Thus Continues the “Great Unravelling”?

By JC

Max Baucus, after  his recently appointed role to the super committee saddled with finding 1.2 to 1.5 trillion dollars in deficit reduction, conducted an interview with the Helena IR (Google cache) editorial board and revealed some thoughts about how he’s likely to proceed:

[Baucus] noted that the Bush tax cuts also are set to expire at the end of 2012, and if Congress wants to prevent that from happening, it would need to reach some sort of bargain – hopefully one that reforms the tax code to make it simpler, better for the economy, and able to generate the revenue needed to put the country’s fiscal house in order.

“Part of the solution here is reforming the tax code,” he said.

So Baucus is willing to “prevent” the Bush/Obama tax cuts from expiring if the tax code is reformed. Ok, so he’s waffling on his talk last year about letting the tax cuts for the rich expire. Well, what do you expect from a gumby? Here’s what Max had to say then about an amendment he was offering to extend middle income tax breaks:

Our amendment says:  Let’s make the middle-class tax cuts permanent.

And our amendment says:  Let’s not allow tax cuts for middle-class Americans to be held hostage to tax cuts for those who make the very most.

Anybody on the left here think that reforming the tax code during another economic hostage “crisis” (like the debt ceiling hike) is a good thing? Yes the tax code needs to be reformed, but it should be done in the light of day in the regular order, and not done behind closed doors by a 12 member “super committee,” a committee that now presents itself as a large target to lobbyists and campaign dollars from the oligarchs.

Last minute, down-to-the-wire negotiations like the debt ceiling limit increase last week present the worst possible scenario for legislation. And given that Congress will only have the ability to take an up or down vote–no amendments or filibusters–we have a new “tyranny of the minority” to deal with. This time it is a 12 person “Super Congress” that has no basis in the Constitution.

And of course, all of this talk about the middle class and the rich leaves the fate of the lower castes poor unmentioned. Of course, we all know that “tax reform” to the right–as far as the unwashed masses is concerned–is a euphemism for making the freeloaders pay their fair share. So Baucus is setting himself up for a situation where the “super committee” is going to hold the Obama/Bush tax cuts for the rich hostage in order to exact cuts to entitlements, and if the right has their way, exacting more tax payments out of the poor. See where this is going?

The tea partiers want to reform the tax code, as outlined in their “Contract on America”:

Enact Fundamental Tax Reform: Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words — the length of the original Constitution. 

Let’s not forget that “single-rate” is the antithesis of a progressive tax system.

Judging by House Speaker John Boehner’s proclamation that the right got 98% of what they wanted out of the last tea party inspired hostage-taking, is there any doubt what the next goals who the next hostages are?

In Baucus’ conversation with the IR board, his comments about  entitlements, specifically Social Security, seemed to presage a major shift in his priorities:

Baucus indicated that without some revenue “balance” in the final proposal, he wouldn’t support cutting entitlement programs like Social Security.

While this statement is poorly couched as a double negative (leave it up to a group of Lee Enterprises editorialists to mangle the message), it translates like this to me: If republicans give us some revenue, we’ll consider cutting Social Security and other entitlement programs “like” Medicaid and Medicare. So that is the tradeoff, and one that Obama signaled during the debt ceiling “crisis”. You give us some revenue, and we’ll start cutting entitlements. And who better than Max Baucus to get on the bandwagon and lead the way?

Baucus needs to be pinned down on his stance on entitlements, and held accountable to democratic party ideals (if there are any left) lest the “Great Unravelling” proceed undaunted.

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  1. Escapee

    Sorry JC, but in my opinion the idea that taxes can be simple is a shibboleth. It works politically, but has no other value or content. No matter the intent of the code it has to be worded in ways that sharp lawyers cannot get around it. Even if you say we all should pay 15%, the meaning of % is going to be up for grabs, the people who only want to pay 0% are going to redefine the concept of income so that it only means that people who donrz’t have power have income.

    A simple tax code seems like a good idea. The fact that it is complex means that government is doing it’s job at cutting off end runs – it is not just loopholes being exploited. It is also loopholes being closed.

    • JC

      I wasn’t advocating a single rate. Quite the opposite. How did you get that idea? I may have mentioned “tax reform” as a desirable process, but it wasn’t to recommend a single rate. It would be more to close loopholes and head off “end runs” as you suggest.

      Jet lagged still?

  2. ladybug

    Obama and Baucus are the last two people on earth I would want negotiating national tax, health and retirement policy at one time in one “deal.” Decouple, and take each item separately or there is a real risk people (not the corporate type people) lose all three — then Baucus retires.

  1. 1 Baucus & Fellow Dems on Super Committee Threaten us with “The Results Americans Deserve” « 4&20 blackbirds

    […] here we are with exactly that scenario. America is in decline as the international economic juggernaut after having ruled most of the last […]




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