fiscal cliff

Chambliss Watch: GA Gov declines to endorse, Price says 2014 is too far away

Tom Price

Sen. Saxby Chambliss (R-GA) has had a rough last couple of weeks. His willingness to break his no-tax pledge to Georgians has set off grassroots fiscal conservatives. Chambliss now finds himself in a vulnerable position, according to a new survey from Public Policy Polling, and potentially facing a primary challenge.

The blowback has been substantial. According to Daniel Malloy at the Atlanta Journal-Constitution, Gov. Nathan Deal (R-GA) declined endorse Chambliss in a recent interview, claiming that it was “too early to pick winners and losers”:

Malloy: “There is a lot of talk going around the state about Saxby Chambliss getting a Republican primary challenge. Would you support him if he does?”

Deal: “It’s way too early to be picking winners and losers and people that you’re going to support and not support. He’s a friend of mine. I served with him in the U.S. House and he will continue to be a friend of mine.”

During a recent interview with CNN, Rep. Tom Price (R-GA), who is emerging as the favorite among grassroots activists, declined to say whether or not he’ll run against Chambliss:

VIDEO: Heritage Foundation Bloggers Briefing With Reps. Justin Amash and Tim Huelskamp

Jason has already blogged on how Boehner kicked several freshman conservatives off the Budget and Financial committees. Now, here their side of the story, as Representatives Justin Amash of Michigan and Tim Huelskamp of Kansas came to Heritage Foundation to note what they see as the failures of GOP leadership — namely, they’re not running on their advantage of sane fiscal policy, and they will do anything, even hike taxes, in order to avoid cuts in military spending.

Also on hand was David Williams, president of the Taxpayers Protection Alliance, who talked about LEED certification, and how it’s a giant racket for the US Green Building Council. The Council is supposedly a nonprofit, but it’s dictated that federal building policy to mandate Gold LEED certification for all government buildings, which nets the Council some $50,000-$200,000 on average per building, on top of taxpayer monies they receive. Nonprofit? I hardly think so.

Republicans make a “fiscal cliff” counter-offer

boehner

Last week, the White House made their initial offer on the so-called “fiscal cliff,” asking congressional Republicans for $1.6 trillion in tax hikes coupled with a $400 billion in spending cuts over 10 years. Republicans leaders, who have been open to the idea of raising tax revenue, dismissed the unrealistic proposal out-of-hand, rightly explaining that the White House gave them something that would never pass Congress.

Yesterday, Republicans made their pitch to resolve the “fiscal cliff,” making a counter-offer that that cuts spending, reforms entitlements, and raises $800 billion in new tax revenue:

House Republican leaders on Monday made a counteroffer to President Obama in the “fiscal cliff” negotiations that would cut $2.2 trillion from the deficit with a combination of spending cuts, entitlement reforms and $800 billion in new tax revenue.

Republican officials said their 10-year plan contained more deficit reduction than the offer the White House presented last week while standing firm against Obama’s demand to increase tax rates on the wealthy.

The White House quickly panned the offer, saying it contained “nothing new” and did not “meet the test of balance.”

The Republican offer came in the form of a three-page letter to the White House signed by House Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.) and four other senior Republicans, including Rep. Paul Ryan (Wis.), the party’s just-defeated vice presidential nominee.

Could Mark Sanford make a comeback?

Mark Sanford

With Sen. Lindsey Graham (R-SC) under fire from conservatives for his desire to raise taxes as part of a “fiscal cliff” deal, there is speculation that former Gov. Mark Sanford, who made news in 2009 due to an affair, could try to make a political comeback:

For starters he’s done the one thing political observers insisted was absolutely necessary in the event he wanted to attempt a political comeback – legitimize his love affair with Argentinean hottie Maria Belen Chapur.  Sanford proposed to Chapur last week in Buenos Aires … and she accepted.  The result?  What was once viewed by some as a tawdry affair now looks more like thehappy ending to a romance novel.

What else is Sanford doing?  Working the press … like Newsday contributor Lane Filler, who encountered Sanford in a very interesting location at the 2012 Republican National Convention this week.

“I saw him coming down the escalator at the press center of the Republican National Convention in Tampa,” Filler writes of his “surprise encounter” with Sanford.

Hmmmm …

So if Sanford has no political future (and ostensibly knows it) then what exactly was he doing lurking around the press corps at the GOP convention?

The Fiscal Cliff: Let’s Just Dive Off And Get It Over With

fiscalcliff_banner

Everyone is fearing the fiscal cliff set to hit the country this New Year’s, a point when various tax cuts (including the Bush tax cuts) expire and automatic budget cuts agreed to in last year’s budget deal go into effect. Everyone is—except a growing number of politicians and pundits, who think that going over the fiscal cliff might be a good idea.

Senator Rand Paul, writing in the Wall Street Journal, seems to think so:

Americans are told that they face a “fiscal cliff” if automatic federal spending cuts and tax increases occur at the end of the year. I’m not in favor of jumping off a cliff, but the logic of the supposed threat needs to be questioned.

The fiscal-cliff narrative assumes that spending cuts are bad for the economy. It follows, then, that more spending (and therefore more government debt) are good for the economy.

Didn’t we try that with President Obama’s trillion-dollar deficit-spending spree? You remember the stimulus—the one that created or “saved” American jobs at a cost of $400,000 per job. The one that left the unemployment rate over 8% for 43 consecutive months, the longest span since the Great Depression.

So is it good for the federal government to borrow more and spend more, or is it good for the economy to spend less and borrow less? These questions might need to be addressed before we wring our hands in despair at the possible fiscal cliff.

David Harsanyi also thinks going over the cliff would be better than trying to concot a deal at the last minute, though for him, it’s a bit more on the politics side than anything else:

R STREET: 3 Taxes We Should Kill

As the fiscal cliff looms ahead of us, the R Street Institute has just come out with a “A TAX HIT LIST FOR THE 113TH CONGRESS” (PDF) naming three taxes that we should kill. Namely, they’re looking at the Corporate Income Tax, the Estate Tax, and tariffs.

From the report, on corporate income taxes:

 

While the corporate income tax is politically popular and has strong populist appeal, many economists have called it into question. For example, conservatives such as American Enterprise Institute economist Kevin Hassett and liberals like former Obama advisor Austan Goolsbee have studied the deadweight losses and other distortions imposed by the tax. As a result, policy analysts from across the political spectrum believe that it simply shouldn’t exist. It generates an enormous amount of economic dislocation relative to the revenue it raises, while encouraging myriad behaviors that do little or nothing to promote economic growth in the name of legal tax avoidance. Meanwhile, the potential benefits of eliminating it are substantial.

Though obscured by their structure, corporate income taxes are just another form of individual taxation. Every dollar of corporate income tax is ultimately paid by one of three groups of people: employees, customers, or shareholders. Because corporations pass all costs on to these groups, corporate income taxes inevitably lead to some combination of lower wages, higher prices, and lower returns for investors.

Republicans haven’t made an effective case on taxes

boehner

With concern over the “fiscal cliff” growing, one thing has become painfully clear — Republicans are losing the debate in the eyes of the public. Some Republicans in Congress have abandoned the pledge they made to their constituents never to raise taxes and others haven’t effectively made the case as to why President Barack Obama’s tax proposal is a loser for the country.

Let’s get one thing clear on the “fiscal cliff” debate — this is not about a “balanced approach” to solving the deficit problem, despite what President Obama may say. The tax proposal that the White House is pushing would raise revenues by $1.6 trillion over the next 10 years ($160 billion per year), but, as J.D. Foster of the Heritage Foundation recently noted, the “national debt still goes up by about $7 trillion” in that budget window. In other words, our deficit problems are still there.

Warren Buffett still pushing his irrelevant “millionaires tax”

Warren Buffett

Warren Buffett is back in the national news. With talks on the “fiscal cliff” heating up, Buffett is once again pushing for a “millionaires” tax (also known as the “Buffett Rule”) as bridge between some sort of comprehensive tax reform plan:

In an op-ed column in Monday’s New York Times, Buffett advocates that taxable income of between $1 million and $10 million should be taxed at a minimum 30% rate, and that income above $10 million should be taxed at 35%.

“A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours,” Buffett writes. “Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.”
[…]
Some have suggested comprehensive tax reform, which eliminates many deductions across the board and simplifies the tax code, would be the best policy for the economy. Buffett writes he supports such tax reform, but that he believes higher tax rates on the wealthy should be an interim step.

“The reform of such complexities should not promote delay in our correcting simple and expensive inequities,” he wrote in the Times. “We can’t let those who want to protect the privileged get away with insisting that we do nothing until we can do everything.”

Pressure builds on Saxby Chambliss

Taxby

Facing a backlash from grassroots activists just a few days after saying denouncing the pledge he once made to protect Georgians from tax hikes, Sen. Saxby Chambliss (R-GA) and staffers tried to play damage control yesterday.

Just before Thanksgiving, Chambliss filled in a Georgia-based television station on some of the “fiscal cliff” negotiations. When asked if he was worried that violating Americans for Tax Reform’s Taxpayer Protection Pledge may be used against him in a potential primary, Chambliss responded, “I care more about my country than I do about a 20-year-old pledge.” Chambliss also took aim at Grover Norquist, president of Americans for Tax Reform, saying, “If we do it his way, then we’ll continue in debt, and I just have a disagreement with him about that.”

“If we do it his way, then we’ll continue in debt, and I just have a disagreement with him about that

 

Read more: http://www.politico.com/news/stories/1112/84176.html#ixzz2DMo43u9L

 

 

Investment falling as businesses anticipate economic problems

cash

While House Republicans have made it a priority to protect business owners during negotiations over the so-called “fiscal cliff,” there are signs that investment as businesses seeing more economic problems coming:

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
[…]
Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.

Companies fear that failure to resolve the fiscal cliff will tip the economy back into recession by sapping consumer spending, damaging investor confidence and eating into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.

The Wall Street Journal does explain that the economy could see a boost when and if a deal is made to avoid the “fiscal cliff.” Don’t take that as a sign of approval from businesses and investors, but rather sign of them knowing what exactly they’re dealing with moving forward.


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