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Budget Deficit

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MSNBC analyst and former Obama advisor David Axelrod may not have been too happy with Rachel Maddow for her response to President Obama putting Social Security cuts on the table with his budget proposal, but she was exactly right here. The White House seems to want a fight with the left, because if what they were really worried was solvency of the system, they'd put raising the income cap on the table.

After Axelrod did a terrible job of attempting to explain why the administration actually believes this is somehow a good idea and claiming that what they're worried about is preserving the programs and economic growth, Maddow responded.

MADDOW: I believe you that he believes in his budget, but I think that if what he really believes in is Social Security benefit cuts, he's going to feel the ground beneath his feet give way. And I think this is the start that ends badly on the Democratic party (crosstalk).

After Axelrod tried to pretend that progressives “want to do nothing” and just leave the programs exactly as they are now, Maddow shot back.

MADDOW: Nobody's saying do nothing. That's not fair. Nobody's saying do... nobody's saying do nothing. First of all, Social Security isn't the problem with the deficit. Second of all, there is a way to fix it that has nothing to do with starving old people now or in the immediate future.

You have people pay more. And then your system is solved. If you wanted to approach it toward just solvency, that would be one of the things that's on the table. For the Democrats to not put that on the table and say it's all about solvency and not the politics, I just don't buy it.

He walked back some of his previous comments and brought up Medicare and Medicaid solvency, rather than just sticking to the issue of Social Security. He could have defended other portions of the budget such as spending on education and research and development. But after admitting that he's aware that the Republicans are already attacking the Social Security cuts, Axelrod said let's see what their position is in the coming weeks and months -- when they attempt to defend their “indefensible” budget.

Maddow was again correct in her response when she told him that their position in the upcoming weeks and months was going to be exactly where they are now. I'd say you can take that one to the bank. Good for her for calling the administration out for how cynical the politics of this move has been.



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If it's Sunday, it's another episode of Dancin' David Gregory inviting Republicans to come on his show and rattle off their talking points without fear of contradiction. Karl Rove's dance partner allowed House Majority Whip Kevin McCarthy to attribute a very famous statement by Dick Cheney's (that "deficits don't matter") to President Obama! He also said that Democrats are the ones responsible for racking up the majority of the debt we've been dealing with ever since President Obama took the oath of office.

We've been through this here so many times I've lost count, but for anyone who hasn't already seen these charts, President Obama is not the one responsible for the policies that added to most of the deficit during his first term in office.

And pardon me if I'm sick to death of the party that brought us two wars left off the books and the theft of God knows how many of our tax dollars with those debacles, a prescription drug plan that wasn't paid for, the Bush tax cuts, the bailout of the Wall Street gamblers that took down our economy, having the damn nerve to complain about our debt and deficit.

Gregory couldn't be bothered to point out that not only is our deficit shrinking considerably under President Obama, but it's also shrinking at the fastest pace in modern American history.

Transcript below the fold.

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After the release of Paul Ryan's new budget -- which looked a whole lot like his old budget -- despite the fact that the public rejected their policies when he and Mitt Romney lost the last election -- the panel members on MSNBC's Now with Alex Wagner this Tuesday were asked to weigh in on Ryan's proposal and this latest round of budget negotiations.

There were a lot of good points made about Ryan's ridiculous op-ed in The Wall Street Journal and the fact that he just wants to go after programs that help the poor, the elderly and the most vulnerable in our society and that his "budget" has a lot of numbers that don't add up. Ari Melber then made this point on how Ryan is regarded in political circles:

MELBER: I think Joy is hitting on something really important, which is those are the twin falsehoods, even apart from the hypocrisy of his record. One is, that just because it has numbers in it, doesn't make it a budget, right? My lottery ticket is not a budget. It's just a bunch of numbers on the page. And this thing [...] has a lot of numbers and as everyone has said, doesn't add up. It's more like fan fiction for Ayn Rand than it is a budget. And he's not a deficit hawk. To Joy's point, he's a health care hawk. He is interested in going after every health care program that's basically on the books from Obamacare, as you just articulated, to Medicaid, the program that is the most important for poor people, who need help and also for our society, because when we use medicine, preventative care for poor people, it actually saves all of us money, so it's good on both moral and efficiency terms and that's what's so frustrating here. I think Washington has called him serious for so long, they're over invested in treating this fake charade like it's a budget.

Katrina Vanden Heuvel followed up very nicely on Melber's points just a little bit later in the segment.

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Rep. Alan Grayson joined the set of Current TV's Viewpoint this Tuesday evening and was asked about former vice presidential nominee and House Budget Committee chairman Paul Ryan's widely panned budget proposal just released this week, and as we've come to expect from Congressman Grayson, he didn't mince words with his criticism of just who Ryan is looking out for with his proposals.

Rep. Alan Grayson: Paul Ryan wants sick poor people to die:

While discussing the Republican congressman’s latest budget proposal on Current TV, Grayson accused Ryan of wishing a large swath of Americans would die.

“In one case after another, you look at his principles, you look at his vision, and they’re a nightmare for America,” he said. “He wants Americans to work until they die, he wants poor people who get sick not be able to see a doctor, not to get the care they need, not to get better, he wants them to die, and he wants an America that consists of nothing but cheap labor for his corporate patrons.”

Ryan’s budget would repeal most of Obamacare, partially privatize Medicare, and cut discretionary spending on food stamps and other programs, while lowering the corporate tax rate. Grayson claimed that Ryan also wanted to cut Social Security, citing Ryan’s self-professed admiration for the libertarian novelist Ayn Rand.

“Paul Ryan believes that Social Security is unconstitutional,” Grayson explained. “Just like anyone who follows the writings of Ayn Rand would believe. If you read the Fountianhead, if you read similar fiction — although they don’t regard it as fiction — you come to the conclusion that these are people who believe government itself, anything that does anything for people other than defend the borders, is fundamentally immoral and unconstitutional.”

Grayson didn't mince words as well when it came to President Obama and whether he might be willing to make a deal with Republicans which cuts our social safety nets: Rep. Alan Grayson: ‘There is no fiscal crisis’ and ‘Republicans are crisis junkies’ :

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So much for those claims that unlike their "opinion" shows in the evening, Fox' daytime programming is supposed to be "straight news" reporting, but then, we all knew that was ridiculous before this incident: Fox News Anchor Shouts Down Criticism Of Ryan Budget:

Fox News host Bill Hemmer tried to shout down Rep. Chris Van Hollen’s (D-MD) criticism of the GOP budget on Tuesday morning by loudly reading from Rep. Paul Ryan’s (R-WI) editorial promoting the newly-released Republican plan.

Hemmer dismissed Van Hollen’s claims that Ryan’s proposal would benefit the richest Americans while severely underfunding programs like Medicare, Medicaid, and food stamps as “talking points” and claimed that the plan would make the government “healthier.” Then, as Van Hollen explained that steep cuts in spending would undermine job growth, Hemmer proceeded to angrily read from Ryan’s Wall Street Journal opinion piece.

As Van Hollen told Hemmer at the end of the interview, reading from Ryan's Wall Street Journal editorial to argue his points isn't exactly "fair and balanced." Media Matters has more where they break down all of the Republican talking points Hemmer was regurgitating here: Fox Regurgitates False Talking Points To Defend Ryan Budget . It's a long list, so go read the whole thing.



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After previously giving dire warnings about the sequester in a recent op-ed he penned for The Wall Street Journal, House Speaker John Boehner did an about face and told Meet the Press' David Gregory that he wasn't sure if it was going to hurt the economy or not and he told Gregory “I don't think anyone quite understands how it gets resolved." If he really wants to get the country out of this self-inflicted mess, there's a pretty simple way, which is to pass the bill introduced by Rep. John Conyers this week, entitled the Cancel the Sequester Act of 2013.

While they're at it, they could pass the Progressive Caucus' budget rather than insisting on more austerity measures. Instead we're being treated to this Kabuki theatre: Boehner: 'I don't think anyone quite understands' how sequester gets resolved:

In an exclusive interview with NBC’s Meet the Press, House Speaker John Boehner said there is no easy way to stop the budget cuts -- known as the “sequester” – that began taking effect Friday night, and voiced uncertainty over how Washington can solve the overall fiscal problems that have consumed the nation’s politics for more than two years.

In an exclusive interview on Meet the Press, House Speaker John Boehner weighs in the economic impact of the sequester and whether or not it will hurt the country's economy.

“I don't think anyone quite understands how it gets resolved,” Boehner admitted in his interview with NBC’s David Gregory. [...]

But Boehner said, “I don't know whether it's going to hurt the economy or not. I don't think anyone quite understands how the sequester is really going to work.”

The speaker said the House would pass a spending plan this week to fund the government through the end of the current fiscal year, which ends on Sept. 30, and that in his conversation with Obama at the White House Friday, the president had agreed “that we should not have any talk of a government shutdown. So I'm hopeful that the House and Senate will be able to work through this.”



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Nobel prize winning economist and columnist Paul Krugman sat down the MSNBC's Ed Schultz this Friday evening to discuss the recent madness we've been watching with this budget sequestration, which President Obama signed into law this Friday evening. Once again we find Krugman being one of the few voices of reason who is allowed some air time on our corporate media, discussing the fact that this deficit fetishism we're seeing from our politicians is exactly the wrong conversation we should be having right now.

What we should be talking about first and foremost is getting Americans back to work. It was also good to hear some push back against the constant chatter we're hearing from the Villagers in the media who are continually pushing for Chained CPI, and pretending as though cutting Social Security benefits in exchange for "tax reform" -- a.k.a. lowering taxes on rich people and corporations -- is something anyone should think is acceptable, or "balanced" or that would do a thing to help lower the deficit. It would have been nice to hear either of them say out loud that Social Security does not add to the deficit during this interview, but it was only implied and not clarified for the audience.

Here's more on Krugman's conversation with Schultz via Raw Story: Paul Krugman: Sequester ‘was designed to be stupid’:

“This was designed to be stupid,” Krugman said. “The whole point was, this was supposed to be a doomsday device that would force the [Democratic and Republican] parties to reach an agreement. Of course, they didn’t, and here it goes.”

While the effect of the spending cuts would take time to manifest, Krugman told Schultz, they would definitely be felt by late 2013.

“This is exactly what the doctor did not order,” he said.

While the spending cuts were conceived as a fix for the federal deficit, Krugman said, this was not the time to implement that kind of measure. Instead, he said, the government should be taking advantage of low interest rates and a high number of unemployed construction workers to invest in infrastructure and education.

“What kind of spending would it take to keep us on the track that we’re on right now?” Schultz asked, noting a continued pattern of private sector job growth despite Republican resistance to a new jobs bill since the stimulus package of 2009.

“If we would just stop cutting, the growth would probably keep going,” Krugman answered. “If spending had grown as fast in this recovery as it has in past recoveries, we’d be spending something like $200 billion a year — state, local and federal — more, maybe $300 billion a year more. Maybe $300 billion a year more. We’d have about a million and a half more public sector workers than we do right now, because we’ve been laying them off at [an] unprecedented pace. So, I think $300 billion a year of additional spending would be appropriate and would mean, if we did it, that we would be pretty close to full employment at this point.”

Greg Sargent made the same point in his column this week as well: The Morning Plum: Happy Sequester Day! We’re still stuck in the wrong conversation.:

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Thom Hartmann on the Real Reason the GOP Wants Sequestration

Thom Hartmann talked about the sequester with Jamie Weinstein, who's an editor at the Daily Caller, Tucker Carlson's rag. He pointed out that Republicans are now trying to lay all of the blame on President Obama's feet, even though House Speaker previously said that he got "98 percent of what I wanted" with the deal. Thom says the real reason that Republicans want to see sequestration go through is that it's going to tank the economy and they want to blame President Obama.

It's more of the same. Republicans are more than happy to inflict economic damage onto the American economy if they think they'll benefit from it politically. I'm pretty sure Weinstein and his ilk will do their best to make sure that happens and that there is no accountability if Republicans don't reach some deal next week, when Congress comes back from vacation.

Hartmann also took on Weinstein over whether it's fair to be asking those who make their living from capital gains and investments to pay the same tax rates as those of us who work for a living instead of just shuffling money around, like the Mitt Romneys of the world. He pointed out that even the Republican St. Ronnie agreed back in the day and had Republican crowds cheering for the rich to pay their fair share of taxes.

Weinstein responded with some weasel words about the average tax rate of most millionaires, which is a distraction from the point Hartmann was making about the difference in how income from work compared to income from investments is taxed, and whether we've got too many Mitt Romneys out there who are paying lower tax rates than those who work for them.

All in all, I'd say Weinstein brought a knife to a gun fight, because he didn't do a very good job of rebutting most of Hartmann's points.

I don't know how all of this is going to end up, but right now, I'm about as cynical as Hartmann when it comes to what kind of damage Republicans will inflict on this country if they think they won't pay a political cost for their actions. As long as we've got a compliant media treating their actions as normal or as something the public should consider acceptable, they don't have any reason to change their behavior.



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It was nice to see Chris Wallace get some push back on the assertion that we should be trying to balance our budget on the backs of our seniors or that it saves us a dime to be throwing more of them into the private insurance market by raising the age for Medicare eligibility.

Pelosi Stresses Need For Job Growth In New Budget:

House Minority Leader Nancy Pelosi defended Democrats' desire to raise revenues by closing tax loopholes, during an interview which aired on "Fox News Sunday."

Pelosi stressed the need for a budget which will create jobs and argued that the sequester would do too much harm to the economy. She also batted down the idea of saving money by raising the Medicare eligibility age.

"Don't you think you ought to see if raising the age really does save money?" Pelosi said. "Those people are not going to evaporate from the face of the earth for two years. They're going to have medical needs and they're going to have to be attended to. And the earlier the intervention for it, the less the cost will be and the better the quality of life. I do think we should subject every federal dollar that is spent to the harshest scrutiny. And I do think the challenge to Medicare is not Medicare, the challenge is rising health care costs in general."

Wallace was doing his usual bit where he was carping about how it wouldn't do any good to raise taxes on the rich, because that would not completely solve the deficit problem. He had no response to this and simply moved on to the next subject.



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Who needs Fox when you've got hosts like NBC's David Gregory repeating Republicans' talking points for them as he did here on this Sunday's Meet the Press. Somehow I don't ever remember Karl Rove's dance partner ever complaining about out of control government spending back when George W. Bush was busting the bank with a couple of wars he left off of the books and with tax cuts for the wealthy.

GREGORY: I want to get back to the automatic spending cuts and ask a fundamental question that I think Republican critics of this president are asking. Do you not concede that there is a spending problem in Washington? Even when it comes to the 50% cuts out of the sequester that are for the Defense Department. You have said in recent interviews you could live with those. You don't like the manner in which the cuts would be made, but you could live with those cutbacks to the Pentagon. So isn't there a spending problem here that must be addressed?

DURBIN: Absolutely. And I believe, as chairman of The Defense Appropriation Subcommittee in-- in the Senate, that we can save money, cut waste in the Pentagon, and not compromise our national security. But to do this in such a haphazard way over the remaining six or seven months is going to be unfair to the military and their families.

Think about this for a second. Cutting back on psychological counseling for the members of the military and their family during the remainder of this year, when we have this grievous problem of suicides in the military and readjustment when they come home from battle? We can't do that.

GREGORY: But isn't there always a reason-- (crosstalk) Isn't there always a reason to spend the money in Washington?

Can't you always find a reason not to cut? Isn't this the Republican argument that, at least here, if worse comes to worse and the sequester passes, at least we'll get spending cuts, how else to force the President's hand?

DURBIN: But listen. Do we really want to base our spending cuts on reducing medical research in America, on eliminating 70,000 children from Head Start, that early learning program that's so important? These things don't make sense. Let's sit down and do this in a thoughtful manner. And let's include revenue. We should have half of this as revenue from tax reform and the other half in spending cuts. And I support those spending cuts.

Sadly what was not mentioned here is that the Progressive Caucus in the House has a plan for reducing the deficit without causing pain to the poor and the working class. If Sen. Durbin doesn't want to help Gregory push his right wing talking points, maybe he should consider bringing this plan up the next time he's on the air: The Balancing Act.