President's debt offer risky but could be win-win

By CHARLES BABINGTON, Associated Press

WASHINGTON (AP) — It's hard to know which is more surprising: a Democratic president pushing historic cuts in spending, including Social Security and Medicare. Or a Republican-controlled House refusing to accept the deal and declare a huge victory for long-sought GOP goals.

Political orthodoxy has been turned on its head ever since President Barack Obama stepped up his call for a bipartisan "grand bargain" to raise the national debt ceiling and avert a default on U.S. obligations. The deal would include $4 trillion in deficit reduction over 10 years, mainly through steep spending cuts but also including up to $1 trillion in new federal revenue.

House Speaker John Boehner  of Ohio
 arrives for a news conference on Capitol
 Hill in Washington,  Thursday, July
 21, 2011. (AP Photo/Susan Walsh)

Those are far bigger targets than typical budget negotiations. And the spending cuts would seem more appropriate for a Republican president than a Democrat.

Some pundits and political insiders say Republicans should leap at the offer. But there's a hitch: The new revenue — mainly from overhauling the tax code and lowering rates by eliminating or limiting a broad swath of loopholes, deductions and tax breaks — presumably would violate a no-net-tax-hike pledge that scores of Republican lawmakers have signed.

Mostly for that reason, House Republicans so far have rejected Obama's overture, despite the interest shown by Speaker John Boehner. Some pro-Republican analysts seem bewildered.

Obama's offer of big spending cuts would have "brutally fractured the Democratic Party," and congressional Republicans probably "will come to regret this missed opportunity," wrote David Brooks, a moderate-to-conservative columnist for The New York Times.

Such comments lead to a question: Why did Obama make the overture, and how might it affect him and his party as he ramps up his re-election campaign?

The consensus answer, based on interviews with key players in Congress, the White House and elsewhere, is that Obama may be maneuvering himself into a win-win political position for 2012, although it's not without risks.

If Congress approves a version of the "grand bargain," Obama can run next year as a president who began taming the runaway deficit, extracted concessions on higher taxes from Republicans and put Medicare and Social Security on a possible path toward greater stability.

If congressional Republicans block the plan — and especially if the Aug. 2 debt ceiling deadline is missed — Obama might persuasively argue that he tried his best to strike a compromise, at some political risk to himself. Recent polls suggest that strategy is working, as Americans seem disgruntled with the Republicans' dug-in opposition.

Either way, Obama can appeal to the all-important independent voters next year, portraying himself as above the bitterly partisan House and Senate squabbles. Polls show that independents are deeply unhappy with Congress. Even if Obama's ratings are not spectacular, he fares better.

A CBS-New York Times poll found that 68 percent of independents think an agreement on spending and the debt ceiling should include "a combination of both tax increases and spending cuts," which is the president's position. Fifty-five percent of Republicans in the survey hold that view.

Regardless of what happens to his plans to phase in tax and spending changes in future decades, Obama would be on record as pushing dramatic changes to government finances and Democratic traditions.

"We have the opportunity to do something big and meaningful," he said in an op-ed for USA Today. "I'm willing to cut historic amounts of spending in order to reduce our long-term deficits."

His proposals include:

—Increasing the eligibility age for Medicare recipients from 65 to 67 by 2036.

—Raising co-pays and premiums for Medicare beneficiaries based on their incomes. Such "means testing" already exists; the president's proposal would expand it.

—Decreasing the size of annual cost-of-living increases in Social Security benefits.

Obama first talked of tackling Medicare, Medicaid and Social Security spending in his State of the Union speech in January. After a budget stalemate nearly shut down the government, he revived the talk in April.

In a speech at George Washington University, the president offered the outlines of a $4 trillion deficit reduction plan over 12 years. It included reductions in Medicare and Medicaid spending of $340 billion by 2021, or $480 billion by 2023.

Initial deficit-reduction talks with a bipartisan group of lawmakers and led by Vice President Joe Biden focused on a smaller number — $2.4 trillion over 10 years. That was Boehner's price for an increase in the debt ceiling of a similar amount. The plan included modest changes in Medicare and Medicaid. Democrats also envisioned closing some tax loopholes and limiting some deductions.

When conservative Republicans' objections to tax increases prompted GOP negotiators to back away, Obama resumed talk of a "big deal" of about $4 trillion.

White House officials say Obama concluded that if both sides wanted to take on each other's sacred cows — Republicans' opposition to tax increases, and Democrats' support for entitlement programs — then why not seek a major deal with a long-term impact?

Republicans, and some Democrats, complain that Obama's proposals are maddeningly vague. Some suspect he's laying a trap for Republicans with gauzy proposals and ample chances for Democrats to wriggle out of their obligations in the coming years and decades.

"I don't know what the $4 trillion deal is," said Sen. Lindsey Graham, R-S.C. "These cuts don't have any definitions," he said, nor do the proposed revenue hikes.

Obama also risks alienating his liberal base by even entertaining such ideas as entitlement cuts in broad terms. His advisers believe the potential gain in support from independent voters is worth angering some liberal stalwarts.

Liberal leaders, including labor unions and House Democratic leader Nancy Pelosi, have been relatively quiet so far. They say the entitlement programs' benefits must be protected, and revenues must be raised, but they've avoided ultimatums.

Congressional insiders say Pelosi and her allies realize that, thus far, Republicans are taking the chief blame for appearing obstinate. If the "grand bargain" approach fails, liberal Democrats can appear to have been more open-minded while avoiding hits to their favorite programs.

If the grand bargain approach succeeds, however, liberals will fight to minimize cuts in entitlement benefits.

Other components of Obama's offer include:

—Limiting the growth in federal health care costs to national economic growth as measured by the gross domestic product, plus one-half of 1 percent.

—Giving a strengthened Independent Payment Advisory Board authority to force Medicare cuts if costs rise beyond certain levels. Lately the administration has been playing down the agency as a "backstop."

—Finding about $200 billion in savings over 10 years through cuts to Medicare and Medicaid providers, including drug companies, hospitals, home health agencies and nursing homes.

Past efforts to include such savings have run aground. The most notable example is a 1997 law that requires a cut in physician fees, a requirement that Republican and Democratic Congresses have routinely postponed.

Copyright © 2011 The Associated Press. All rights reserved

Read more »

President's debt offer risky but could be win-win
By CHARLES BABINGTON, Associated Press – 6 hours ago
WASHINGTON (AP) — It's hard to know which is more surprising: a Democratic president pushing historic cuts in spending, including Social Security and Medicare. Or a Republican-controlled House refusing to accept the deal and declare a huge victory for long-sought GOP goals.
Political orthodoxy has been turned on its head ever since President Barack Obama stepped up his call for a bipartisan "grand bargain" to raise the national debt ceiling and avert a default on U.S. obligations. The deal would include $4 trillion in deficit reduction over 10 years, mainly through steep spending cuts but also including up to $1 trillion in new federal revenue.
Those are far bigger targets than typical budget negotiations. And the spending cuts would seem more appropriate for a Republican president than a Democrat.
Some pundits and political insiders say Republicans should leap at the offer. But there's a hitch: The new revenue — mainly from overhauling the tax code and lowering rates by eliminating or limiting a broad swath of loopholes, deductions and tax breaks — presumably would violate a no-net-tax-hike pledge that scores of Republican lawmakers have signed.
Mostly for that reason, House Republicans so far have rejected Obama's overture, despite the interest shown by Speaker John Boehner. Some pro-Republican analysts seem bewildered.
Obama's offer of big spending cuts would have "brutally fractured the Democratic Party," and congressional Republicans probably "will come to regret this missed opportunity," wrote David Brooks, a moderate-to-conservative columnist for The New York Times.
Such comments lead to a question: Why did Obama make the overture, and how might it affect him and his party as he ramps up his re-election campaign?
The consensus answer, based on interviews with key players in Congress, the White House and elsewhere, is that Obama may be maneuvering himself into a win-win political position for 2012, although it's not without risks.
If Congress approves a version of the "grand bargain," Obama can run next year as a president who began taming the runaway deficit, extracted concessions on higher taxes from Republicans and put Medicare and Social Security on a possible path toward greater stability.
If congressional Republicans block the plan — and especially if the Aug. 2 debt ceiling deadline is missed — Obama might persuasively argue that he tried his best to strike a compromise, at some political risk to himself. Recent polls suggest that strategy is working, as Americans seem disgruntled with the Republicans' dug-in opposition.
Either way, Obama can appeal to the all-important independent voters next year, portraying himself as above the bitterly partisan House and Senate squabbles. Polls show that independents are deeply unhappy with Congress. Even if Obama's ratings are not spectacular, he fares better.
A CBS-New York Times poll found that 68 percent of independents think an agreement on spending and the debt ceiling should include "a combination of both tax increases and spending cuts," which is the president's position. Fifty-five percent of Republicans in the survey hold that view.
Regardless of what happens to his plans to phase in tax and spending changes in future decades, Obama would be on record as pushing dramatic changes to government finances and Democratic traditions.
"We have the opportunity to do something big and meaningful," he said in an op-ed for USA Today. "I'm willing to cut historic amounts of spending in order to reduce our long-term deficits."
His proposals include:
—Increasing the eligibility age for Medicare recipients from 65 to 67 by 2036.
—Raising co-pays and premiums for Medicare beneficiaries based on their incomes. Such "means testing" already exists; the president's proposal would expand it.
—Decreasing the size of annual cost-of-living increases in Social Security benefits.
Obama first talked of tackling Medicare, Medicaid and Social Security spending in his State of the Union speech in January. After a budget stalemate nearly shut down the government, he revived the talk in April.
In a speech at George Washington University, the president offered the outlines of a $4 trillion deficit reduction plan over 12 years. It included reductions in Medicare and Medicaid spending of $340 billion by 2021, or $480 billion by 2023.
Initial deficit-reduction talks with a bipartisan group of lawmakers and led by Vice President Joe Biden focused on a smaller number — $2.4 trillion over 10 years. That was Boehner's price for an increase in the debt ceiling of a similar amount. The plan included modest changes in Medicare and Medicaid. Democrats also envisioned closing some tax loopholes and limiting some deductions.
When conservative Republicans' objections to tax increases prompted GOP negotiators to back away, Obama resumed talk of a "big deal" of about $4 trillion.
White House officials say Obama concluded that if both sides wanted to take on each other's sacred cows — Republicans' opposition to tax increases, and Democrats' support for entitlement programs — then why not seek a major deal with a long-term impact?
Republicans, and some Democrats, complain that Obama's proposals are maddeningly vague. Some suspect he's laying a trap for Republicans with gauzy proposals and ample chances for Democrats to wriggle out of their obligations in the coming years and decades.
"I don't know what the $4 trillion deal is," said Sen. Lindsey Graham, R-S.C. "These cuts don't have any definitions," he said, nor do the proposed revenue hikes.
Obama also risks alienating his liberal base by even entertaining such ideas as entitlement cuts in broad terms. His advisers believe the potential gain in support from independent voters is worth angering some liberal stalwarts.
Liberal leaders, including labor unions and House Democratic leader Nancy Pelosi, have been relatively quiet so far. They say the entitlement programs' benefits must be protected, and revenues must be raised, but they've avoided ultimatums.
Congressional insiders say Pelosi and her allies realize that, thus far, Republicans are taking the chief blame for appearing obstinate. If the "grand bargain" approach fails, liberal Democrats can appear to have been more open-minded while avoiding hits to their favorite programs.
If the grand bargain approach succeeds, however, liberals will fight to minimize cuts in entitlement benefits.
Other components of Obama's offer include:
—Limiting the growth in federal health care costs to national economic growth as measured by the gross domestic product, plus one-half of 1 percent.
—Giving a strengthened Independent Payment Advisory Board authority to force Medicare cuts if costs rise beyond certain levels. Lately the administration has been playing down the agency as a "backstop."
—Finding about $200 billion in savings over 10 years through cuts to Medicare and Medicaid providers, including drug companies, hospitals, home health agencies and nursing homes.
Past efforts to include such savings have run aground. The most notable example is a 1997 law that requires a cut in physician fees, a requirement that Republican and Democratic Congresses have routinely postponed.
Copyright © 2011 The Associated Press. All rights reserved

Read more »

The Daily News says... NYPD Commissioner Ray Kelly is the right choice for mayor after making NYC safer, better

Linked from...

Read more »

Obama: "Ambitious" Debt-Deficit Deal Must Have Tax Increases, Spending Cuts

President Barack Obama said that he wants to reach with Congress an "ambitious" deal to raise the U.S. debt ceiling by the end of tomorrow and claimed that "the American people are sold" on a middle-of-the-road balanced deal that include taxes to provide revenue and spending cuts.

In his third press conference in two weeks, the president said the federal government has a major chance to improve its finances. He also cited news media polls to claim that a majority of Democratic and Republican voters approve of a deal that will both cut federal spending and increase taxes for all Americans.

"We have a unique opportunity to do something big. We have a chance to stabilize America's finances for a decade, or 15 years or 20 years if we're willing to seize the moment," Obama said. "What that would require is a shared sacrifice and a balanced approach that says we're going make significant cuts in domestic spending."

He asked Republican opponents to allow for tax increases, so that millionaires' tax cuts could be eliminated, the tax code could be reformed and unnecessary federal programs could be cut.

Obama said he would consider domestic cuts in defense and health care, as well as stabilizing Medicare and additional revenues.

Meanwhile, after five days of discussions on the debt between the president and congressional leaders have not produced any debt solutions, Senate leaders may soon agree on a plan.

This back-up plan being considered would give Obama the authority to raise the debt ceiling, while procedures would be established to implement spending cuts.

Republican leaders in the House of Representatives give another alternative this morning, saying they planned to vote next week on a plan to increase the debt ceiling in exchange for $2.4 trillion in spending cuts over 10 years.

However, House Speaker John Boehner continued to pledge that any plan with tax increases will not pass the Republican-controlled chamber.

His comments came as another credit rating agency puts the United States on notice.

Standard & Poor's says there is a 50 percent chance it will downgrade the U.S. government's credit rating within three months because of the congressional impasse over the debt ceiling.

That comes a day after Moody's said it would review the government's AAA bond rating.

The United States risks defaulting on its loans on August 2, which the Obama administration claims would lead to inflated interest rates and a worsened economy.

Read more »

The Daily Show With John Stewart - Full Episode July 14, 2011

July 14, 2011 - Leroy Petry
The ongoing debt ceiling negotiations get heated, and Leroy Petry demonstrates his robotic hand.
The Daily Show With John Stewart

Read more »

July 4th & the Declaration of Independence A Revolutionary Manifesto

On July 5, 1852, the great abolitionist Frederick Douglass spoke clearly in his speech “The Meaning of July Fourth for the Negro”: 

“What, to the American slave, is your 4th of July?” he asked. “A day that reveals to him, more than all other days in the year, the gross injustice and cruelty to which he is the constant victim.” He went on to call slave holding America’s celebrations “a thin veil to cover up crimes which would disgrace a nation of savages.” 

Yet he went on to conclude: 

“Notwithstanding the dark picture I have this day presented, of the state of the nation, I do not despair of this country … I, therefore, leave off where I began, with hope. While drawing encouragement from the Declaration of Independence, the great principles it contains, and the genius of American Institutions, my spirit is also cheered by the obvious tendencies of the age.”

He was referring to the growing abolitionist movement, which would triumph with the abolition of slavery only a decade later.

Progressive Americans are never shy of calling out Americas shortcoming and fighting against all of the "ism" present within the makeup of our nation (racism, imperialism, militarism, classicism, sexism).  Women are just reaching and in some areas just now cracking the proverbial glass ceiling. Our foreign policy continues to be defined by our arrogant imperialism as directed by the overreaching influence of the industrial military complex. Domestically our national identity is scarred by the vestiges of slavery, Jim Crow and racism. It is a scar that runs so deep it continues to defines generations of American.

Yet Progressives we rarely take time to notice and celebrate, that America at its core is a nation of ideals, of hope and progressive movement. The Declaration of Independence — America’s foundation — is built on continually progressing — and revolutionary — principles. We are a country with a noble history of struggle for equality, secularism, liberty and civil rights. 

It is frequently forgotten that my namesake, a radical internationalist "the original American Immigrant",  the revolutionary  Thomas Paine created the blue print for what America should be.  In his  brilliant pamphlet “Common Sense,” he urged the end of monarchy, poverty, war and slavery from the beginning. Issued on January 10, 1776, it was considered the manifesto of the revolution.  It strongly influenced Jefferson’s draft of the Declaration of Independence six months later, which in turn became the guiding principles for the French Revolution’s Declaration of the Rights of Man. 

Our American Revolution, which we Celebrate today,  has inspired revolutionaries all over the world since 1776. Contemplating the relationship between the American and French revolutions,  Karl Marx saw the American revolution as “the first impulse … to the European revolutions of the eighteenth century” and said its declaration “informed the whole world of the foundation of an independent great Democratic Republic on the American continent.” He refereed to it as the “first Declaration of the Rights of Man.” The Nicaraguan revolutionary/nationalist Augusto Cesar Sandino, was so inspired by the principles of the American war of independence that he translated and adopted or "liberty or death" motto to "Patria ó Muerte!" Almost two centuries later in Vietnam, Ho Chi Minh called the opening words of the Declaration of Independence “immortal.”  In the recent upheaval in Egypt and the democracy movement throughout out the Middle East, bootlegged copies of our declaration of independence inspired young people to challenge some of the most brutal regimes of our age. 

In his landmark speech “Towards a More Perfect Union”  then Senator and Presidential candidate Obama spoke about what is truly great about this country. 

Two hundred and twenty one years ago, in a hall that still stands across the street, a group of men gathered and, with these simple words, launched America's improbable experiment in democracy. Farmers and scholars; statesmen and patriots who had traveled across an ocean to escape tyranny and persecution finally made real their declaration of independence at a Philadelphia convention that lasted through the spring of 1787. 

The document they produced was eventually signed but ultimately unfinished. It was stained by this nation's original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least twenty more years, and to leave any final resolution to future generations. 

Of course, the answer to the slavery question was already embedded within our Constitution - a Constitution that had at its very core the ideal of equal citizenship under the law; a Constitution that promised its people liberty, and justice, and a union that could be and should be perfected over time. 

And yet words on a parchment would not be enough to deliver slaves from bondage, or provide men and women of every color and creed their full rights and obligations as citizens of the United States. What would be needed were Americans in successive generations who were willing to do their part - through protests and struggle, on the streets and in the courts, through a civil war and civil disobedience and always at great risk - to narrow that gap between the promise of our ideals and the reality of their time. That is the true genius of this nation. What we have already achieved gives us hope - the audacity to hope - for what we can and must achieve tomorrow. 

This was the tasks we set forth... - to continue the long march of those who came before us, a march for a more just, more equal, more free, more caring and more prosperous America...

Ours is not a stagnant nation beholden to the customs, mores, and moral dictum of the 18th century or permanently committed to  all of the "ism's" of today. 

This is a nation that believes at its core that all of humanity is created equal. Enjoy the 4th of July barbecues, fireworks and celebrations. Because on the 5th of July our our work continues; "to narrow that gap between the promise of our ideals and the reality of their time". 

Read more »

Read more »