to pay for spending then it’s totally okay to cut off funding, especially if it isn’t for programs that affect him.

Illinidiva on December 28, 2012 at 3:31 PM

The Fed has required plebeians to complete a financial literacy course before their debts can be discharged through bankruptcy since 2006. It’s the law.

The course includes developing skills to spend less than you take in and to save for a rainy day.

But keep on talking about making those d*&m rich folks pay their fair share…that will fix everything.

LetsBfrank on December 28, 2012 at 3:38 PM

Delay the debt ceiling debate until April to give the Rs time to lick their wounds and sulk. Ideally, the debt ceiling is in play around the same time as the 2014 budget gets released. Republican fiscal sanity vs. Obama’s profligate spending – Those are much better terms for a Republican.

Illinidiva on December 28, 2012 at 2:54 PM

With all due respect, what 2014 Budget? We have not had a constitutional budget for 4 years, the Senate has said we will not have one for at least several more, and the Republicans have collaborated in all of this.

Further, for longer than that, the Republicans have excused yielding to the Enemy by claiming that they will fight “next time”. How many times have they actually stood their ground and fought when “next time” got there? What indication is there to hint that they will do so this time? Especially after Boehner purged fiscal conservatives and TEA Party supporters from the finance and budget committees to grease the way for a capitulation?

Subotai Bahadur on December 28, 2012 at 3:39 PM

The “Fiscal Cliff” is the wet dream Obama has been having since his radical days at Occidental. He gets to decapitate the military; punish successful people and demonize Republicans. It’s the win-win trifecta of a well concealed far-Left ideologue. Politically and ideologically, Obama must be so satisfied that he is achieving all of his goals.

OxyCon on December 28, 2012 at 3:44 PM

Obama is completely useless. He calls a meeting and then doesn’t even have a new proposal. Well done, Mr. President.

milcus on December 28, 2012 at 3:51 PM

The Hill just sent out a tweet saying O will NOT be offering a plan today in the big meeting…

I, for one, am shocked!

crazywater on December 28, 2012 at 3:53 PM

bayam on December 28, 2012 at 2:49 PM
By what measure are taxes historically low? Before 1916 there was no income tax at all.

If it’s as a percentage of GDP, remember that the government is a large part of GDP, remove that and recalculate.

zmdavid on December 28, 2012 at 3:00 PM

By every modern measure, taxes are historically low. This belief in ‘victimization’ at the hands of government is comical when you consider the fact that this nation supports has recently engaged in two overseas wars while simultaneously cutting both income taxes and capital gains taxes. Our forefathers paid higher taxes across the board in order to build out the massive national infrastructure too many people take foregranted. Yet whining is never in short supply.

The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.

In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010

http://www.businessinsider.com/history-of-tax-rates

http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

bayam on December 28, 2012 at 3:57 PM

And thus the Fiscal Cliff became just another excuse for the Obamas to fly separately.

Steve Eggleston on December 28, 2012 at 3:59 PM

Dive, dive, dive, heads first, heh.

Schadenfreude on December 28, 2012 at 3:59 PM

And thus the Fiscal Cliff became just another excuse for the Obamas to fly separately.

Steve Eggleston on December 28, 2012 at 3:59 PM

…and scroom the land for more millions…suffer, fools, suffer.

Starve the Looters. The Obamas enjoy the stupid moochers.

Schadenfreude on December 28, 2012 at 4:00 PM

A president who’d care would have neve gone to HI.

The entire ‘action’ today was to have hype and photo ops, ‘talk’ about the god who isn’t, Obama.

The world is full of fools.

Schadenfreude on December 28, 2012 at 4:01 PM

bayam on December 28, 2012 at 3:57 PM

You’re confusing revenue with rates. The whole point is that when you raise rates, and when you have a non-productive bloated government sucking resources, revenue actually goes down. Lefties think that you can raise rates indefinitely and the money tree will keep on giving. Well, the smart ones don’t think that, but it’s a useful fiction.

Fenris on December 28, 2012 at 4:04 PM

bayam on December 28, 2012 at 3:57 PM

You’re confusing revenue with rates. The whole point is that when you raise rates, and when you have a non-productive bloated government sucking resources, revenue actually goes down. Lefties think that you can raise rates indefinitely and the money tree will keep on giving. Well, the smart ones don’t think that, but it’s a useful fiction.

Fenris on December 28, 2012 at 4:04 PM

And righties believe in ever-falling tax rates, with tax revenue increasing in proportion to the size of each rate cut.

Tax rates and revenue were significantly higher under Clinton. You can invent whatever answer you’d like to project but it’s not meaningful with evidence to back it up.

bayam on December 28, 2012 at 4:10 PM

The reprobate stalinist lies and lies and lies and lies.

One of the most dangerous myths that has infected the current debate over the direction of tax policy is the oft repeated claim that the tax increases under President Bill Clinton led to the boom of the 1990s. In their Wall Street Journal Op-Ed last Friday, for example, Clinton campaign manager James Carville and Democratic pollster and Clinton advisor Stanley Greenberg write the increase in the top tax rate to 39.6% “produced the one period of shared prosperity in this past era (since 1980).”

However, with his masterful 1995 flip-flop on taxes, President Clinton took the first step toward a successful campaign for re-election and a shift in policy that produced the economic boom that occurred during his second term.
Welfare reform, which he signed in the summer of 1996, led to a massive reduction in the effective tax rates on the poor by ameliorating the rapid phase out of benefits associated with going to work.
The phased reduction in tariff and non-tariff barriers between the U.S., Mexico and Canada under the North American Free Trade Agreement continued, leading to increased trade.
In 1997, Clinton signed a reduction in the (audible liberal gasp) capital gains tax rate to 20% from 28%.
The 1997 tax cuts also included a phased in increase in the death tax exemption to $1 million from $600,000, and established Roth IRAs and increased the limits for deductible IRAs.
Annual growth in federal spending was kept to below 3%, or $57 billion.
The Clinton Administration also maintained its policy of a strong and stable dollar. Over his entire second term, consumer price inflation averaged only 2.4% a year.

The boom was on. Between the end of 1996 and the end of 2000:
Economic growth accelerated a full percentage point to 4.2% a year.
Employment growth nudged higher, to 2.1 million jobs per year as the unemployment rate fell to 4.0% from 5.4%.
As the tax rate on capital gains came down, real wages made their biggest advance since the implementation of the Reagan tax rate reductions in the mid 1980s. Real average hourly earnings were (in 1982 dollars) $7.43 in 1996, $7.55 in 1997, $7.75 in 1998, $7.86 in 1999, and $7.89 in 2000.
Millions of Americans shared in the prosperity as the value of their 401(k)s climbed along with the stock market, which saw the price of the S&P 500 index rise 78%.
Revenue growth accelerated an astounding 59%, increasing on average $143 billion a year. Combined with continued restraint on government spending, that produced a $198 billion budget surplus in 2000.

Now go teach your grandmother to suck eggs.

tom daschle concerned on December 28, 2012 at 4:18 PM

The CBO along with all other official deficit, debt and budget estimates are based on current law. They have to be, under the law. Law that Congress passes.

This means that by having “current law” expire the AMT inflation index every year the CBO’s budget deficit estimates, along with everyone else’s including Lying Ryan’s, are intentionally understated, as under “current law” those taxes are all computed as if the indexing and thus breaks expire at the end of the current year, and thus all forward years grossly and intentionally overstate revenue and grossly and intentionally understate expenditures.

This, incidentally, is a big part of why the CBO in 2000 projected that by 2010 there would be no national debt. At all. On the last day of 2000 total national debt (including Social Security and Medicare) stood at $5.66 trillion.

Today it is $16.338 trillion, or approximately three times as much.

That projection forward was an intentional lie, that is a fraud, promoted upon the public and bond buyers by the United States Congress and Executive and effectively forced upon the CBO through this fraudulent and outrageous practice.

We need some trials and make use of some of the walls.

tom daschle concerned on December 28, 2012 at 4:26 PM

tom daschle concerned on December 28, 2012 at 4:18 PM

Thank You, so I didn’t have to look up the numbers. You could add, he was forced to sign welfare reform by a Republican Congress who kept passing it after he vetoed it a couple of times.

Fenris on December 28, 2012 at 4:28 PM

Thank You, so I didn’t have to look up the numbers. You could add, he was forced to sign welfare reform by a Republican Congress who kept passing it after he vetoed it a couple of times.

Fenris on December 28, 2012 at 4:28 PM

Mouth breathing propagandist liars like bayam muddy the waters and tell half truths. What they forget is that they are too stupid to understand cause and effect. The stupidity he advocates never has and never will work. He is either complicit or just another dutiful useful idiot. A pox on his house.

The whole article is at Forbes

tom daschle concerned on December 28, 2012 at 4:32 PM

Tax rates and revenue were significantly higher under Clinton. You can invent whatever answer you’d like to project but it’s not meaningful with evidence to back it up.

bayam on December 28, 2012 at 4:10 PM

Stop with the Clinton boom crap. The internet boom was not caused by Clinton but he benefited from it. Just like Bush’s tax cuts were a minor help to avoid recession but the housing bubble was more of a reason for the economic boom, and for it’s collapse.

One of the big reasons revenue compared to GDP was at 14.9% is because government makes up a big part of GDP and for the last 4 years we’ve spent a trillion dollars ANNUALLY of what was supposed to be stimulus money on direct GDP counted spending, on temporary projects like roads. So GDP has been artificially inflated. One of the reasons Reid won’t let a budget come to the floor is that means the 2009 stimulus stops getting spent over and over again.

You can inch up taxes during a boom. You do not increase taxes on anybody in the middle of heading into the double dip, after the worst retail holiday season in 4 years, and when Obamacare taxes are already about to hit almost everybody!

If we went back to the 2007 budget numbers, even adjusted for inflation, the annual deficit would be back down to 200-300 billion. Letting the tax cuts for the top 1% expire would actually make a dent in that.

The problem is not with raising taxes, per se, but how much they are increasing (including the 2003 cuts expiring AND the additional Obamacare taxes), the timing of the increase, and the fact that Obama is presenting ZERO spending cuts (only promising to come back to those). If we give Obama what he’s asking for, we will reduce the annual deficit by 0.8% and that’s best case with static tax analysis. We will still be spending 1.1 Trillion dollars a year more than we bring in. We will still have an entitlement crisis. We will still be spending the stimulus every year.

If Obama really, truly cared about this country’s economic future and survival as a nation, he’d be kicking Harry Reid’s rear to pass a budget, get it reconciled and get things moving. He’d be using his popularity, the msm and his “mandate” to get a real budget out of the Senate for the two houses to consider. Think about that liberal cretins: Your president is blaming the GOP for this while his own party refuses to even pass a budget out of the house they control. Heck, they didn’t even vote on a budget when the Democraps controlled the House too! Your party controlled ALL THREE, House, Senate, President, and didn’t pass a budget. Your party just did a continuing resolution, including spending the stimulus all over again, and went on playing fiddles while Rome burns.

Tax rates may have been higher under Clinton, but we also had GOP control of Congress, a stable regulatory environment, a new technology booming and creating a bubble, and a relative Moderate in the White House. NOW we have nobody in control of either house of Congress, a rapidly changing and fluctuating regulatory environment, nothing driving a boom except energy (which Obama and his DoE want to regulate and kill), and an extremist that will govern with EO if he doesn’t get what he wants in the WH.

But yeah, it’s the GOP that’s at fault Bayam. That last sentence was sarcasm.

PastorJon on December 28, 2012 at 4:42 PM

Voters chose expensive government. Tax increases are unavoidable. Recession too, but that’s what the majority said they wanted and, while they may be functional idiots unable to connect two obvious dots, they should get what they chose.

MTF on December 28, 2012 at 4:52 PM

With all due respect, what 2014 Budget? We have not had a constitutional budget for 4 years, the Senate has said we will not have one for at least several more, and the Republicans have collaborated in all of this.

Umm.. The House Republicans do produce and pass a budget every year. The guy repsonsible for said budget is pretty famous. I’m assuming that the 2014 Budget will get produced in April when it always does along with a snazzy web commercial featuring Paul Ryan explaining that we’re in debt. That’s why he was given the waiver.

Further, for longer than that, the Republicans have excused yielding to the Enemy by claiming that they will fight “next time”. How many times have they actually stood their ground and fought when “next time” got there? What indication is there to hint that they will do so this time?

The Rs fight stupid. They need to learn when to fight and how to fight smart. Standing around and screaming to your face is red just makes them look like they’re two and Obama look like an adult. The Rs need to learn how to present their message to a wider audience, appropriate the other side’s tactics, and retreat rather than going on suicide missions. This means sometimes conceding battles and supporting things like Plan B you don’t agree with to win the wider war. Make Obama try to sell higher taxes to the middle class… It won’t work. Once the welfare state starts to interfere with Joe Sixpack’s lifestyle then the welfare state becomes unnecessary.

Especially after Boehner purged fiscal conservatives and TEA Party supporters from the finance and budget committees to grease the way for a capitulation?

Why is everyone blaming Boehner? Kicking Amash and the other guy off the Budget Committee benefited Paul Ryan the most. Those two voted against Ryan’s 2013 budget and it barely squeaked out of the Budget Committee. All while Ryan was angling to become the VP nominee. I don’t think that Ryan, who clearly has 2016 ambitions, is going to leave anything like that to chance again.

And I don’t think that it is such an awful situation. It’s all about smart politics. It’s like any other job. Sometimes you need to compromise and play office politics. And always refrain from annoying powerful senior executives.

Illinidiva on December 28, 2012 at 4:55 PM

And righties believe in ever-falling tax rates, with tax revenue increasing in proportion to the size of each rate cut.

Tax rates and revenue were significantly higher under Clinton. You can invent whatever answer you’d like to project but it’s not meaningful with evidence to back it up.

bayam on December 28, 2012 at 4:10 PM

So if we go back to the Clinton era tax rates.. we’ll also get the Dot.Com boom as well… Correct?? Because the rate of taxation had nothing to do with 1990s prosperity. The fact that there was a major technological advancement has a lot to do with that.

Illinidiva on December 28, 2012 at 4:59 PM

The Republicans should take the extension of the Bush tax cuts for incomes under $400K and anything else Obama offers and pass it through the House, then trumpet the fact that THEY prevented taxes from rising on the middle class.

BUT, there should be no agreement on the debt ceiling without serious non-military spending cuts and entitlement reform, with ObamaCare on the table. If Obama and the Democrats say they need more time to work out a deal, just raise the debt ceiling slightly so that the new crunch comes on April 1, right before tax returns are due, while in the meantime slashing funding for the EPA, Dept of Energy, and Dept of Education. The funding only comes back when (1) serious entitlement reform is enacted; (2) drilling and fracking are allowed on Federal land; (3) EPA rules on CO2 emissions are rescinded.

The one leverage the House Republicans still have is that all revenue-raising measures must originate in the House. If the Senate Democrats and Obama aren’t willing to negotiate, then let the Government shut down just when taxes are due.

Let’s see the cojones that are left in the House of Representatives.

Steve Z on December 28, 2012 at 5:21 PM

And righties believe in ever-falling tax rates, with tax revenue increasing in proportion to the size of each rate cut.

Tax rates and revenue were significantly higher under Clinton. You can invent whatever answer you’d like to project but it’s not meaningful with evidence to back it up.

bayam on December 28, 2012 at 4:10 PM
So if we go back to the Clinton era tax rates.. we’ll also get the Dot.Com boom as well… Correct?? Because the rate of taxation had nothing to do with 1990s prosperity. The fact that there was a major technological advancement has a lot to do with that.

Illinidiva on December 28, 2012 at 4:59 PM

The Dot Com boom was largely an illusion, with everybody and their brother, sister, and mother-in-law thinking they could get rich selling stuff over the Internet without regard for limited demand by conventional means. Lots of companies started selling stuff over the Internet in 1998 and 1999, and investors jumped in and made huge returns on skyrocketing stock prices whose P/E ratios were in the hundreds, or negative because the companies were losing money. These investors paid huge capital-gains taxes to the Government, which was the only reason the Government ran a surplus in those years. When reality set in, and investors realized they were vulnerable and dumped most of the Dot Com stocks, capital-gains taxes turned to capital-loss tax refunds, and the surpluses vanished, in 2000, while Clinton was still President.

Bill Clinton was a shining example of “it’s better to be lucky than good”. He was a lucky President, and George W. Bush got stuck with picking up the pieces, especially Clinton’s “peace dividend” that decimated the military and left us vulnerable to the 9/11 attacks.

Steve Z on December 28, 2012 at 5:31 PM

……….more bullsh!t…!!!

KOOLAID2 on December 28, 2012 at 9:26 PM

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