Obama Signs Payroll Tax Cut Extension Into Law

Obama isn't any kind of Democrat.  

A Democrat who governs as a Republican, continuing just about all of the BushCheney policies and getting Republican legislation through Congress isn't "better".  

With Obama, we're getting Republican policies sold to us as if they're what we wanted.  Just because the Republican Party's base is too stupid to know they should be thrilled to have Obama in the White House doesn't mean the Democratic Party's base is.  

Back during the campaign in 2008, Democratic voters refused to press Obama when he said this:

"I don't want to present myself as some sort of singular figure. I think part of what is different is the times. I do think that, for example, the 1980 election was different. I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not. He put us on a fundamentally different path because the country was ready for it. They felt like with all the excesses of the 60s and the 70s and government had grown and grown but there wasn't much sense of accountability in terms of how it was operating. I think he tapped into what people were already feeling. Which is we want clarity, we want optimism, we want a return to that sense of dynamism and entrepreneurship that had been missing."

He admires and wants to emulate Reagan.  

What Obama's supporters like you are doing is really insidious.  At a time when we could be, should be, using this primary season to get a real progressive, a real Democrat into the Oval Office, Obama supporters are saddling us with this Republican-In-Democrat's-Clothing.  This Obama campaign strategy, to run out the primary clock, kick-the-can down the road until it's too late and Democratic voters are left with just him is Obama's formula for everything.  It's going to saddle us with at least another 4 years of bad times, expanding wars, joblessness, foreclosures, completely destroying the middle class and wrecking the environment and civil rights.

Any Republican president doing what Obama's done would get excoriated by you, but because he's got a 'D' after his name, you go along.  You keep Obama's numbers up and then you try to play the fear-card ("The Republicans are coming, the Republicans are coming!").  

You've either lost your mind or you're a political operative whose living depends on perpetrating this fraud.
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Obama Signs Payroll Tax Cut Extension Into Law

I'm an old, OLD liberal Democrat and the "lesser of two evils"-argument just doesn't work anymore.

How can you say (and expect to be taken seriously) that Republicans are by far worse when Obama's continuing just about all the BushCheney policies, even going BushCo one better:  

How do any of Obama's 'most ardent supporters' explain Obama's doctrine that presidents have the right to kill American citizens with no due process, no oversight, NDAA, and his push for 'indefinite preventive detention' and no transparency of anything a president asserts should be his secret?  It's Pure Kafka.

I don't know how any Democrat can get behind this.  

And it's Obama who's put SocialSecurity and Medicare and Medicaid on the table.

At this point, I'd argue that Obama-Democrats are worse.  BushCheney make no bones or excuses for what they've done and who they are, whereas Obama-Democrats ran on knowing better.  

Consider our elections as a business plan where the 'CorporateMastersOfTheUniverse' have charted out their plans years in advance and then they select the politician with the personality that's best able to achieve those plans in 4 year increments.

If you want to lie the country into war for oil and profiteering, then GeorgeWBush is your man to front it, with DickCheney, the former SecretaryOfDefense who initiated the privatizing of the military a decade earlier, actually running the operation from the shadows.  

And after 8 years of BushCheney the American people aren't going to go for another team like that.  They're going to want HOPE and CHANGE, with a persona they can believe in and trust.  BarackObama.   

Obama's 'most ardent admirers' just like the packaging better.  I'm not talking skin color, although that may be a factor for some of them; I'm talking about how a 'D' after the name is a brand they trust believe and trust in, despite the fact that it's the same 'soap' (product).

You continue to support Obama-Democrats at the expense of your own best interests. As long as his numbers remain high, he does the bidding of corporations and establishment elites.

Why should Obama-Democrats do anything for you if they know they've got you over a barrel, that you're going to vote for them no matter what, because you're terrified of Republicans?
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Obama Signs Payroll Tax Cut Extension Into Law

Obama put SocialSecurity "on the table" for consideration by his DeficitCommission -- even though SocialSecurity has not contributed to creating or sustaining the deficit/debt in the first place.  He kept Social Security on the table when he made a deal to delegate deficit reduction authority over entitlements to an undemocratic Super Committee.  Now, in a speech reportedly about jobs, he proposed to extend and increase the ill-considered FICA tax cut he embraced last December -- a tax cut that directly undermines the financial integrity of Social Security.

According to the WhiteHouseFactSheet on "TheAmericanJobsAct" the FICA tax holiday for workers will be increased to a 50% reduction, lowering it to 3.1%.  Under the 2010 tax deal, the payroll tax for workers was reduced from 6.2% to 4.2%.  In addition to expanding the tax cut for workers, Obama has extended the FICA tax holiday to employers by cutting in half the employer's share of the payroll tax through the first $5 million in payroll. 

Big questions about the wisdom, efficacy, and implications of a tax-based jobs strategy need to be debated.  Even bigger questions about the consequences of the payroll tax holiday in particular need to be answered.  These questions are not just about the relationship between payroll tax cuts and job growth.  They are about the future of SocialSecurity.
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Obama Signs Payroll Tax Cut Extension Into Law

The FICA/payroll tax goes into the SocialSecurity TrustFund.  This is a dedicated fund currently worth $2.6 trillion, which has been built up over time through employee and employer contributions, along with accrued interest.  Current and future SocialSecurity beneficiaries receive benefits from this fund.  No general revenues are involved, except for administrative and clerical costs.

Under the payroll tax cut initiated in the 2010 lame duck tax deal, the revenue loss to the TrustFund from the payroll tax holiday is made up through compensatory payments into the TrustFund from general revenues. This scheme is now continuing -- deepening a relationship between SocialSecurity and general revenues (read deficit) that did not exist until the December 2010 tax deal.  This will make SocialSecurity increasingly vulnerable to demands for "reform."

In the worst case, Congress could choose to enact the payroll tax cut without actually appropriating revenue compensation for the TrustFund.  This would mean that the payroll tax cut directly depletes the TrustFund, creating financial/actuarial problems far sooner than the currently anticipated shortfall date of 2036.

But even if the TrustFund receives full revenue compensation -- for both employer and employee contributions -- SocialSecurity will be jeopardized.  That's because the resources in the TrustFund will be increasingly comingled with general revenue funds -- and, hence, increasingly connected to the deficit.

If the government can't  pay back SocialSecurity money it has borrowed to pay for other things (through IOUs, bonds, etc), it certainly won't be shy about cutting SocialSecurity to pay itself back for funds it shared with Social Security to offset revenue losses from the payroll tax holiday.

Also worth worrying about here is contagious political cowardice about "raising taxes."  The payroll tax holiday is framed as just that -- a holiday, ie, a short-lived break. But as we know from other tax cuts with built-in expiration dates, the planned end of a tax cut quickly becomes a "tax increase" in popular parlance.  There hasn't been much resolve to allow the years-long tax holiday for the rich to end.  When the time comes, will there be greater resolve to allow an end to the 2-year tax holiday for workers and 1-year tax holiday for employers?  Even when billed as a "middle class tax increase" and a "job-killing tax on business"?

Once the payroll tax basis of SocialSecurity financing has been corrupted the future of SocialSecurity will no longer be in doubt.  It won't have one.

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Birth Control Debate: NH Lawmaker Proposes Repeal of 'Obsolete And Outdated' Contraception Law

There’s actually substantial disagreement over the magnitude of savings. There’s an entire school of economics, known as Modern Monetary Theory, which would disagree on that broad point. But they have been largely written out of the discussion (though I’m glad to see MMT written up in the Washington Post this weekend).

So both sides play a role in shifting the Overton Window to the right. And the result is a set of policy choices that get artificially narrowed. Thoma says that the President has managed to “stop the rightward drift in the center of the conversation” and that we need someone to start shifting it back. He questions whether the President is up to that task ideologically, i.e. whether he even wants to engage on those terms. I don’t even think this is much of a question at this point.

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Birth Control Debate: NH Lawmaker Proposes Repeal of 'Obsolete And Outdated' Contraception Law

Thoma adds that Tim Geithner actually backed off of one aspect of Bowles-Simpson, the Social Security changes, because they were, in Geithner’s words, too tilted on the side of benefit cuts. But the problem lies in making Bowles-Simpson as the wise middle ground in the debate. When the President reached out to John Boehner with a deficit plan that was actually to the right of Bowles-Simpson, again playing on the opposing turf, then it was foreordained that Bowles-Simpson would become the moderate compromise, even though it couldn’t even get a vote on its own committee.

Thoma links to a Treasury Department blog that makes almost exactly the point I’ve been making – the President’s budget doesn’t shy away from the long-sought goal of deficit reduction, and at the same level as before. It changes some of the ratios of how the deficit reduction gets achieved, but by and large the same goals are in the foreground.

The Budget released by the President this week uses a balanced approach to achieve more than $4 trillion in deficit reduction over the next 10 years. This level of savings and the manner in which they are accomplished are broadly consistent with the bipartisan deficit reduction proposals put forward by the Bowles-Simpson Commission and the Senate’s bipartisan “Gang of Six.” Using this balanced approach, the President’s Budget reduces deficits from about 9 percent of GDP in 2011 to below 3 percent by 2018, and stabilizes the debt as a share of the economy by the middle of the decade.

In general, there is little disagreement on the magnitude of savings that are needed over the next decade to put us on a sustainable fiscal course. Rather, the main difference between the President and Republicans are related to the composition of these savings.


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Birth Control Debate: NH Lawmaker Proposes Repeal of 'Obsolete And Outdated' Contraception Law

It's not just the Republicans; Obama and Democrats have let them control the discussion.

As Dave Dayen has said:

I liked this Mark Thoma piece about the shifting of the Overton Window. I think I alluded to this with my story on a new round of tax cuts being humped by the GOP, and the new bipartisan consensus on the virtue of tax cuts as a stimulus measure. I know exactly what the Administration would say, they’re trying to get things done, and a payroll tax cut mimics a wage increase. And on the merits, that’s fine. But the point I made earlier is that it’s the ideological drift that you get when you fight on the other side’s turf that becomes the problem. This is what Thoma gets at in his piece:
For example, consider the current discussion over the president’s proposed budget, a budget that is touted as “broadly consistent with the bipartisan deficit reduction proposals put forward by the Bowles-Simpson Commission.”


I thought the recommendations for balancing the budget that came out of the Bowles-Simpson committee gave far too much to the GOP – the solutions that were proposed were much further to the right of the political spectrum than I would have preferred. My recollection is that people such as Paul Krugman and Dean Baker were critical as well (and recall that there was no official report because four Democrats and three Republicans on the seventeen member committee could not agree to the recommendations on the table — instead we got an unofficial report from the committee chairs, Bowles and Simpson).


However, Republicans have shifted the debate so far to the right that Bowles-Simpson is now being portrayed by the administration and others as a model of balance, reason, and compromise that both sides ought to embrace.

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