Lame Duck Congress Isn't Finished Yet

Two significant moves have just been made (on Thursday) during the Lame Duck session of Congress.

First, the House passed the Child Nutrition Bill, which expands the school lunch program and will automatically include more children on Medicaid. The program currently feeds more than 31 million youngsters each day. The bill also raises the standard on what would be served, namely, requiring more fruits and vegetables, whole grains and low-fat dairy products, and less processed foods, junk foods and sweets. Half the cost of the new legislation would come from a cut in Food Stamp benefits, a compromise that some Democrats had fought against until they realized that a delay in 2010 might mean that no bill would be passed at all. The Senate already passed a version of the bill. Sen. Blanche Lincoln of Arkansas, who did not win her campaign for re-election, was the main writer of that bill. With the House passage, the compromise will soon be ready for the president to sign into law.

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Second, the House voted to extend the Bush tax cuts for the middle class, that is, all individuals earning up to $200,000 and couples earning up to $250,000. Twenty Democrats opposed the bill; three Republicans supported it. The final count was 234 to 188.

According to congressional estimates, making tax cuts permanent for taxpayers under $250,000 would “add a little more than $3 trillion to the national debt over the next decade.” But making them permanent for earners over this income level “would require an additional $700 billion in federal borrowing.” Why, given the “talk” about cutting the national deficit, should the nation keep giving a cash break to those who need it least—the highest earners among us? Why not put that $700 billion in revenue toward paying down the deficit?

The House voted to do what President Obama has proposed for months—extend the middle-class tax cuts. It also clearly allowed the Bush-era tax cut for the wealthiest Americans to expire as written, at the end of 2010. In mid-term election polls, the American public overwhelmingly supported a proposed extension of the tax break for earners up to $250,000 and opposed tax breaks for the wealthy. Will Americans support it now that the House has passed it? It will be interesting to see if the public even registers the Congressional battle, with the Christmas rush and winter setting in. Few expect the Senate to follow suit. And the discussion on compromise is going on even as I write this.

Still, the House vote is principled and smart. Why? Because it puts elected representatives on record. Question is: Is the American public taking notice? What might help the public to watch?

I think the Senate should do something similar, let those Republicans who want to give away a tax break to the rich filibuster. In fact, the Senate ought to allow filibuster over other issues, as well. A real filibuster, not just the mere threat of one, might actually grab the attention of voters. That would be some sort of victory.

Attention must be paid.

 

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JOHN MESSINA
7 years ago
Your magazine is blatantly partisan.  That's why I canceled my subscription.
Mike Evans
7 years ago
Unfortunately unless you are unemployed or poor, nobody seems to care at all. The increases would be chump change to most of us and would provide an unprecedented opportunity to both help those who are suffering and accomplish some worthwhile goals in rebuilding our economy and infrastructure. Who is currently satisfied with the widespread decay in public facilities, pot holed roadways, inefficient rail systems, and the destruction of our former world class industry. But the party of selfishness is completely opposed to even discussing the possibilities. All they seem to want is the public flagellation of our president and continued favors for their friends.
Marie Rehbein
7 years ago
"The rich actually paid much more in taxes after the tax reductions and revenues went up."


Is this made up by you, JSC, or by Faux Noos? 
Stanley Kopacz
7 years ago
I remember the "tax cuts" of Reagan period.  Shortly thereafter, I couldn't deduct the sales tax on a new car buy.  And all of a sudden, my medical deductions disappeared, too.  Very cunning.

Of course, now, I pay less taxes on my bank interest, measured in peanuts.  I was better off when I was paying a higher tax rate on a decent interest.   I'd love to pay more in taxes myself under the earlier conditions.

Of course, the rich were paying more in taxes.  Because they were drawing in money like black holes draw in matter.  The big tragedy (for them) is that they had to pay some of that back in taxes.  A future totally Republican-run government should cure that.

Jim McCrea
7 years ago
JR:  you are, of course, entitled to your opinions and the arguments in support thereof.

However, what gets VERY annoying is when you and your kind keep referring to the DemocratIC part as the Democrat party.

Give it a rest!  When is the last time someone here referred to the Greedy Old Party?
7 years ago
''what gets VERY annoying is when you and your kind keep referring to the DemocratIC part as the Democrat party.''


Fine with me.  I never knew there was controversy till you pointed it out  So change my comment above to


''I am sure there are some children that meet this description.  In these cases something should be done.  But the cause of this situation can most likely be laid at the foot of the Democratic Party and their policies.'' 
7 years ago
'Is this made up by you, JSC, or by Faux Noos?'

It was made up by the US Government. 

'I don't recall the rich suffering.'

No the rich will not suffer.  That is the point.  They will prosper and so will the rest of the country as they create new businesses and jobs.  A friend of mine described how he and several others became millionaires in the 1970's and 1980's as they created several new businesses in Silicon Valley (San Mateo and Santa Clara counties of the San Francisco peninsula.)    

There is a chart revealing the genealogy of Silicon Valley and the companies created and the individuals responsible from 1955 to 1986.  After that it would be too hard to keep track of it all  There are thousands of these people who became millionaires in this geographic area.  And in the process they and others from other areas of the country created the highly modern technological society we have that employs tens of millions of people.

So yes, make it easy for these people to prosper and so will the rest of us.  I want them to prosper so my children and grand children can thrive.  Make it difficult through jealousy and class warfare and we cut off our noses to spite our face.   That will make some people happy for the moment but it will create misery for a lot of people as we see now in the high unemployment rates which are the results from the government interfering in the housing market.  The Democrats and the Democratic party are not about creating prosperity they are about equality and that can only come when all are leveled to a much lower level. 

'Instead we had a long stretch of prosperity and balanced the budget'

The long stretch of prosperity started in the early 1980's and went through till 2008 and could possibly return.  The balanced budget in 1999 was an artifact of the Dot Com boom and the tremendous increase in tax revenues from capital gains in the late 90's, the reduction of military spending and the constraints on federal non discretionary spending by the Republican congress.  It never could have been sustained as the recession of 2000 brought fallen revenues as the DOT Com bubble burst.  We were headed back to a balanced budget in the late Bush years due to another bubble, housing but that also burst.  Now the objective should be to encourage business to create and expand so that we can employ most of those out of work people.
Stanley Kopacz
7 years ago
Silicon Valley new startups were not rich people creating jobs.  It is new technology and entrepreneurial technologists creating jobs.  Bill Gates wasn't rich when he started.  Technology comes mostly out of government funded research and academic laboratories.  Some of this gets hijacked by privatization of technology generated by public funding.  The rich should pay more in taxes because they benefit unequally from the fruits of the government.  Besides, they have nothing better to do with all that disposable income they don't need.  They will invest it anyway if there's an economy that will return profit.

The problem is that the growth of economic behemoths, whether individual or corporate, is a threat to the republic.  This shift of power under Reagan-Bush-Clinton-Bush to the oligarchic elements of society is frighteningly similar to the shift of Rome from republic to empire and then feudal Europe.  The Romans were no sweethearts under either system, but diffusion of power has always been better for everybody, if you would rather live in a peaceable kingdom.
7 years ago
'Silicon Valley new startups were not rich people creating jobs.'

Yes they were.  Not all were rich at the beginning but the economics of it drove them to continue long after they became rich and the venture capitalist with the money were rich and helped fuel this expansion.  This genealogy chart showed where each of these millionaires moved on to creating new startup which became major organizations often with their own money that they made on a previous business.  As they moved on they created tens of million good jobs.

Yes, they took government and academic research and made it work.  So what! That is what we should want them to do with it.  Without the economic incentives it would be just sitting in the journals as some interesting finding.  The biggest generator of this was Stanford though MIT and many others research universities contributed.  DARPA is also another source of technology.  And you know what, these successful industries and alumni gave back each year to these universities in the hundreds of millions and billions and to the government in tens of billions in taxes.

It is entrepreneurship fueled by technology and the knowledge that they will reap rewards that has driven the system.  And we should do all we can to encourage this to continue and that is why the most important tax rate to keep low is the highest one.  The childish behavior of the Democrats and Democratic party is just a game to hoodwink people that they are looking out for them when in fact they are punishing them.  It is the poor and less educated who have been hit hardest by the high unemployment.  College graduates have a 96 employment rate. But cynicism was never in short supply with liberals and the Democrats.
7 years ago
''but diffusion of power has always been better for everybody, if you would rather live in a peaceable kingdom.''


I couldn't agree with this more.  And that is what the TEA party is all about.  Reducing the size of the federal government and hopefully encouraging many grass roots organizations including startup in businesses.  As I said before, all the job growth since 1980 (roughly 40 million plus jobs) has come from new businesses and not from established businesses.  So think small and we will all be better off.  Encourage the entrepreneurs to create these small businesses that make us all better off.
Marie Rehbein
7 years ago
Well, JR, we see that ultimately Obama is the peacemaker.  Nothing for us to debate now, is there?  My reaction is to act rich from now on.  I will not spend any greater percentage of my money on things other than necessisities than the rich do.  Sorry, kids we're building up the nest egg with our middle class tax breaks.
Marie Rehbein
7 years ago
"...the most important tax rate to keep low is the highest one"

You are attributing too much to the personal income tax rates.  Those people who became millionaires from investing small amounts of money and large amounts of time and knowledge did not go on to use their personal money to fund more business.  They created companies to do that.

If someone were talking about corporate taxes and corporations in general, maybe we wouldn't be hearing so many outrageous claims about what the filthy rich do with their excess money.  Most of them hand it over to wheeler dealers in investment houses who play with numbers and make it look like the money is growing.  However, the money is doing nothing for the economy.

In some ways, I feel sorry for those people with more money than ideas of what to do with it.  These bubbles that their money is supposedly growing in are always going to burst, because they are insubstantial just like the technology bubble that was silicon valley.  It would not have grown the way it did, only to burst, if people had been funding actual production instead of buying and selling shares to make themselves rich.

The best thing to do is to take some of that money from the idea-less ones and invest it in areas that need investment but that don't turn a fast buck - things like infrastructure, transportation, education.

I am glad to see that you admit that "The rich actually paid much more in taxes after the tax reductions and revenues went up." was made up.
  
Also, sorry for messing up your initials earlier.  I had meant to go back and insert your name, but forgot and posted it as it was. 
7 years ago
' am glad to see that you admit that 'The rich actually paid much more in taxes after the tax reductions and revenues went up.' was made up.'

Yes the government lied about those tax returns to make it seem that the rich were paying more money after they cut taxes when all along they were not as you have informed us.  I am glad you are here to let us know the truth.  You cannot trust the government statistics they put out.

Here are two videos for those interested about the upper tax rates and the effect on the economy.  Liberals beware, it contradicts all your cherished beliefs.

http://danieljmitchell.wordpress.com/2009/06/15/obamas-tax-policy-threatens-americas-economy/

http://mercatus.org/video/veronique-de-rugy-bloomberg-tv-we-can-t-tax-or-grow-our-way-out-deficit

'the technology bubble that was silicon valley'

I do not think it was any bubble. and I definitely would not refer to it in the 'past' tense.  

http://en.wikipedia.org/wiki/Silicon_Valley

Have you been on a computer or the internet lately.  Have you used a cell phone or an IPOD?  That is just a small part of what Silicon Valley is about.  Do you know how many people are employed in this country and the world on technologies that started in Silicon Valley and other hubs such as that in Boston around MIT.  It is not just computers and internet but medical technology as well.

Here is a genealogy chart of semi conductor development till 1975 from which the term Silicon Valley originated.  The chart I have at home is an expanded version but stops at 1986 and shows how the technology was spreading.  1986 is just around when personal computers became common in business and the internet and the DOT Com boom were more than 10 years away.

http://steveblank.files.wordpress.com/2010/08/fairchild-silicon-valley-genealogy.jpg 

Also here is a link from Stanford's entrepreneurship corner on the history of the micro chip and the relationship between the university and technology and business from the president of Intel.

http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2276 

All those phony new businesses and people with lousy paying jobs.  You would think we could do better but the government will lead us to the promise land eventually.
Marie Rehbein
7 years ago
JR,
Daniel J Mitchell is a libertarian and a flat tax advocate, right? I am being generous.  He gives the impression of being a nut in the video.

Well, tax policy does not drive the economy.  That is my opinion.  My opinion is based in large part on how much or little of my economic behavior is based on tax policy -  practically none, I do what I have to do and then I file a tax return.  Sometimes what I do results in a refund. 

If a change in tax policy initially resulted in more rich people paying more in taxes that would only be because they had not caught on right away to how to change things to best shield their money from taxation and had not managed to get their lobbyists to have different tax breaks put into the tax code yet.
Directing me to listen to people like Daniel J Mitchell, who are saying things I have already heard and disagree with is not going to change my mind on anything, particularly if they want to blame Obama's tax policy, which is not really a policy at all, but only differs from the Bush policy in that it gives a few additional deductions and credits to some middle class families.?
When a lot of money is concentrated in a few hands, as has become more and more the case in the last three decades, it all tends to go in the same direction, which leads to booms and busts.  Making sure that money is fairly distributed, and not just permitted to go to those whose existences are money oriented, who get the government to make policies that make it possible for them to amass more and more of it, results in variation in investment so that the economy as a whole is protected.

??T?h?e? ?t?e?c?h?n?o?l?o?g?y? ?b?o?o?m? ?started with good roots, then investors came swarming, overfertilizing the industry with money.  Does this have anything to do with how much money the rich get to amass?  Yes!  It has to do with it because the short term bottom line drives investment undertaken through investment houses.  Most people who are rich did not get that way by providing seed money to technology companies.

7 years ago
Just saw this

http://www.alan.com/2010/12/04/look-for-white-house-congress-deal-to-keep-bush-tax-cuts-in-return-for-jobless-benefits/

It says Obama will trade Republican tax policy for extension of unemployment benefits.  We will know in a couple days.  It may be just a trial balloon to see how much static either side generates.
7 years ago
''That would be some sort of victory.''


Why would it be a victory?  You could argue on basic economics it would be a defeat for the American people, especially the poor.  It would be another example of the anti social justice practiced by the Democrats. 
Gail Grazie
7 years ago
There are children in this country whose only meal of the day is the one they eat at school on the federal free and reduced lunch program. I don't understand how feeding the children is anti social justice.
ed gleason
7 years ago
I say let all the tax cuts expire and so call the Republican bluff. The republicans say the extention of un-employment needs to be funded. The new taxes are the funds..
read em and weep/.. [nobody mentions that the over 250k earners only pay the higher rate on the over 250k income... so 300K pays the higher rate only on the 50K  so so sad..]
7 years ago
'There are children in this country whose only meal of the day'

I am sure there are some children that meet this description.  In these cases something should be done.  But the cause of this situation can most likely be laid at the foot of the Democrat Party and their policies.

It was only a short time ago that the main dietary problem with the poor was obesity.
7 years ago
'nobody mentions that the over 250k earners only pay the higher rate on the over 250k income... so 300K pays the higher rate only on the 50K  so so sad..'

The thing that many here miss is how this money will be spent and what effect the marginal tax rates have on that spending.  Much of it will be invested, and this will create jobs for those out of work.  Without this investment, more poor out of work.  Giving money to the federal government does not produce any jobs because it does not fuel investment.  That is why if one group should be spared an increase in taxes is those who make more than $250,000 and the taxes should be made permanent which will affect behavior much more than short term changes.

Taxes are a dynamic phenomena and static.  All the statistics quoted are static and we learned when taxes were reduced during the Reagan administration that tax revenues actually increased with the lower rates.  The same result happened with the Bush tax cuts.  The rich actually paid much more in taxes after the tax reductions and revenues went up.  So reverse it and tax revenues will go down.
William Kurtz
7 years ago
On the other hand, Republicans warned that if Bill Clinton raised taxes in 1993 to the rates that would be reinstated if the Bush cuts expire, it would lead to a depression. Instead we had a long stretch of prosperity and balanced the budget, and I don't recall the rich suffering.  

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