Democrats & Liberals Archives

Unity Of Purpose

Now, some may gloat over President Bush’s conciliatory tone and modest bi-partisan agenda presented in this year’s State of the Union address. The cynical will point to his low poll numbers, failed initiatives, and self-centered concern for his legacy as the reason, but I will not engage in that debate (today). Others can quibble over the veracity of President Bush’s description of his current policies, but I want to focus on his initiatives.

President Bush asked for a line item veto. The next time Bush vetoes a GOP pork-stuffed bill, it'll be the first time, but I think this is a great idea. If a Congressperson can't muster a two-thirds vote to override a veto of his bridge to nowhere, then maybe it's not such a good idea.

President Bush asked for a bi-partisan commission on Social Security. Let's make sure we get behind this one. The President's initiative failed because it was a bad idea. There are plenty of interesting ideas out there from raising taxes on high wage earners to cutting benefits to even doing nothing -- the new commission's studies may show that current dire figures are based on ultra-conservative economic growth expectations. A guest worker program and/or a strong economy may make Social Security's solvency problem disappear.

Speaking of which, President Bush proposed a guest worker program in conjunction with tighter border security. In addition to making immigrant wages taxable, a guest worker program would also give immigrant workers legal recourse against abusive employers and sweat-shop slavers, and strengthen the wages and benefits of American workers. Democrats should support this.

President Bush wants to modernize health information technology. This was a cornerstone of John Kerry's health care plan and could end up cutting health care costs in half as well as saving lives. This should be a bi-partisan no-brainer.

President Bush proposed initiatives designed to cut our dependence on Middle Eastern oil by 75% by 2025. I think he's being a bit pessimistic; America can do better. But what the heck -- he's offering, let's make him stick to it.

President Bush says he'll double investment in federal R&D and put 100,000 more AP, math, and science teachers in our public high schools. Let's make sure that happens.

The big question, of course, is how we will pay for all these vital initiatives. We must not borrow the money and put the country deeper in debt. One solution popped into my mind immediately (guess what it is). Perhaps President Bush has a different solution that he neglected to mention.

Either way, these are proposals that Democrats should welcome, and we should work with the President to make sure they're successful (as long as Republicans don't load them down with more tax cuts for the rich, gay marriage amendments, riders to destroy Social Security and Medicare, pointless drilling in the ANWR, appointing more wacko activist judges, etc., etc.).

Posted by American Pundit at February 2, 2006 3:16 AM
Comments
Comment #119460

Haven’t been reading the news lately, eh, AP?


Administration backs off Bush’s vow to reduce Mideast oil imports
By Kevin G. Hall
Knight Ridder Newspapers

WASHINGTON - One day after President Bush vowed to reduce America’s dependence on Middle East oil by cutting imports from there 75 percent by 2025, his energy secretary and national economic adviser said Wednesday that the president didn’t mean it literally.


Posted by: Aldous at February 2, 2006 5:56 AM
Comment #119470

I don’t think much of a line item veto. It’s purpose can be effected by the threat of a veto if certain provisions stay in. If you need to cover your political butt, if that is so important, then you can go and make a statement where you deride congress for taking advantage of the sentiments of the voters to push pork and other crap.

I’m not even sure its constitutional, or that it should be for that matter. While it gives the president the power to remove obnoxious clauses, it also gives him the power to gut whatever legislation he doesn’t like, effectively making law. It’s bad enough that this president makes signing statements about how he’s going to enforce the law, and then expects them to be legally binding. In Bush’s hands, this would be a tool for far more excessive executive power.

Posted by: Stephen Daugherty at February 2, 2006 7:22 AM
Comment #119478

AP

Oh happy Day!Oh happy day!The erudite AP actually calls for the democratic party to actually work with the president to get something done!

It IS the water in Singapore!

Oh happy day!

Posted by: sicilianeagle at February 2, 2006 7:49 AM
Comment #119485

Hah! SE, the GOP doesn’t need the Democrats to get things done. They control every aspect of the government. I’m just hoping President Bush will keep his word and “do his part” to include us.

To judge by Jack’s little “Killing The Patriot Act” attacklet ((c) American Pundit, 2006), things don’t look promising.

Administration backs off Bush’s vow to reduce Mideast oil imports …the president didn’t mean it literally

Crap. Well, that doesn’t mean it’s not a good idea, it just means president Bush has problems implementing good ideas. Maybe he’ll do better on the others…

That’s odd though. President bush said, “Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.”

How else could you possibly interpret that statement other than “literally”? Is it a figure of speech? An allegory? A parable? Satire? Comedic license?

Posted by: American Pundit at February 2, 2006 8:07 AM
Comment #119494

‘Hah! SE, the GOP doesn’t need the Democrats to get things done. They control every aspect of the government. ….’

Posted by: American Pundit at February 2, 2006 08:07 AM

Yes.
They do.

Posted by: dawn at February 2, 2006 8:30 AM
Comment #119504

(humor only)

This year, Groundhog Day and the State of the Union Address fall in the same week. It is an ironic juxtaposition: one involves a meaningless ritual in which we look to a creature of little intelligence for prognostication, and the other involves a groundhog.

Posted by: tony at February 2, 2006 8:50 AM
Comment #119507

http://www.realcities.com/mld/krwashington/13767738.htm

(to help further Aldous’ point.)

“We’re addicted to Oil.”

Yea, my crack dealer users the same logic…

Posted by: tony at February 2, 2006 8:55 AM
Comment #119508

Hah! SE, the GOP doesn⦣x20AC;™t need the Democrats to get things done. They control every aspect of the government. ….’

Posted by: American Pundit at February 2, 2006 08:07 AM

Yes.
They do.

Posted by: dawn at February 2, 2006 08:30 AM


Yup. Which means its all the Republicans fault!!!

Posted by: Aldous at February 2, 2006 8:58 AM
Comment #119512

‘Yup. Which means its all the Republicans fault!!!’

Posted by: Aldous at February 2, 2006 08:58 AM


That was helpful.

Posted by: dawn at February 2, 2006 9:05 AM
Comment #119513

While I agree that it is important to stop the practice of earmarking, a line item veto would not be a good solution.

The president would use the line item veto to enforce party loyalty. Members of congress loyal to Bush would have thier earmarks quietly slip through while those who questioned him would have thier earmarks vetoed.

Posted by: montanademocrat at February 2, 2006 9:10 AM
Comment #119514
That was helpful.

Dawn, in a sense Aldous is right. Excepting a filibuster — which Democrats haven’t seriously attempted — the Republicans can write and pass any legislation they want and know that President Bush will sign it and the Supreme Court will approve it.

Now that some traditional conservative Republican legislators are starting to balk at the wacko stuff the GOP leadership is up to, the Republican Party may have to start making deals — hence the conciliatory tone and the palatable initiatives in the SOTU.

Some of those initiatives are good. I say we take advantage of the situation to work together and get ‘em done.

Posted by: American Pundit at February 2, 2006 9:19 AM
Comment #119526

Fat chance that will happen, AP. The only GOP Senator with any kind of free will is McCain and his group. Hell, the only reason Abramov was arrested at all is cause McCain was incharge of the Indian Affairs Committee. Any other Senator would let him escape.

Posted by: Aldous at February 2, 2006 9:36 AM
Comment #119527

AP

Entitlements are the 500 pound gorrilla…..eagle food and housing is expensive you know.
Bush’s program will try to do it by raising the retirement age,which I don’t mind.
What he has to do is get the federal bueracrats in line with wastful retirement packages into line with normal retirement benefits.

Interesting but that tax cut yielded 880 billion in tax revenue last year according to the president last year.

Posted by: sicilianeagle at February 2, 2006 9:38 AM
Comment #119535
Bush’s program will try to do it by raising the retirement age,which I don’t mind.

I’m guessing you don’t build roads, houses, skyscrapers, or dig ditches or mop floors for a living, do you SE.

The retirement age is already scheduled to increase to 67. What sounds like a reasonable upper age for mining coal to you?

Posted by: American Pundit at February 2, 2006 9:48 AM
Comment #119539

But as I mentioned, let’s get President Bush’s proposed bi-partisan SS commission going. I’ll bet a dollar of my retirement fund that no action needs to be taken at all. The “bankruptcy” date gets pushed back further and further every year because it’s based on very conservative economic growth etimates. It was 2030 back in 1999, now it’s 2042-3 or something like that.

Posted by: American Pundit at February 2, 2006 9:52 AM
Comment #119540

I think the issue is typified by the ‘up or down vote.’ The REPs love to sound so noble by posturing for ‘a simple up or down vote.’ They know they have the votes to win, so the statement is really - ‘DEMs, stop getting in the way and let us run the country as we see fit.’

What I find amazing is how little has been done, and the complete lack of obvious successes over the past several years. REPs have had absolutely no impediment to their whims excepts a bizarre lack of follow through. Even the Medicare part D - which was a known element, failed completely in it’s implementation.

REPs love to hound DEMs for doing nothing but complain. REPs have done simply nothing but fail. I guess maybe the minority party should been seen and not heard…???

Posted by: tony at February 2, 2006 9:53 AM
Comment #119544

“The retirement age is already scheduled to increase to 67. What sounds like a reasonable upper age for mining coal to you?”

I see your point - but how many coal miners actually make it to retirement age these days. (Guess it’s another side of the windfall to the Coal Industry - it helps to have friends in high places.)

Posted by: tony at February 2, 2006 9:57 AM
Comment #119548

SE,

“Interesting but that tax cut yielded 880 billion in tax revenue last year according to the president last year.”

And last year was the first time since the depression that folks puled more money out of their savings than they put in.

Posted by: Rocky at February 2, 2006 10:02 AM
Comment #119550

Yeah, actually SE, if you could provide some proof of a cause and effect with the tax cuts and increased revenue, it would strengthen your argument. Personally I attribute the increased revenue to the inherent strength of the American economy despite what President Bush has done to it.

In any case, we’re still running record deficits and that’s the whole point of tax revenue — to cover expenditures. President Bush has yet to do that like President Clinton did.

Posted by: American Pundit at February 2, 2006 10:10 AM
Comment #119553

Ha Ha Ha Ha Ha!! I swear you can’t make this up!!!


The Energy Department will begin laying off researchers at the National Renewable Energy Laboratory in the next week or two because of cuts to its budget.

A veteran researcher said the staff had been told that the cuts would be concentrated among researchers in wind and biomass, which includes ethanol. Those are two of the technologies that Mr. Bush cited on Tuesday night as holding the promise to replace part of the nation’s oil imports.


So much for ethanol, eh?

Posted by: Aldous at February 2, 2006 10:15 AM
Comment #119557

Personally I hate hearding the words : Commision, committes, and investigate.

All they actually amount to is adding more people on to the governmental payroll, who will take a minumn of 2 years to come back, print a book, that no one reads.

Posted by: Linda H. at February 2, 2006 10:24 AM
Comment #119560
All they actually amount to is adding more people on to the governmental payroll, who will take a minumn of 2 years to come back, print a book, that no one reads.

Why are Republicans always so pessimistic? And wrong?

The bi-partisan 9/11 Commission report triggered the most sweeping reorganization of intelligence agencies in history, and the book was a best-seller. I, and millions of other Americans who believe an informed electorate is vital to our way of life, read it.

I think a bi-partisan commission on Social Security could do just as good of a job.

Posted by: American Pundit at February 2, 2006 10:33 AM
Comment #119561

Ap

First off,we live far longer now that 6 decades ago.
People in their 60’s today are like those in their 40’s or 50 back then.

Second,right now if a retirree does work past his quota,he pays a dollar for dollar tax,do that limit has to be raised.

Third,when we go to the gas pump.let’s see exactly where that gas comes from.

Sunoco from Saudia Arabia?Ok,have a war tax on that oil…raise it to 7 bucks a gallon.

Texaco from Texas?ok,raise it to 6 bucks a gallon with an extra buck earmarked for alternative fuel research.

Ler Americans decide.

Want to go and buy that 10,000 Chinese import?No problem.Figure out how many hours it took o make it,and tax it to our hourly standards…earmark that money to re-train and research cheaper alternatives.

Most important……get a moderate Democrat and Republician constituenty going here…in other words,saw off the lunitic left AND right and have a majority of folks who want to do something do something.

Posted by: sicilianeagle at February 2, 2006 10:36 AM
Comment #119569

AP,

Usually, when I read your comments, I completely disagree.

But there is a first time for everything…and this is that time.

In a view of your post from right of center, I can find very little to disagree with.

Bush’s promise in 2000 was to be a uniter of Dems and Reps. If (IF) he really means what he has said in the SOTU speech, it has been 5 years (far too long) since that promise was made…and it’s about time he made good on it.

I think it is our duty (!!!) to ding-dong our Congressmen and Senators, Dem and Rep, EVERY SINGLE DAY to get these initiatives moved to the forefront…and not be forgotten and pushed aside by partisan politics. We need to hold their feet to the fire and threaten them with being voted out of office (as is promoted in the Indy column) if they don’t act in a bipartisan manner on the initiatives that were proposed.

Why?

Because We The People need and deserve them.

Any left of center Dem want to work with me?

Posted by: Jim T at February 2, 2006 11:16 AM
Comment #119578

Jim T -

Sounds good to me.

Posted by: tony at February 2, 2006 11:56 AM
Comment #119604

Jim, tony,

Unfortunately, as long as it is only $$$ that talks in DC then “ding-dong” will only be a junk food.

Posted by: Dave at February 2, 2006 12:31 PM
Comment #119621

Didn’t Clinton have the line item veto? Wasn’t it ruled unconstitutional by the SCOTUS? Better than the line item veto, anyway, is the one purpose per bill.

Either way, these are proposals that Democrats should welcome, and we should work with the President to make sure they’re successful (as long as Republicans don’t load them down with more tax cuts for the rich, gay marriage amendments, riders to destroy Social Security and Medicare, pointless drilling in the ANWR, appointing more wacko activist judges, etc., etc.).

AP,

Actually, Democrats have been welcoming these proposals for some time now, since they are based on proposals introduced by them[1]. Senate Democrats propose energy independence by 2025, while the House Democrats propose a more ambitious Apollo-type plan of energy independence in 10 years. It is actually the Republicans that need to work with the Democrats to make sure they’re successful.

Some believe that Democrats offered no alternatives to Bush’s SS plan, not so. Democratic President Clinton proposed using the budget surplus for SS, before leaving office. Republicans killed that plan, without offering anything on SS for 4 years, then all of a sudden it was a priority?
Democratic Rep Robert Wexler introduced the Social Security Forever Act of 2005.

[1]See:
New Apollo Energy Act of 2005 Introduced by Rep Jay Inslee [D-WA]

Clean Alternatives for Energy Independence Act of 2005 Introduced by Rep Mark R. Kennedy [R-MN] and Rep Mark Udall [D-CO].

To provide for the establishment of the Advanced Research Projects Agency-Energy Introduced by Rep. Bart Gordon [D-TN]

20/20 Biofuels Challenge Act of 2005 Introduced by Sen Maria Cantwell [D-WA]

Biofuels Energy Independence Act of 2005 Introduced by Rep Marcy Kaptur [D-OH]

Methane Hydrate Research and Development Reauthorization Act of 2005 Introduced by Sen Daniel K. Akaka [D-HI]

Fuels Security Act of 2005 Introduced by Rep Stephanie Herseth [D-SD]

Fuels Security Act of 2005 Introduced by Sen Frank R. Lautenberg [D-NJ]

Securing Transportation Energy Efficiency for Tomorrow Act of 2005 Introduced by Rep. James L. Oberstar [D-MN]

THE INNOVATION AGENDA


Posted by: JayJay Snowman at February 2, 2006 12:56 PM
Comment #119635

Sorry, some of the links above didn’t work, here they are again.

[1]See:
Apollo Energy Act of 2005 Introduced by Rep Jay Inslee [D-WA]

Alternatives for Energy Independence Act of 2005 Introduced by Rep Mark R. Kennedy [R-MN] and Rep Mark Udall [D-CO].

provide for the establishment of the Advanced Research Projects Agency-Energy Introduced by Rep. Bart Gordon [D-TN]

20/20 Biofuels Challenge Act of 2005 Introduced by Sen Maria Cantwell [D-WA]

Biofuels Energy Independence Act of 2005 Introduced by Rep Marcy Kaptur [D-OH]

Methane Hydrate Research and Development Reauthorization Act of 2005 Introduced by Sen Daniel K. Akaka [D-HI]

Fuels Security Act of 2005 Introduced by Rep Stephanie Herseth [D-SD]

Fuels Security Act of 2005 Introduced by Sen Frank R. Lautenberg [D-NJ]

Transportation Energy Efficiency for Tomorrow Act of 2005 Introduced by Rep. James L. Oberstar [D-MN]

THE INNOVATION AGENDA

Posted by: JayJay Snowman at February 2, 2006 1:17 PM
Comment #119673

—-
It’s an election year, so Bush is making proposals that will not get anywhere, so he can claim that the democrats obstructed all his wonderful proposals. If it doesn’t work, I suspect he will pull out of Iraq, or claim that he will pull out, just before the election.

A line item veto has always been a DOA proposal. You would be eliminating support from the reps whose appropriations you are vetoing. The only way it could work politically is if only opposition reps items were vetoed. That would not produce very much in cuts, because the Bush supporters like plenty of pork for themselves.

Social security has already become a disaster. Most people begin having significant health problems around age 50, limiting their ability to continue working as much as they did earlier in their lives. I don’t know where anyone is getting the idea that the retirement age is 67. We expect people to work until 70 now, unless they have independent resources, before they get full benefits. Bushco does not acknowledge the fact that people have financial reverses in their lives, like Enron stockholders, and require old age insurance provided by a government that is not bankrupt. The purpose of a commission is to delay doing anything, and pass the buck to the next administration.

If a Democratic president advocated a guest worker program, the Rpblcns would be jumping all over him. It seems like a measure that would institutionalize second class noncitizens.

Modernizing health care information technology, Bush probably does not know what that means. It sounds like something that was put into his speech as filler, since he really had nothing to say except WAR IS FREEDOM.

The oil dependence part of the SOTU is the part that makes me laugh out loud. We needed to take those measures in the 1980s, now its 2006 and the people who obstructed energy conversation are telling us its time for alternatives. Maybe the solution is more good coal mining jobs. An oil tanker just ran aground in Alaska a little while ago , see
http://news.bbc.co.uk/2/hi/americas/4675372.stm and we have a toxic cloud today near where I grew up.

Bush has also just discovered that we need more math and science teachers. He must have been in an alcohol or drug haze for the last ten years.
It’s just another filler item that he will never go anywhere.

Bush does not like taxes, he believes in voodoo economics, so nothing that he proposes will be paid for with anything except increased deficit spending.
—-

Posted by: ray ohrealy at February 2, 2006 2:25 PM
Comment #119705

IGNORANCE IS STRENGTH!

Posted by: Dave at February 2, 2006 3:13 PM
Comment #119707

Spot on, ray.

Posted by: Adrienne at February 2, 2006 3:19 PM
Comment #119778

I think we’re all on the same page here, today, for a change. Even the intelligent right have joined in with reasonable ideas. God bless us everyone!
All of us who have been paying attention over the last ten years know we need to rid ourselves of oil dependency.
We also have known, for longer than that, we need to do something about our educational system, besides just talking about it.
And, at least some of us have thought, since the outset, the tax cuts did nothing for those earning below 100,000.
The health industry requires a whole revision and it needs someone other than whomever came up with the prescription drug plot(did I say that?) to come up with a workable plan.
JP

Posted by: jcp at February 2, 2006 6:05 PM
Comment #119804

JP -

I love the idea of ridding ourselves of Oil Dependency - but it seems that it was rhetoric not substance delivered in the SOTU speech. It would take an awfullt big man to give up his families wealth-line for the benefit of his country. I don’t think he will measure up at all.

Posted by: tony at February 2, 2006 8:29 PM
Comment #119844

Republicans ARE jumping all over Pres. Bush for a guest worker program. Republicans don’t just go along for the ride because are leaders say “get in”. dems could take a lesson and not follow so close to Keg Kennedy! You might find yourself in deep water!

Posted by: William at February 2, 2006 10:36 PM
Comment #119923


William,
Actually “Keg” Kennedy has some ideas:
http://news.yahoo.com/s/huffpost/20060201/cm_huffpost/014925;_ylt=AqXQjyPE32.YkiTmsR.5cYEd6sgF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA—

I don’t even agree with them all, but they’re not without some merit. Change is needed even according to Bush. A wise person reads the menu before ordering.
KansasDem

Posted by: KansasDem at February 3, 2006 2:48 AM
Comment #119989

I personally was offended by many of Bush’s calls for UNITY, implying that the Democrats were the ones not playing ball.

What a CROCK!!!!

From DAY ONE, Bush and the PARTY IN POWER have treated the Democrats as LOSERS, unworthy of any input. In the House, leaders like Hastert, Sennsenbrenner (sp?), and other chairmen have denied Democrats the right to subpeona witnesses on important investigations, the right to hold hearings on relevant and important subjects. The majority Republican Congress, Bush, and Cheney have treated the Democrats as persona non grata. Even prior to Bush’s take over of the Executive Branch, when Clinton was President, the Republican Senate railroaded or stalled out HUNDREDS of Clinton’s nominees for judicial appointments. They were waiting for their turn.

To call for unity at this point in the Republican dictatorship is a JOKE.

Bush Co. has NO credibility with me and many other reasonable Democrats. I won’t even get into my perceptions of Cheney other than to say that he is the closest thing this country has ever had to… well, if I use the analogies that I was thinking of, I would be considered off the wall. Let’s just say the world has seen its share of leaders who KNOW what is right for their country and who brook no opposition and who are willing to disregard the rights of the opposition. Cheney, in another place and time, would be a very, very … well, let’s just say he’s scary as he&&.

The Republicans will cry like little girls (just like the guard in the Shawshank Redemption) when the Democrats take back Congress. And I suppose one of us will have to act like grown ups and I hope it is the Democratic Party.

But I swear by all that’s holy, I hope the Republicans hold on to Congress and the White House. I think the only way to rid ourselves of this Ayn Rand/Elmer Gantry ideology is to let America take a HUGE dose of what the Republicans are serving up. People like my family are so pro-Republican, yet they are so ill-informed and can hold no reasonable discussion of ISSUES. They vote soley on Mom and Apple Pie rhetoric. They need the castor oil of many years of Republican policies to cure them of this fantasy in which they live.

Posted by: LibRick at February 3, 2006 7:23 AM
Comment #120008
Republicans ARE jumping all over Pres. Bush for a guest worker program. Republicans don’t just go along for the ride because are leaders say “get in”. dems could take a lesson and not follow so close to Keg Kennedy! You might find yourself in deep water! Posted by: William at February 2, 2006 10:36 PM
That must be what Comedy Central would sound like if run by wingnuts with Ann Cunter I mean Coulter at the desk. Can we say “LSD” and “BiPolar Disorder”?


Librick,

Yup, I know how you feel.

Posted by: Dave at February 3, 2006 8:50 AM
Comment #120041
Any left of center Dem want to work with me?

Like President Bush said, “I will do my part.”

ray and Adrienne, don’t be so pessimistic. Sure, President Bush already backed out on two of the initiatives he told us were absolutely vital to America’s future, and Republicans will never let him pass a guest worker program, but there’re still health care modernization, education, and the bi-partisan Social Security commission. That last one, at least, should get done. It doesn’t cost anything to set up a commission. :)

Actually, Democrats have been welcoming these proposals for some time now, since they are based on proposals introduced by them.

Right, JayJay. That’s what I’m sayin’. Let’s take him up on it before he changes his mind.

Posted by: American Pundit at February 3, 2006 10:50 AM
Comment #120052
From DAY ONE, Bush and the PARTY IN POWER have treated the Democrats as LOSERS, unworthy of any input.

Maybe if they’d come up wuth ideas insted of just ashing everything they;d be listened too. Then again maybe not. But they have to have ideas to be heard. And I don’t see them coming up with any.

Posted by: Ron Brown at February 3, 2006 12:10 PM
Comment #120095
Then again maybe not. But they have to have ideas to be heard. And I don’t see them coming up with any.

Ron,

In order to be heard, someone has to be listening. You, obviously are not. The Dems have put forth lots of ideas, some that the President touched on in his SOTU speech. Maybe you need to get your talking points from somewhere other than the right wingnuts on conservative talk radio.

Posted by: JayJay Snowman at February 3, 2006 1:59 PM
Comment #120168

AP,

“Yeah, actually SE, if you could provide some proof of a cause and effect with the tax cuts and increased revenue, it would strengthen your argument.”

Below are two anecdotal proofs for you. The first is fairly short I will let you pull it up yourself. The second is quite a bit longer so I have excerted portions. I have also included the link if you would like to look further at the impact of reductions in Capital Gains and Flat Taxes.

House Joint Economic Committee

The Reagan Tax Cuts: Lessons for Tax Reform 1996

http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm


The Laffer Curve: Past, Present, and Future
by Arthur B. Laffer

http://www.heritage.org/Research/Taxes/bg1765.cfm

The Harding-Coolidge Tax Cuts

In 1913, the federal progressive income tax was put into place with a top marginal rate of 7 percent. Thanks in part to World War I, this tax rate was quickly increased significantly and peaked at 77 percent in 1918. Then, through a series of tax-rate reductions, the Harding-Coolidge tax cuts dropped the top personal marginal income tax rate to 25 percent in 1925.

Although tax collection data for the National Income and Product Accounts (from the U.S. Bureau of Economic Analysis) do not exist for the 1920s, we do have total federal receipts from the U.S. budget tables. During the four years prior to 1925 (the year that the tax cut was fully implemented), inflation-adjusted revenues declined by an average of 9.2 percent per year (See Table 1). Over the four years following the tax-rate cuts, revenues remained volatile but averaged an inflation-adjusted gain of 0.1 percent per year. The economy responded strongly to the tax cuts, with output nearly doubling and unemployment falling sharply.

The Kennedy Tax Cuts

During the Depression and World War II, the top marginal income tax rate rose steadily, peaking at an incredible 94 percent in 1944 and 1945. The rate remained above 90 percent well into President John F. Kennedy’s term. Kennedy’s fiscal policy stance made it clear that he believed in pro-growth, supply-side tax measures:

President Kennedy proposed massive tax-rate reductions, which were passed by Congress and became law after he was assassinated. The 1964 tax cut reduced the top marginal personal income tax rate from 91 percent to 70 percent by 1965. The cut reduced lower-bracket rates as well. In the four years prior to the 1965 tax-rate cuts, federal government income tax revenue—adjusted for inflation—increased at an average annual rate of 2.1 percent, while total government income tax revenue (federal plus state and local) increased by 2.6 percent per year (See Table 4). In the four years following the tax cut, federal government income tax revenue increased by 8.6 percent annually and total government income tax revenue increased by 9.0 percent annually. Government income tax revenue not only increased in the years following the tax cut, it increased at a much faster rate.

The Reagan Tax Cuts

In August 1981, President Reagan signed into law the Economic Recovery Tax Act (ERTA, also known as the Kemp-Roth Tax Cut). The ERTA slashed marginal earned income tax rates by 25 percent across the board over a three-year period. The highest marginal tax rate on unearned income dropped to 50 percent from 70 percent (as a result of the Broadhead Amendment), and the tax rate on capital gains also fell immediately from 28 percent to 20 percent. Five percentage points of the 25 percent cut went into effect on October 1, 1981. An additional 10 percentage points of the cut then went into effect on July 1, 1982. The final 10 percentage points of the cut began on July 1, 1983.

These across-the-board marginal tax-rate cuts resulted in higher incentives to work, produce, and invest, and the economy responded (See Table 7). Between 1978 and 1982, the economy grew at a 0.9 percent annual rate in real terms, but from 1983 to 1986 this annual growth rate increased to 4.8 percent.

Prior to the tax cut, the economy was choking on high inflation, high interest rates, and high unemployment. All three of these economic bellwethers dropped sharply after the tax cuts. The unemployment rate, which peaked at 9.7 percent in 1982, began a steady decline, reaching 7.0 percent by 1986 and 5.3 percent when Reagan left office in January 1989.

Inflation-adjusted revenue growth dramatically improved. Over the four years prior to 1983, federal income tax revenue declined at an average rate of 2.8 percent per year, and total government income tax revenue declined at an annual rate of 2.6 percent. Between 1983 and 1986, federal income tax revenue increased by 2.7 percent annually, and total government income tax revenue increased by 3.5 percent annually.

The most controversial portion of Reagan’s tax revolution was reducing the highest marginal income tax rate from 70 percent (when he took office in 1981) to 28 percent in 1988. However, Internal Revenue Service data reveal that tax collections from the wealthy, as measured by personal income taxes paid by top percentile earners, increased between 1980 and 1988—despite significantly lower tax rates


Posted by: Kirk at February 3, 2006 4:32 PM
Comment #120228

As I noticed someone else say, you just can’t make this stuff up, quoting Congressman Joe Barton:
“America runs on energy that is both abundant and available at prices we can afford to pay.”

from his own comments on the SOTU address:
http://joebarton.house.gov/news.asp?FormMode=Detail&ID=323

Maybe our Congressmen are overpaid. I’ve actually compared my latest utility and heating bills against last February’s. The electric rate here is up nearly 30%. Natural gas is up more than 50%. Obviously the “we” he refers to doesn’t include me.

KansasDem

Posted by: KansasDem at February 3, 2006 7:19 PM
Comment #120248

Did I once again hear Bush call for making the tax cuts permanent citing “job growth”:

http://www.epi.org/content.cfm/webfeatures_snapshots_20060126

If this is right, just who will the owners be in Bush’s “ownership society?
KansasDem

Posted by: KansasDem at February 3, 2006 8:07 PM
Comment #120334

Kirk, the Laffer curve is a tool to calculate the optimum level of taxation to maximize revenue.

Your empirical evidence from the Heritage Foundation right wing think tank concludes the optimal tax rate on the highest income earners is 28%, others say the optimal tax rate for these wealthy elite is 70%.

It all depends on which numbers you plug into the equation.

In fact, here’s a Congressional Budget Office study from last year that says over a ten year period the government will only recoup 28% of revenue lost after a 10% tax cut.

It’s by no means clear — or even likely — that President Bush’s tax cuts are responsible for any increase in revenue.

Posted by: American Pundit at February 3, 2006 11:37 PM
Comment #120340

JayJay
I don’t listen to yak radio.

Posted by: Ron Brown at February 3, 2006 11:58 PM
Comment #120355

You get the point though, right Ron? Democrats have ideas, alternatives, and constructive criticism up the wazoo. Saying Democrats don’t have any ideas is like saying Sen. Kennedy suffers from excessive sobriety.

Posted by: American Pundit at February 4, 2006 12:37 AM
Comment #120396

AP,

So, I guess the fact that tax revenues increased dramatically, unemployment fell and the economy in general rebounded following each of the major tax cuts in the 20-century was sheer coincidence.

From the House Joint Economic Committee document;

The economic benefits of ERTA were summarized by President Clinton’s Council of Economic Advisers in 1994: “It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth.”

From the CBO document you link.

CBO’s analysis begins with an estimate, provided by the Joint Committee on Taxation, of conventional revenue effects. Those estimates assume that tax changes do not affect gross domestic product,

The above is followed a few paragraphs later by,

The macroeconomic effects of a tax cut can be broadly divided into long-lasting supply-side effects and short-run demand-side effects. Supply-side effects are changes in the economy’s underlying potential to produce goods and services on a sustainable basis.

So as Mr. Laffer points out in his article the relationship between tax rates and revenues is that changes in tax rates have two effects on revenues: the arithmetic effect and the economic effect. The arithmetic effect is simply that if tax rates are lowered, tax revenues (per dollar of tax base) will be lowered by the amount of the decrease in the rate. The reverse is true for an increase in tax rates. The economic effect, however, recognizes the positive impact that lower tax rates have on work, output, and employment—and thereby the tax base—by providing incentives to increase these activities. Raising tax rates has the opposite economic effect by penalizing participation in the taxed activities.

The CBO relies on the arithmetic effect and basically ignores the economic effect by assuming that the tax cuts will not effect GDP while admitting a few paragraphs later that they do impact GDP.

CBO’s analysis depends upon assumptions about how people and firms respond to changes in tax policy. Those assumptions are embodied in systems of equations referred to as “economic models.” The estimated effects of the tax cut vary depending on which particular set of assumptions is used. Because there is insufficient evidence to conclusively identify which set of assumptions provides the most accurate estimates, CBO employed a number of such sets, which generated a range of results. However, that range does not span the possible effects of the tax cuts because people’s behavior may differ from CBO’s assumptions.

As stated above the CBO analysis relies on multiple assumptions, economic models and estimates. While as you clearly state the Empirical Evidence cited by Mr. Laffer is exactly that Empirical. It is Empirical because it is based on observation or experience and is capable of being verified. We have facts that show increased tax revenue, lower unemployment and increased overall economic growth following all three major tax cuts of the 20th century.

We now see the same effects following the Bush Tax Cuts. So, to say “It’s by no means clear — or even likely — that President Bush’s tax cuts are responsible for any increase in revenue” is, as Dr. Spock would say highly illogical.

Posted by: Kirk at February 4, 2006 2:12 AM
Comment #120474

Kirk, first of all, Laffer merely provided a formula for calculating the optimum tax rate. As I said, economists have used the formula to prove the optimum rate is anywhere fro 28% to 70%. Pick a number.

Second, I wasn’t going to touch that 1994 report because you really should be embarrassed to bring it up.

The report is a partisan attempt to show that the unprecedented economic growth that the country was just beginning to enjoy couldn’t possibly happen — but it did, didn’t it.

It also conveniently forgets that after ERTA, President Reagan repeatedly passed moderate tax hikes, President GHW Bush passed the largest tax hike in US history, and President Clinton passed a moderate tax hike to balance the budget.

I’m sorry to embarrass you like that, but you brought it up.

As for the CBO,

The macroeconomic effects of a tax cut can be broadly divided into long-lasting supply-side effects and short-run demand-side effects.

That’s an interesting point. Most people don’t make the distinction, but when economists talk about Bush tax cuts that stimulated the economy, they’re talking about ending the marriage penalty, increasing the child tax credit, and extending the 10% bracket — the “middle-class” tax cuts.

There’s no doubt that these demand-side cuts slowed the economic slide we were in — in fact, these tax cuts were extended unanimously by Congress in late 2004. Unfortunately they make up only 25% of President Bush’s tax cut package.

The supply-side cuts — the dividend, capital gains, and estate tax cuts (which only affect estates worth more than $4 million) — are the major culprets in the GOP Congress’ deficit explosion.

So are you wrong? Yes and no. Mostly (by about 75%) yes.

Posted by: American Pundit at February 4, 2006 6:55 AM
Comment #120543

Saying Democrats don’t have any ideas is like saying Sen. Kennedy suffers from excessive sobriety.

Posted by: American Pundit at February 4, 2006 12:37 AM

Didn’t you hear? He’s joined AA.
The only ideas I’ve heard is we have to cut and run from Iraq. Some constructive idea that is.
Oh yeah, impeach Bush. Might be a good idea but it aint like that’ll happen in the next 100 years or so. Besides we’ll end up with Chaney. Taht’s why I didn’t want Clinton impeached? Owl Gore.

Posted by: Ron Brown at February 4, 2006 11:03 AM
Comment #120566

A perfect example of typical Neo-Con babble:

“The only ideas I’ve heard is we have to cut and run from Iraq.”

The only way a person could help but hear or read the other ideas is if they clasp their hands over there ears, close their eyes, and begin chanting “blah, blah, blah” loudly and repetitively.

From the very beginning of our invasion of Iraq there have been ideas as far left as those of Dennis Kucinich but the vast majority of Democrats (and actually all Americans) “trusted” Bush. After all it was unthinkable that our Commander-in Chief would “cherry-pick” intellegence to lead us into a costly (both in $$$ and in human sacrifice)war and occupation.

Early into the “occupation” there were requests by military leadership for increased troop levels, which were all denied. Charles Rangel even introduced legislation to reinstate the military draft. John Murtha’s plan could hardly be called “cut and run” but I’m sure you wouldn’t bother reading it anyway.

I could go on and on with examples of “other ideas”. My point is not that I agree or disagree with any specific one of these ideas. In the case of the aforementioned military leadership I have no idea what their political leanings are.

The point is there are and have been an abundance of ideas. The only way a government “of the people, by the people, and for the people” works for the people is if they look at all of the ideas and make an informed decision.

I like to read the menu before I order.
KansasDem

Posted by: KansasDem at February 4, 2006 12:23 PM
Comment #120569

AP,

It has become obvious that you have not read the Laffer article that I posted the link to and portion of above.

“Kirk, first of all, Laffer merely provided a formula for calculating the optimum tax rate. As I said, economists have used the formula to prove the optimum rate is anywhere fro 28% to 70%. Pick a number.”

If you had read the article you would know that Mr. Laffer’s article doesn’t really discuss calculating an optimum tax rate. Instead he offers multiple factual cases where tax cuts have spurred economic growth, tax revenue increases and reduced unemployment. He also goes on to show the benefits of Flat Taxes have had in Easter Europe and the benefits seen by States following tax reform.

“Second, I wasn’t going to touch that 1994 report because you really should be embarrassed to bring it up.

The report is a partisan attempt to show that the unprecedented economic growth that the country was just beginning to enjoy couldn’t possibly happen — but it did, didn’t it.”

So, the 1994 report by the Clinton Council of Economic Advisors was partisan, yet clearly credits ERTA with being the empetus for strong economic growth.

“There’s no doubt that these demand-side cuts slowed the economic slide we were in — in fact, these tax cuts were extended unanimously by Congress in late 2004. Unfortunately they make up only 25% of President Bush’s tax cut package.”

Here is where your major flaw is exposed. You see all tax rates have both an arithmetic effect and an economic effect. The economic effects are the positive impact that lower tax rates have on work, output, and employment. These positive impacts increase the tax base by providing incentives to increase these activities. An increase in tax base leads to increased tax revenue despite the lower tax rates.

So, to characterize a reduction in tax rate as demand-side or supply-side is only somewhat accurate based on the initial rate adjustments. Over the long term as the tax rate adjustment filters into the market the demand / supply differentiation is eliminated by the economic effects of the adjustment.

The quote from the CBO report showing that there are long term effects as they put it on supply-side or what Mr. Laffer terms positive economic effects is in direct contridiction to the CBO’s basis for their analysis.

As stated by the CBO they begin their analysis based on estimates from the Joint Committee on Taxation. They also state that the Joint Committee’s estimates assume that tax changes do not affect gross domestic product. Or in other words the estimates assume NO economic effects of rate adjustments.

“the dividend, capital gains, and estate tax cuts (which only affect estates worth more than $4 million) — are the major culprets in the GOP Congress’ deficit explosion.”

Again by your statement, I assume you have not read the Laffer article that uses emperical evidence to show the repeated increases in tax revenues following capital gains tax rate reductions. The data provided also shows a direct inverse reaction to tax revenues following capital gains tax rate increases.

The Empirical Evidence is there and very clearly shows that reductions in tax rates lead to increased tax revenues to the government.


Posted by: Kirk at February 4, 2006 12:26 PM
Comment #120571

AP - The Democratic Party needs people like you! Any time you want to jump to the other side of the aisle let me know, after all we have a big tent over here :) As far as social security reforms go your party has offer very little, perhaps you can help guide them, or least get the ideas out there for debate. It’s very appartent that the only person on both sides of the aisle that has the courage to address the issues facing the “third rail of American Politics” is President Bush and he is right that the problem will not go away.

In regards to the President Bush’s 75% reduction in oil by 2025, I agree with you. I think we can do alot better than that. Currently, we import 60% of our oil, of which only 20% comes from the Middle East. Gov. Pataki has proposed state legislation that would eliminate state taxes on homegrown alternative fuels such as ethanol and biomast. In addition, he wants a grant program for owners of gas stations to pay for the installation of ethanol pumps. We need to make alternative fuels cheaper and available and Pataki is on the right track.

Regards,

Jay
Iacman’s Blog

Posted by: Jay Iacobucci at February 4, 2006 12:26 PM
Comment #120577

Bush didnt lie

Iran must not have nuclear weapons

Palistine is a Democracy that is run by terrorists.

Its our tax money - not any governements

Social Security will fail

Personal retirements and health insurance accounts must be portable and self managed. Look at the history of company retirement accounts

Posted by: Reporting for Doody at February 4, 2006 12:31 PM
Comment #120763

KansasDem
Yeah I’m a neo-con, that’s why I think Bush needs to be impeached. It’s one of those neo-con talking points.

Posted by: Ron Brown at February 4, 2006 11:42 PM
Comment #120798

Ron, if I misread one of your posts I apologize. But I’ve looked back and don’t see it. Can you C&P so I know what I’m apologizing for?

KansasDem
Yeah I’m a neo-con, that’s why I think Bush needs to be impeached. It’s one of those neo-con talking points.


Posted by: Ron Brown at February 4, 2006 11:42 PM

Posted by: KansasDem at February 5, 2006 1:20 AM
Comment #121927
Again by your statement, I assume you have not read the Laffer article that uses emperical evidence to show the repeated increases in tax revenues following capital gains tax rate reductions.

And I can show you empirical evidence of repeated increases in tax revenues following tax hikes. Where does that leave us, Kirk? :)

I feel like I sufficiently debunked your argument. If anyone wants to follow it up further, just google ‘debunk laffer curve’ or ‘debunk supply side economics’.

AP - The Democratic Party needs people like you!

Believe me, I know. :)

Any time you want to jump to the other side of the aisle let me know

No thanks. In my opinion, the Republican Party is morally bankrupt, its ideas (judging by all the recent legislative failures) are out of the mainstream, and they’re reduced to “fear, smears, and queers” attacks in a desperate attempt to hold on to power at any cost.

Oh, and they’re all a bunch of crooks.

Call me when you guys start electing politicians with traditional conservative values like balancing the budget, shrinking government, upholding American values and ethics, and pursuing a conservative foreign policy. In the mean time, only the Democrats are offering ideas on those issues.

Posted by: American Pundit at February 7, 2006 11:58 AM
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