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WASHINGTON (AP) — The White House says President Barack Obama’s upcoming budget proposal will not include his past offer to accept lowered cost-of-living increases in Social Security and other benefit programs. Those had been a central component of his long-term debt-reduction strategy.

Officials said Thursday that those potential reductions in spending, included in last year’s Obama budget, had been designed to initiate negotiations with Republicans over how to reduce future deficits and the nation’s debt. But Republicans never accepted Obama’s calls for higher tax revenue to go along with the cuts.

One official said the offer would remain on the table in the event of new budget talks but that it would not be part of the president’s formal spending blueprint for fiscal 2015.

The official was not authorized to comment by name on the budget plan before its March 4 release and spoke only on condition of anonymity.

The decision to drop the cost-of-living proposal was essentially an acknowledgement that Obama has been unable to conclude a “grand budget bargain” with Republican leaders, even by including in his previous budget plan a benefit reduction opposed by many Democrats.

While Democrats will cheer the new decision, Republicans are sure to portray the White House move as abandoning any commitment to fiscal discipline.

The new Obama proposal would eliminate congressionally mandated automatic spending cuts that are scheduled to continue kicking in through 2015 by adding $56 billion to the budget, evenly divided between military and domestic spending. That increase would include money for what the White House calls an “Opportunity, Growth, and Security Initiative.”

H/T: Huffington Post

Congress’s top budget negotiators have reached an agreement that would fund the government for the next two years—this time without the partisan rancor and drama that have poisoned budget talks since 2011. 

The $85 billion deal negotiated by Rep. Paul Ryan and Sen. Patty Murray sets overall discretionary spending levels at $1.012 trillion in 2014 and $1.014 trillion in 2015, undoing about $63 billion of the automatic cuts for the next two years. Without changing the law, sequestration’s cuts will continue to get deeper, lowering discretionary spending to $967 billion in 2014.

The Ryan-Murray agreement is a notable break from the fiscal brinksmanship that has sent Washington lurching from one budget crisis to the next, most recently shutting down the government for 16 days in October. “This deal does not solve all our problems. But I think it’s an important step to heal some of the wounds here in Congress,” said Murray on Tuesday.

The spending increases to undo sequestration will be offset by higher government fees, and federal and military pension cuts. The offsets are also big enough to reduce the deficit by an additional $20 to $23 billion. But about two-thirds of sequestration for 2014 and 2015 would stay in place. 

The agreement is likely to come to a vote in the House before the week’s end, as the chamber is scheduled to break for Christmas recess after Friday and won’t be back in session until 2014. Congress must pass a budget agreement before January 15 to avoid another government shutdown.

Unlike in previous fights, Congressional leaders managed to reach a preliminary agreement ahead of schedule, and House GOP leaders say they want to avoid repeating the mistakes of October’s shutdown. ”While modest in scale, this agreement represents a positive step forward by replacing one-time spending cuts with permanent reforms to mandatory spending programs that will produce real, lasting savings,” Speaker John Boehner said in a statement.

[…]

The agreement preserves the $2.1 trillion in deficit reduction mandated by the 2011 debt-ceiling deal and reduces the deficit by an additional $23 billion. But the spending hikes and revenue increases already irked some conservative members and groups. “Heritage Action cannot support a budget deal that would increase spending in the near-term for promises of woefully inadequate long-term reductions,” the group said earlier Tuesday.

Liberals, for their part, aren’t happy that the deal preserves so much of sequestration, whose automatic cuts will continue through 2021. The deal also doesn’t include an extension of federal unemployment benefits, which are scheduled to expire at the end of this month for 1.3 million long-term jobless. 

“This agreement doesn’t include everything I’d like - and I know many Republicans feel the same way,” said Obama in the statement. “That’s the nature of compromise. But it’s a good sign that Democrats and Republicans in Congress were able to come together and break the cycle of short-sighted, crisis-driven decision-making to get this done.” He called on members of Congress “to take the next step and actually pass a budget based on this agreement so I can sign it into law and our economy can continue growing and creating jobs without more Washington headwinds.”

h/t: MSNBC.com

WASHINGTON (AP) — An exhausted Senate gave pre-dawn approval Saturday to a Democratic $3.7 trillion budget for next year that embraces nearly $1 trillion in tax increases over the coming decade but shelters domestic programs targeted for cuts by House Republicans.

While their victory was by a razor-thin 50-49, the vote let Democrats tout their priorities. Yet it doesn’t resolve the deep differences the two parties have over deficits and the size of government.

Joining all Republicans voting no were four Democrats who face re-election next year in potentially difficult races: Sens. Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas. Sen. Frank Lautenberg, D-N.J., did not vote.

The vote came after lawmakers labored through the night on scores of symbolic amendments, ranging from voicing support for letting states collect taxes on Internet sales to expressing opposition to requiring photo ID’s for voters.

The Senate’s budget would shrink annual federal shortfalls over the next decade to nearly $400 billion, raise unspecified taxes by $975 billion and cull modest savings from domestic programs.

In contrast, a rival budget approved by the GOP-run House balances the budget within 10 years without boosting taxes.

That blueprint— by House Budget Committee Chairman Paul Ryan, R-Wis., his party’s vice presidential candidate last year — claims $4 trillion more in savings over the period than Senate Democrats by digging deeply into Medicaid, food stamps and other safety net programs for the needy. It would also transform the Medicare health care program for seniors into a voucher-like system for future recipients.

Already this year, Congress has raised taxes on the rich after narrowly averting tax boosts on virtually everyone else, tolerated $85 billion in automatic spending cuts, temporarily sidestepped a federal default and prevented a potential government shutdown.

By sometime this summer, the government’s borrowing limit will have to be extended again — or a default will be at risk — and it is unclear what Republicans may demand for providing needed votes. It is also uncertain how the two parties will resolve the differences between their two budgets, something many believe simply won’t happen.

Both sides have expressed a desire to reduce federal deficits. But President Barack Obama is demanding a combination of tax increases and spending cuts to do so, while GOP leaders say they won’t consider higher revenues but want serious reductions in Medicare and other benefit programs that have rocketed deficits skyward.

Obama plans to release his own 2014 budget next month, an unveiling that will be studied for whether it signals a willingness to engage Republicans in negotiations or play political hardball.

The amendments senators considered during their long day of debate were all non-binding, but some delivered potent political messages.

They voted in favor of giving states more powers to collect sales taxes on online purchases their citizens make from out-of-state Internet companies, and to endorse the proposed Keystone XL pipeline that is to pump oil from Canada to Texas refineries.

They also voted to voiced support for eliminating the $2,500 annual cap on flexible spending account contributions imposed by Obama’s health care overhaul, and for charging regular postal rates for mailings by political parties, which currently qualify for the lower prices paid by non-profits.

In a rebuke to one of the Senate’s most conservative members, they overwhelmingly rejected a proposal by Sen. Rand Paul, R-Ky., to cut even deeper than the House GOP budget and eliminate deficits in just five years.

The Democratic budget’s $975 billion in new taxes would be matched by an equal amount of spending reductions coming chiefly from health programs, defense and reduced interest payments as deficits get smaller than previously anticipated.

This year’s projected deficit of nearly $900 billion would fall to around $700 billion next year and bottom out near $400 billion in 2016 before trending upward again.

Shoehorned into the package is $100 billion for public works projects and other programs aimed at creating jobs.

h/t: USA Today

theatlantic:

Paul Ryan’s Budget, Simplified: Save the Rich, Spare the Old, Forget the Poor

It balances the budget! But it solves our income inequality problem like a flamethrower solves a house fire.

Read more. 

(via rapunzels-inquisition-deactivat)

After weeks of uncertainty, bluffing and posturing in Washington D.C., the Senate voted in the early hours of Tuesday morning to avoid the “fiscal cliff” of tax increases and spending cuts. However, the fiscal bargaining is far from over and more budget drama is likely on the way.

The deal brokered by Vice President Joe Biden and Senate Republican Leader Sen. Mitch McConnell of Kentucky would raise income taxes on single earners with annual incomes above $400,000 and married couples with incomes above $450,000.

The measure will now be turned over to the House, which needs to give its backing and will hold a session on Tuesday starting at noon.

House Speaker John Boehner — the top Republican in Congress — said the House would consider the Senate deal. But he left open the possibility of the House amending the Senate bill, which would spark another round of legislating.

"The House will honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members … have been able to review the legislation," Boehner and other House Republican leaders said in a statement.

Next big fight
Although the Senate agreed at the last minute to avert broader tax increases, the very idea of a “deadline” has lost some of its meaning since each budget deal seems to be merely a prelude to another fixed date when some critically important action must be taken – next up: Congress will have to decide what to do about the “sequester” spending cuts which will come up again in February, as well as decide in March on whether to increase the federal borrowing limit.

Congress is also set to embark on fundamental tax reform legislation in the New Year – as Obama himself seemed to acknowledge Monday when he said he’s intent on “doing some more work to reform our tax code so that wealthy individuals, the biggest corporations can’t take advantage of loopholes and deductions… that aren’t available to most Americans. So there’s still more work to be done in the tax code to make it fair….”

The indecision over taxes, spending, and borrowing has become chronic, in part a reflection of the fact that neither party controls both the executive and legislative branches. Ever since the Republicans won the House in 2010, the intermittent rounds of bargaining between GOP congressional leaders and Obama have run aground over the fundamentals: the future cost of the entitlement programs — especially Medicare — and who should bear the burden of paying for their growth.

The two sides’ clashing definitions of “fairness” make it hard for them to decide who should be paying a bigger tax bill.

And while tax revenues have been increasing – they’re up 10 percent in the first two months of fiscal year 2013 even under the current tax law — the increase, even if it is sustained, won’t be enough to pay for future benefits that have been promised.

Domestic spending in the cross-hairs
As part of an accord with GOP leaders last year to raise the government’s borrowing limit, Obama signed the Budget Control Act. The law requires about $100 billion in spending reductions in 2013, out of a total of roughly $3.5 trillion in spending.

While an approximately 3 percent cut in spending might not seem drastic, the Budget Control Act exempts most entitlement spending from the cuts, so the reductions would be concentrated on military outlays and domestic discretionary spending programs ranging from air traffic control to immigration enforcement.

h/t: NBCpolitics.com

Fox News host Steve Doocy misrepresented President Obama’s proposal to avoid the possibility of a federal government default on its financial obligations in order to claim that the president has proposed changing the Constitution.

Treasury Secretary Tim Geithner proposed that Congress should pass a law giving the president authority to avoid default by raising the ceiling on how much the federal government can borrow. Under the proposal, the president’s authority would be subject to a vote of disapproval by Congress. Geithner’s proposal was based on an idea originally put forward by Senate Republican leader Mitch McConnell.

Geithner’s proposal is urgent because the federal government is expected to reach the debt ceiling early in 2013, meaning that if Congress does not act, the federal government will begin defaulting on some of its obligations for the first time in history.

On the December 7 edition of Fox News’ Fox & Friends, Doocy interviewed Republican Sen. John Thune (SD) and opined that it was “good news for the Republicans” that there would soon be a fight between Obama and congressional Republicans over the federal debt ceiling because Republicans would “obviously have the upper hand on that.” Thune responded in part by saying that “what we’re told is the president is even thinking about what he might be able to do to raise the debt ceiling without going through Congress, which would be a huge mistake and ought to be unconstitutional.”

Rather than amend the Constitution or change the way it has been interpreted, Obama has proposed legislation that would amend the current statute that puts a limit on the federal government’s borrowing.

The debt ceiling is merely a provision of law passed by Congress, which can be amended or repealed at any time through ordinary legislation without any change to the Constitution. 

H/T: MMFA

The federal government’s ability to respond to natural disasters, like Hurricane Sandy currently bearing down on the East Coast, would be significantly hindered under a Romney-Ryan administration.

At least three times, Mitt Romney and Paul Ryan have publicly demanded that the federal government only disburse disaster relief funding if Congress agreed to offsetting budget cuts elsewhere. This would hold desperately-needed disaster relief funding hostage unless Congress agreed to cuts elsewhere in the budget, an extraordinarily difficult prospect even in normal circumstances.

Though GOP Majority Leader Eric Cantor (R-VA) became the public face of such intransigence in the wake of natural disaster last year, Romney and Ryan have repeatedly made clear they agree with Cantor’s position.

Last year, after a major tornado and flood struck the United States, Romney was asked in a debate about federal disaster relief funding. Romney not only suggested shuttering FEMA and sending responsibility for disaster relief “back to the private sector,” but also said it would be “immoral” for the federal government to fund disaster relief efforts without cutting the budget elsewhere. “It makes no sense at all,” Romney concluded. 

Ryan’s 2012 budget took a similar approach to disaster funding. As The Hill noted in May 2012, Ryan’s budget called for any disaster relief funding to “be fully offset within the discretionary levels provided in this resolution.”

This is not a new position for Ryan. Long before he entered the political limelight, Ryan was still pushing a similar line on disaster funding. In a March 23, 2004 speech on the House floor, Ryan proposed that any emergency spending legislation, including disaster relief, be automatically offset by an “across-the-board” budget cut. 

h/t: Scott Keyes at Think Progress Elections

(via More Evidence That Romney-Ryan Medicaid Plain Is Its Most Radical | TPMDC)

A new study underscores the far-reaching consequences of Mitt Romney’s plan to slash Medicaid spending and the stark contrast between the Republican candidate and President Obama’s vision for the program.

The analysis (PDF), released Tuesday by the Urban Institute for the Kaiser Family Foundation, finds that a Medicaid program modeled on vice presidential nominee Paul Ryan’s budget blueprint, would slash the program’s funding by $1.7 trillion over 10 years.

Romney has announced his support for Ryan’s budget, and has proposed, like Ryan, to turn the program over to the states and to cap its annual spending.

The reforms would save $932 billion by repealing the Affordable Care Act’s Medicaid expansion, and an additional $810 billion by converting Medicaid into a block grant for states that grows annually at the rate of inflation plus 1 percent, the Urban Institute study found. Romney has cited it as one way he would seek to bridge the budget deficit.

By contrast, Obama’s plan under the Affordable Care Act would grow funding for Medicaid and expand eligibility to provide coverage to as many as 17 million more low-income Americans.

Reelecting Obama would continue the implementation of the Affordable Care Act and its Medicaid expansion. Romney’s plan to repeal the law and further reduce Medicaid’s finances, while giving states unprecedented flexibility to reorganize it, would save money by endangering coverage for millions of Americans, according to the study.

One day in March, 2009, two months after the Inauguration of President Obama, Representative Paul Ryan, of Wisconsin, sat behind a small table in a cramped meeting space in his Capitol Hill office. Hunched forward in his chair, he rattled off well-rehearsed critiques of the new President’s policies and America’s lurch toward a “European” style of government. Ryan’s father, grandfather, and great-grandfather all died before their sixtieth birthdays, so Ryan, who is now forty-two, could be forgiven if he seemed like a man in a hurry. Tall and wiry, with a puff of wavy dark hair, he is nearly as well known in Washington for his punishing early-morning workouts as he is for his mastery of the federal budget. Asked to explain his opposition to Obama’s newly released budget, he replied, “I don’t have that much time.”

Ryan won his seat in 1998, at the age of twenty-eight. Like many young conservatives, he is embarrassed by the Bush years. At the time, as a junior member with little clout, Ryan was a reliable Republican vote for policies that were key in causing enormous federal budget deficits: sweeping tax cuts, a costly prescription-drug entitlement for Medicare, two wars, the multibillion-dollar bank-bailout legislation known as TARP. In all, five trillion dollars was added to the national debt. In 2006 and 2008, many of Ryan’s older Republican colleagues were thrown out of office as a result of lobbying scandals and overspending. Ryan told me recently that, as a fiscal conservative, he was “miserable during the last majority” and is determined “to do everything I can to make sure I don’t feel that misery again.”

In 2009, Ryan was striving to reintroduce himself as someone true to his ideological roots and capable of reversing his party’s reputation for fiscal profligacy. A generation of Republican leaders was gone. Ryan had already jumped ahead of more senior colleagues to become the top Republican on the House Budget Committee, and it was his job to pick apart Obama’s tax and spending plans. At the table in his office, Ryan pointed out the gimmicks that Presidents use to hide costs and conceal policy details. He deconstructed Obama’s early health-care proposal and attacked his climate-change plan. Obama’s budget “makes our tax code much less competitive,” he said, as if reading from a script. “It makes it harder for businesses to survive in the global economy, for people to save for their own retirement, and it grows our debt tremendously.” He added, “It just takes the poor trajectory our country’s fiscal state is on and exacerbates it.”

As much as he relished the battle against Obama—“European,” he repeated, with some gusto—his real fight was for the ideological identity of the Republican Party, and with colleagues who were content to simply criticize the White House. “If you’re going to criticize, then you should propose,” he told me. A fault line divided the older and more cautious Republican leaders from the younger, more ideological members. Ryan was, and remains, the leader of the attack-and-propose faction.


In a 2005 speech to a group of Rand devotees called the Atlas Society, Ryan said that Rand was required reading for his office staff and interns. “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand,” he told the group. “The fight we are in here, make no mistake about it, is a fight of individualism versus collectivism.” To me he was careful to point out that he rejects Rand’s atheism.

Ryan’s first significant policy fight came in 2004. As President George W. Bush campaigned for a second term, largely emphasizing counter-terrorism and national-security policies, Ryan laid the groundwork for the Republican agenda should Bush be elected. For the first time, Ryan had the chance to pursue some of the more daring libertarian ideas that had captivated him. As a thirty-four-year-old representative, he set out to privatize Social Security.


Two days after the speech, despite some desperate appeals by Republican pollsters, Ryan’s plan passed the House of Representatives, 235 to 193. Only four Republicans voted against it. Ryan told me that the class of Republicans elected in 2010 was transformational. “Usually, you get local career politicians who want to be national career politicians,” he said. “They’re more cautious. They’re more risk-averse. They’re more focussed on just reëlection.” He went on, “This crop of people who came up are doctors and dentists and small-business people and roofers and D.A.s. They’re not here for careers—they’re here for causes.”

Ryan had aligned himself with Cantor and the self-proclaimed Young Guns, who made life miserable for Boehner, their nominal leader. They were the most enthusiastic supporters of the Ryan plan, while Boehner had publicly criticized it. Cantor’s aides quietly promoted stories about Boehner’s alleged squishiness on issues dear to conservatives, and encouraged Capitol Hill newspapers to consider the idea that Cantor would one day replace Boehner. As the Republican negotiations with the White House fizzled in the summer of 2011, Barry Jackson, Boehner’s chief of staff and a veteran of the Bush White House and Republican politics, blamed not just Cantor, who in media accounts of the failed deal often plays the role of villain, but Ryan as well.

H/T:  Ryan Lizza at The New Yorker 

Grover Norquist is the most tenacious anti-tax warrior in the conservative movement. No lobbyist whips Republican elected officials into line as effectively. Privately, both Republicans and Democrats admit that his Taxpayer Protection Pledge is the single biggest obstacle to effective governing in Washington.

But as frustration over congressional gridlock gives way to panic over fiscal armageddon in January, more and more Republicans are publicly breaking ranks with the anti-tax movement and publicly disavowing their pledge never to raise a cent of new revenue. At the same time, Norquist can boast accurately that despite deadly politics, and dangerous legislative brinksmanship, Republicans haven’t yielded — and thus 2011 passed with zero dollars in new tax revenue paired with trillions of dollars of cuts to federal programs.

Which raises a natural question: Is Republican commitment to Grover’s cause so deep that they’d rather plummet the country to the bottom of the fiscal cliff than allow taxes to rise, or will they hit the brakes and throw Grover over the edge instead?

Several days ago, multiple Democratic sources alerted me and other reporters to an event House Republicans — conservatives and tax bill writers — had planned for Thursday in the Longworth House Office Building with the man himself. He was invited to answer questions about the pledge nearly every member of the conference had signed. If the pledge is as straightforward as Grover insists, his visit suggests some Republicans are seeking flexibility ahead of the rough fight awaiting them at the end of the year.

“I understand that Mr. Norquist is going to come up here and he’ll have a conversation about [the pledge],” admitted House Speaker John Boehner. “I’ve been around the political process for a long time. I’ve never voted to raise taxes. But we’ve got a big job to do. I’m not interested in raising taxes. But they can discuss whether loophole closings are tax increases — I hope they resolve it all actually.”

Norquist is a human fountain of self-ratification. The only assumptions he entertains have his movement in ascent. He interprets all events as validations of his team’s worldview. That means means all Democratic woes can be traced back to his pet issue.

“Nancy Pelosi lost her majority in the House because she wanted to raise taxes to pay for Obama’s big government and she made her congressmen vote for that,” he said. “That’s not a PR problem — that’s a political disaster for the Democrats. On the Senate side they lost a great deal of Senate seats, and they’re about to lose more going in this next election because they’re the party of higher taxes to pay for bigger, unreformed government.”

h/t: Brian Beutler at TPM

Via The Hill, Democratic Rep. Jan Schakowsky of Illinois last week turned the Republicans’ love of citing the Bible against them in some clever Passover-inspired jujitsu:

Schakowsky noted that at Seder, the feast marking the beginning of the Jewish holiday Passover, the youngest person asks four questions in an effort to understand the holiday. In keeping with that format, Schakowsky suggested four questions that could be asked of Republicans to describe their budget.

See, it’s not just Republicans and conservatives who can quote Biblical passages for the “authority” to hate gay people, deny health care to women, or give tax cuts to the rich. Democrats can play that game too:

First, Schakowsky suggested asking Republicans, “Why does your budget resolution protect and indeed increase the wealth of the already wealthy at the expense of everyone else?” She then implied that the GOP budget goes against Proverbs 22:16, which says, “He who oppresses the poor to increase his wealth and he who gives gifts to the rich — both come to poverty.” […]

Secondly, Schakowsky asked, “Why does your budget resolution take away the Medicare guarantee?” and then quoted Leviticus 19:32, “You shall give due honor and respect to the elderly.”

She said Republicans failed to live up to that passage by proposing $810 billion in cuts to Medicaid over the next decade.

Thirdly, she asked, “Why does your budget resolution increase defense spending while cutting investments in our children and families?” Here, she relied on Proverbs 16:11, “A just balance and scales are the Lord’s.” […]

And last, she asked, “Why does your budget resolution take away food from the poor?” To back up this question, she quoted 1 John 3:17 18, which states, “If anyone has material possessions and sees his brother in need but has no pity on him, how can the love of God be in him? Dear children, let us not love with words or tongue but with actions and in truth.”

Schakowsky isn’t alone, of course, in suggesting that the Republican budget does not comply with Biblical law. In March, the United States Conference of Catholic Bishops called on Congress to pass a budget that addresses “the needs of the hungry, the homeless and the unemployed first” and “reflect[s] the shared responsibility of government and other institutions to promote the common good of all, especially ‘workers and families who struggle to live in dignity in difficult economic times.’”

It is utterly absurd to suggest that our government should be writing its laws according to religious doctrine. We’re not a theocracy, after all, no matter how much conservatives love the idea of Christian Sharia. But if that’s the game Republicans want to play, picking and choosing their favorite portions of the Bible to support their agenda, Democrats should follow Schakowsky’s lead to show that two can play that game.

Jan Schakowsky’s right.

h/t: Kaili Joy Gray at Daily Kos