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An Inadequate $719B Stimulus Bill, With Unrelated $70B AMT Fix

By Big Tent Democrat, Section Economy
Posted on Wed Feb 11, 2009 at 04:18:31 PM EST
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If it is a deal, then the Congress is preparing to pass an inadequate $719 billion stimulus, with an add on adjustment of the Alternative Minimum Tax that will have no stimulative effect. The size of this proposal, in addition to its composition, makes it wholly inadequate for the task. It is much much worse than the House bill. Some details:

Despite intense lobbying by governors, the final deal slashed $35 billion from a proposed state fiscal stabilization fund, eliminated $16 billion in aid for school construction and sharply curtailed health care subsidies for the unemployed.

Slashing the most effective stimulus proposed while including non-stimulative tax cuts is proof positive that this bill is quite a mess, with no purpose driving it. Some claim that this is the deal Obama always wanted. If they are correct, then that is probably the biggest problem we have, a President unwilling to take the bold necessary action needed to address our economic calamity.

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    An Inadequate $719B Stimulus Bill, With Unrelated $70B AMT Fix | 128 comments (128 topical)

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    Perfect headline BTD (5.00 / 1) (#2)
    by ruffian on Wed Feb 11, 2009 at 04:26:27 PM EST
    That's exactly what it is. Two weeks ago it seemed to be pretty accepted that the stimulus had to be in the 850 Billion range to work. So they went and gave it 719. Brilliant. Enough to get 80% of the way up the hill, and roll right back down.

    And yes, if this is what Obama thinks is good enough, we have a lot of problems.

    SInce tax cuts have much lower stim bang per buck, (none / 0) (#126)
    by jawbone on Thu Feb 12, 2009 at 10:58:18 AM EST
    not all the monies being spent will actually have a stimuls effect.

    Parent
    Struck by another mistake by Obama today (5.00 / 1) (#3)
    by magster on Wed Feb 11, 2009 at 04:26:46 PM EST
    when he was bragging about no earmarks.  Earmarks are stimulative, and he probably could have gotten more Republican votes if he let Republicans add targeted stimulative earmarks to their respective districts.  Earmarks could have also jacked up the $$ amounts to Krugmanesque levels.

    good point (5.00 / 2) (#4)
    by ruffian on Wed Feb 11, 2009 at 04:28:31 PM EST
    If spending money is the point, earmarks are not a bad thing. Congresscritters know what will help someone in their district.

    Parent
    Yup (5.00 / 1) (#5)
    by andgarden on Wed Feb 11, 2009 at 04:30:51 PM EST
    I'm convinced that he could have bought off Lisa Murkowski. Much easier to make a Snowe-Murkowski deal than a Specter-Collins-Snowe deal IMO.

    Parent
    That's what LBJ would have done. Give them (5.00 / 1) (#17)
    by masslib on Wed Feb 11, 2009 at 04:47:22 PM EST
    something to go home with.

    Parent
    "A cost-cutting stimulus plan" (5.00 / 3) (#6)
    by Cream City on Wed Feb 11, 2009 at 04:31:31 PM EST
    is what it's called, apparently by Congressional leaders, according to CNN.

    Wolfie didn't even think about the pap he was pandering for them.

    A COST-CUTTING stimulus plan?  Isn't that a contradiction in terms?  I think we've identified the problem, peeps.  Our Congressional leaders think that to stimulate the economy, you don't feed it; you starve it.

    just shoot me (none / 0) (#9)
    by ruffian on Wed Feb 11, 2009 at 04:36:42 PM EST


    Parent
    School and health care cuts.... (5.00 / 1) (#19)
    by Shainzona on Wed Feb 11, 2009 at 04:52:00 PM EST
    for the most vulnerable among us...plus, two areas that would really create jobs.

    This is terrible.

    Bankers Pledge to Lend (5.00 / 1) (#20)
    by SOS on Wed Feb 11, 2009 at 04:52:49 PM EST
    Those fine, fine people at Citi have just sent out a mass mailing in Oz and gone on a TV and radio blitz offering Australians credit cards at 2.9%, a rate which can only be explained as being a result of their US government handouts.

    Isn't entire bank bailout lacing (none / 0) (#95)
    by BackFromOhio on Wed Feb 11, 2009 at 08:24:40 PM EST
    legal consideration?  What are the banks obligated to do in return for all the taxpayer $?

    Parent
    Who's the majority again? (5.00 / 1) (#21)
    by mmc9431 on Wed Feb 11, 2009 at 04:55:13 PM EST
    What is the point of having solid Democratic control of the WH and Congress if you can't pass a Democratic bill? Cutting spending on education and healthcare in order to increase tax cuts is beyond pathetic.

    Where were all these financial conservatives when Bush looted the treasury to promote his wars? I never heard any of them complain that we couldn't afford that.

    61 is the new 51 (5.00 / 1) (#36)
    by ruffian on Wed Feb 11, 2009 at 05:11:58 PM EST
    or so it seems.

    Parent
    Jackpot (none / 0) (#96)
    by BackFromOhio on Wed Feb 11, 2009 at 08:25:16 PM EST
    quote of the day!

    Parent
    Um (5.00 / 1) (#34)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:08:23 PM EST
    No, that's wrong.

    Fixing the AMT does not stimulate anymore than lowering the top tax rate4 is stimulative.

    You are arguing for Bush economic policies.

    BTD, NO (none / 0) (#123)
    by cpa1 on Thu Feb 12, 2009 at 07:54:51 AM EST
    Those in the top tax brackets .... here is the problem with what my answer was going to be...there are many in the top tax brackets, that is one of the problems.  A couple earning a total of $25 million is only paying 2% more (35%-33%) than two teachers earning $90,000 each.  If the first couple are trust funders whose income comes from dividends, they are in a 15% bracket rather than a 35% bracket.  

    So, there is a huge difference because the wealthy couple buys all it needs with their 65% after tax income. Lowering their rate will send them to their friends on Wall Street to find new gimmicks to invest in.  Those hit by the AMT are spending almost all of their income.  

    You must understand, if one earns a billion dollars of dividends his or her taxes will be $150 million dollars or 15%.  There is no AMT calc for that.  It hits those in the upper middle class whose deductions are high because of real state taxes, state income taxes or miscellaneous itemized deductions that are high.  Oftentimes, it hits employees with valid business deductions that cannot be taken before AGI (Adjusted Gross Income).

    So, what is really fair is that those making mega bucks should not be in the same tax bracket as a family earning $180,000.  There needs to be more rates, all the way up to 50% because a reasonable tax is what made this country grow.  Now the Reagan Republicans are sucking the life out of our country...and for what, an extra 3 homes all over the world or $90,000 bottles of French wine?

    Parent

    It's funny when you think about it (5.00 / 1) (#66)
    by nellre on Wed Feb 11, 2009 at 06:00:34 PM EST
    They're putting together a near trillion dollar spending package and trying to look frugal at the same time. LOL

    Can't they just pay us (5.00 / 1) (#70)
    by SOS on Wed Feb 11, 2009 at 06:04:51 PM EST
    to leave the country and relocate?

    I think that's what they want sometimes.

    Parent

    Maybe Obama should vounteer to (5.00 / 1) (#74)
    by SOS on Wed Feb 11, 2009 at 06:09:46 PM EST
    go on a $1 salary for this first year.

    Parent
    Well... (5.00 / 1) (#83)
    by santarita on Wed Feb 11, 2009 at 06:43:02 PM EST
    the next stimulus package will be bigger and better.  I'm afraid that this is just a downpayment.  When even fiscal conservatives like Martin Feldstein are complaining about the lack of spending, you know that this package will not be sufficient.  The next package will be enacted with a lot more of the citizens unemployed and a lot more people tell Limbaugh where to stick his economic ideas.

    Did I just hear that we are throwing $600 billion (none / 0) (#103)
    by BackFromOhio on Wed Feb 11, 2009 at 08:42:17 PM EST
    in construction funds into constructing the American Embassy in Iraq?

    Even our own federal government is sending jobs -- and $ -- abroad

    Parent

    Did Obama Roll Over Both the House and ... (5.00 / 1) (#93)
    by santarita on Wed Feb 11, 2009 at 08:18:58 PM EST
    the Senate?  Clearly the House Dems are not happy with this bill.  Was this a test of wills between Pelosi and Obama with Obama winning round #1?

    It would be kind of refreshing if, (none / 0) (#94)
    by Anne on Wed Feb 11, 2009 at 08:24:03 PM EST
    just for kicks, these people could stop playing their little who's-on-top, I'm-more-powerful-than-you games and focus on what would benefit us.

    The kabuki's really starting to get to me in a seriously upsetting way.

    Parent

    shall we state the truth? (5.00 / 0) (#109)
    by pluege on Wed Feb 11, 2009 at 09:23:28 PM EST
    that republicans beat Obama's A** on the stimulus bill in every way: size of the bill, what it spends money on, and the media war. Or is getting his A** whooped all part of the 11 dimensional chess triangulation change we can believe in plan?

    Its just amazing that republicans got what they wanted: more tax cuts and less spending to create jobs; they still don't have to vote for it (except for 3 sacrificial lambs taking one for the team), and they can blame democrats for its failure to stimulate the economy. (Note, republicans insisted on no state funding as a means of forcing drastic cuts in state services to get rid of a whole slew of Democratic Governors next election).  

    Obama and his geniuses screwed this so royally it is beyond words.

    Obama does not appear to have good strategy about (5.00 / 1) (#129)
    by jawbone on Thu Feb 12, 2009 at 11:34:39 AM EST
    actual partisan politics. Perhaps, as Cream City points out, it's bcz he came up through Chicago politics, where it's essentially a one party town and the actual battles are intra-party. Maybe that's why he's more comfortable fighting against Dems than Repubs.

    But he also seems to make moves which actually hurt his political strength, such as appointing Gregg to Commerce and agreeing to the idea of having a Repub replace Gregg. (I still shake my head when I think of that.) He also seems willing to take Dems out of their elected state offices and not worry too much about who and what party replaces them (I base this on some of the names floated).

    I just get this feeling he's really not that into actual Democrats, the Democratic wing of the Democratic Party, and the Democratic base. Or the principles of the Democratic Party.

    But I really don't understand him. And I still don't know what he really hopes to achieve as president. Actions, however, do speak more decisively than words.

    Parent

    Cmon (none / 0) (#130)
    by CST on Thu Feb 12, 2009 at 11:39:12 AM EST
    Obama did not have any control over who replaced Gregg.  That was btwn. Gregg and Lynch.  I mean cmon.  Obama didn't even have much say in who replaced HIM.

    You know we have seperate branches of gov't right?  The president is not an all-powerful dictator.

    Parent

    Also (none / 0) (#131)
    by squeaky on Thu Feb 12, 2009 at 01:08:06 PM EST
    If there was any strategy on Obama's part it will almost guarantee a second Dem senator for NH in 2010 because Gregg was the only R that could win being an incumbent.

    So if we do not lose any D's in 2010 we will have 60 in the senate.

    Parent

    Yea (none / 0) (#132)
    by CST on Thu Feb 12, 2009 at 01:18:07 PM EST
    I mean, there are legitimate arguments to make about what Obama is doing wrong.  But when people start making hay over nonsense it just gets old real quick.  And it deflates any real argument they might have.

    If you don't like Gregg as commerce, than just say that, but don't blame Obama for something the Gov. of NH did...  

    And yes, we have a much better chance of hitting 60 in 2010

    Parent

    Tell me, if President Obama's (none / 0) (#113)
    by RussTC3 on Wed Feb 11, 2009 at 11:15:22 PM EST
    original proposal was for $775 billion with a 60/40 split in favor of Spending, and he's getting a bill at $789 with a greater than 60/40 split in favor of Spending, how did he get beat out by the Republicans?

    The Obama administration put forward a bill they thought would best help the economy.  And they ended up getting what they wanted, for the most part, and then some.

    Support for the stimulus has increased among the public, the public thinks President Obama has done a great job at selling the package and they believe that the Republicans have basically been obstructionists.

    So again, I ask, how can you seriously imply that the Republicans won?

    Parent

    Here's how (5.00 / 0) (#117)
    by NYShooter on Thu Feb 12, 2009 at 01:53:45 AM EST
    The Republicans achieved their goal; The Dems achieved a pyrrhic victory.

    If a country is, or soon will be, at war, we get the smartest, most experienced General to sit down and come up with a winning Plan & Strategy. To do this, he/she will use actual empirical data derived from technology, history, experience, etc. When he/she brings his plan before the money extenders, you've got a pretty damn good model to work with. When George One told pre-total derangement Cheney and still closeted Pinocchio Powel, "get yo butts over there, stomp'em, and get yo a^ses back home, ....bingo, done. The point was, they were given a specific, empirical goal (kick a^s and get home,) and they were able to do it using smart, goal oriented, empirical methods.

    Now, obviously juxtaposing the economy with the military, a smart person would approach it in the same manor, using a similar template.
    The difference in today's situation is that the goal isn't to fix the economy. If it was, why then do would we put a bunch of dumb asses, having zero knowledge of the problem, and less than zero skills to fix it, in charge? Since the R's & the centrists' goal was never to fix the economy, they couldn't lose. But in their real goals: defining the new power structure in Washington, preening, and showing the new guy in town who's boss.....check mate.

    Would you put Claire McCaskill, whose daughters channel their instructions to her using cryptic notes placed in her PomPoms (Yes, You Can.....and You Will! ) In charge in Normandy on D-Day?

    The R's don't give a crap about the economy. (Limbaugh will get by on his $300,000,000 contract. And the D's could take a page from George one's book: "General, I want to win a war, tell me what you need, and I'll get it for you." That is, if that's what they wanted.

    Obama should have told "Rahm," 1.3 bil., tell me what you need, and I'll get it for you." if he really wanted to fix the country, this was probably the only time in his Presidency he could have done it.

    The stakes couldn't have been higher, and he just wasn't up to the job.

    Parent

    How's that bi-partisan thing going? (5.00 / 0) (#118)
    by pluege on Thu Feb 12, 2009 at 04:37:53 AM EST
    3 out of 178 republicans support Obama's bill. As I recall Obama's stated goal was 80 Senaters, he got 61.

    so if you read the post you responded to you'd know that republicans:

    • increased the tax component in the bill at the expense of effective spending
    • were able to grand stand spewing their failed ideology for 2 weeks without a response
    • still won't vote for the bill
    • will blame democrats for its failure

    but I guess comment without reading is an Obama fan prerogative.

    what Obama did succeed at was resurrecting an otherwise irrelevant republican party.


    Parent

    Could someone explain how paying states (2.00 / 0) (#26)
    by Green26 on Wed Feb 11, 2009 at 05:02:50 PM EST
    for medicare shortfalls is a stimulus?

    Sure (5.00 / 1) (#35)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:11:43 PM EST
    1. It saves jobs.  If Medicaid funding is cut, that equals cuts to health care clinics, hospitals and doctors offices that serve Medicaid patients.

    2. It lowers health care costs.  People are more likely to get preventative care if they have some sort of health coverage.  Preventative care lowers costs which means more money in a family's pocket.

    3. It prevents cuts in other state services.  Many states are not willing to just kick tens of thousands of people off of health care.  so they shift money from somewhere else - which means layoffs for state employees, teachers, police, etc.

    Mark Zandi has done the calculations and found that general aid to states (including increased Medicaid funding) is amongst the very best forms of stimulus, generate $1.38 in stimulus for every $1 spent (in contrast, extending the AMT patch is 0.49).  Here's a key graph:

    Cuts in state and local government outlays are sure to be a substantial drag on the economy in 2009 and 2010. Additional federal aid to state governments will fund existing payrolls and programs, providing a relatively quick boost. States that receive checks from the federal government will quickly pass the money to workers, vendors and program beneficiaries.

    Arguments that state governments should be forced to cut spending because they have grown bloated and irresponsible are strained, at best.   State government spending and employment are no larger today as a share of total economic activity and employment than they were three decades ago. The contention that helping states today will encourage more profligacy in the future also appears overdone. Apportioning federal aid to states based on their size, rather than on the size of their budget shortfalls, would substantially mitigate this concern.



    Parent
    Thanks Columbia Duck (none / 0) (#115)
    by Green26 on Wed Feb 11, 2009 at 11:34:54 PM EST
    Appreciate the response. I couldn't get into the link, though.

    Parent
    This will help me with the premiums on (none / 0) (#119)
    by suzieg on Thu Feb 12, 2009 at 05:32:02 AM EST
    my state health insurance risk pool which goes up twice a year at double the increase than regular policies. As a result my premiums will be frozen, I was paying $685 monthly 4 yrs ago - today, I pay $1397.

    Parent
    Are you serious? (none / 0) (#29)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:05:39 PM EST


    Parent
    The answer would be (none / 0) (#1)
    by andgarden on Wed Feb 11, 2009 at 04:24:38 PM EST
    that they really don't know what they're doing.

    Thou shalt not leave me (none / 0) (#27)
    by oculus on Wed Feb 11, 2009 at 05:03:57 PM EST
    comfortless.

    Parent
    AMT (none / 0) (#7)
    by bocajeff on Wed Feb 11, 2009 at 04:31:36 PM EST
    I don't understand how giving some middle class families a tax cut from the AMT wouldn't be something good - and maybe stimulating (albeit small). If more people have more money then they can do things like pay their bills, pay for their own education, etc...

    Also, I hate the Federal Government bailing out States. This is a republic and the States have certain powers and responsibilities. They got themselves into their messes, let them get themselves out of it.

    The AMT fix is fine (5.00 / 0) (#8)
    by andgarden on Wed Feb 11, 2009 at 04:35:16 PM EST
    So fine, in fact, that it's guaranteed to be passed on its own.

    Parent
    Because including it artificially inflates (none / 0) (#90)
    by andgarden on Wed Feb 11, 2009 at 08:02:20 PM EST
    the cost of the stimulus. I pose the question back at you: "why argue the point when you have no argument?"

    Parent
    I gave you a 1 (5.00 / 1) (#111)
    by andgarden on Wed Feb 11, 2009 at 09:27:49 PM EST
    because you're being a supercilious jerk. Not because I think there's anything other than hot air in your "argument."

    No further responses from me.

    Parent

    Whaaa? (5.00 / 1) (#14)
    by oldpro on Wed Feb 11, 2009 at 04:42:07 PM EST
    You think the states brought on this recession and destroyed their own tax base (property, sales and B&O tax)?

    And let's not forget the long list of unfunded federal mandates, including Special Education just to name one.

    Parent

    Exactly -- unfunded federal mandates (5.00 / 1) (#56)
    by Cream City on Wed Feb 11, 2009 at 05:36:04 PM EST
    if you don't mind my putting that in a header, too, to be sure that the questioner sees it.  

    Many programs are mandated by the feds and not funded by them -- or mandated by the feds for states to administer, and funded to an extent, but not funded sufficiently now with all the needs.  So the feds have to at least help with that funding or drop the mandates.  But that would violate some Supreme Court rulings, I would imagine, among many problems.


    Parent

    And...you have no idea how much (none / 0) (#76)
    by oldpro on Wed Feb 11, 2009 at 06:22:18 PM EST
    my state spends trying to get the feds to pay their bills and obey their own laws/agreements.

    ie.  My governor, years ago, before her 3 terms as atty general when she was the director of the state dept of ecology, sued the feds to cleanup Hanford.  She/we won...they lost.  Uh huh.  It's STILL not cleaned up and an environmental disaster may be in the making if the leaks reach the Columbia River.

    No.  I'm not making this up.

    Parent

    Oh, you have no idea how much (none / 0) (#91)
    by Cream City on Wed Feb 11, 2009 at 08:13:35 PM EST
    I believe you, because I've read about that sort of reneging by the feds here and elsewhere, too.  It's stick it to the states, stick it to the states. . . .

    And from the state that comes in, I read recently, 48th in terms of the ratio of our funds flowing to Washington but only trickling back our way (because the West really reaps the rewards of military bases, etc.) -- well, if we had gotten a better balance back to us before this, my state would not be in the terrible budgetary straits we're in now.

    This is what drives me nuts about the debate now on the stimulus bill, about states and cities and schools being seen as greedy or something.  The funding for the stimulus bill is coming from the taxes of we the people, and we and our govs and reps darn well get to weigh in on where it should go.  And number one, it should NOT go to Wall Street.

    Parent

    On BBC via NPR tonight: (none / 0) (#114)
    by oculus on Wed Feb 11, 2009 at 11:18:47 PM EST
    CEOs of finanical organizations whose creativity put us on the path to economic disaster got up to 50% of the profits realized by their creativity.  

    Parent
    It is good (none / 0) (#10)
    by ruffian on Wed Feb 11, 2009 at 04:38:42 PM EST
    So good they were planning to do it anyway. It does not belong in this bill - it just lets them say they passed a HUGE stimulus bill, when in fact, not so much. Plus, what spending did they give up to get this 70 billion in and stay under their self-imposed "cap"?

    Parent
    Rescuing California and New York (none / 0) (#13)
    by andgarden on Wed Feb 11, 2009 at 04:41:37 PM EST


    Parent
    Why? (none / 0) (#22)
    by Wile ECoyote on Wed Feb 11, 2009 at 04:56:58 PM EST
    These states need to fix their systems.  Helping them out will just prolong the pain, and give no incentive to fix their fiscal mess.

    Parent
    I'd prefer to raise your taxes (5.00 / 2) (#24)
    by andgarden on Wed Feb 11, 2009 at 04:59:52 PM EST


    Parent
    Sure (5.00 / 0) (#25)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:00:01 PM EST
    And in the long-run we're all dead.  NY and CA (and many other states) have some insane budget and taxing practices - many of which originated when conservative anti-tax groups learned how to effectively manipulate the initiate process in the '80s and '90s.  Those states probably deserve a measure of responsibility for the pain they find themselves in now.

    however, I'm not inclined to want to punish teachers, school kids and poor folks to make Ah-nold suffer.  States need reform - absolutely true.  But residents of those states also need help.

    (Not to mention it's good stimulus and without helping states the recession gets much worse.  That was one of the flaws of the New Deal - for all the help coming from Washington, states were cutting back.)

    Parent

    Isn't it true Californians pay (none / 0) (#30)
    by oculus on Wed Feb 11, 2009 at 05:06:19 PM EST
    more federal taxes than California receives in $$ from the federal government?  Much worse than other states--at least that is what Californias love to point out.

    Parent
    Yes Sir, we here in CA (none / 0) (#38)
    by Radix on Wed Feb 11, 2009 at 05:17:51 PM EST
    are a donor state. Last I saw, we get back 76 cents on the dollar.

    Parent
    yes, that's true (none / 0) (#41)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:20:57 PM EST
    Their state tax policies are insane though (going back to the passage of Prop 13 in 1978.  That one limited property taxes in such a way as to decimate local governments - Warren Buffett famously said that he paid more in property taxes on his Nebraska home than his California home even though the latter was a much more expensive piece of property.)

    But you are right that California is a "donor state" when it comes to federal taxes.  

    Parent

    Don't knock Prop 13 until you've (none / 0) (#44)
    by oculus on Wed Feb 11, 2009 at 05:23:09 PM EST
    been a CA homeowner who didn't trade "up."

    Parent
    Well... (none / 0) (#50)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:32:03 PM EST
    I don't want to get into a whole thing about Prop 13 so I'll just say that I am very wary about any legislation that sets arbitrary caps that are not tied to any of the real world changes in the value of homes.  And I have Warren Buffett on my side.  heh.

    Parent
    My theory: should Mr. Buffett (none / 0) (#53)
    by oculus on Wed Feb 11, 2009 at 05:34:18 PM EST
    wish to pay the amount of property taxes on his oceanfront property he feels would be fair:  go for it.  

    Parent
    Creative destruction (none / 0) (#33)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:07:04 PM EST
    or another word for it, Hooverism.

    Parent
    Actually, you can't lump NY and CA together (none / 0) (#51)
    by cpa1 on Wed Feb 11, 2009 at 05:32:32 PM EST
    Prop 13 ruined a once great school system and CA is now in the bottom three instead of on top.  They rank with Arkansas, Mississippi and Louisiana.  So, they do deserve what they got for electing Reagan and then voting for prop 13.

    In NY however, we pay huge RE taxes.  A house in Jericho (on Long Island) on a quarter acre averages between $11,000 and $14,000 in taxes.  

    Parent

    I think (none / 0) (#57)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:36:44 PM EST
    You're talking about two different things.  When it comes to federal taxes, CA is definitely a donor state.  When it comes to state taxes, agreed re: insane.

    Parent
    AMT fix won't change behavior (none / 0) (#11)
    by souvarine on Wed Feb 11, 2009 at 04:39:57 PM EST
    Everyone who would be hit by the AMT already knows Congress won't let that happen. So fixing it does not change their behaviour, and therefore the AMT fix has no stimulative effect.

    It's priced in, to use stock market speak.


    Parent

    What behavior would that be, (5.00 / 1) (#28)
    by Anne on Wed Feb 11, 2009 at 05:04:48 PM EST
    if you don't mind telling us?

    Parent
    Economic behaviour (none / 0) (#31)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:06:28 PM EST
    I know you did not ask me . . .

    Parent
    Like what? Owning a house and (5.00 / 1) (#80)
    by Anne on Wed Feb 11, 2009 at 06:30:45 PM EST
    paying real estate taxes?  Having medical expense deductions? Interest on a home equity loan?  Miscellaneous itemized deductions?

    Read this, and marvel at the thought and effort that went into creating this monster:

    In 1969, Congress noticed that 155 people with high incomes were legally using so many deductions and other tax breaks that they were paying absolutely nothing in federal income taxes. Their $0 tax bills were an embarrassment.

    So Congress instituted the AMT with the aim of making the tax system fairer. But because the AMT was never indexed to inflation--as the regular income tax is--each year, more and more middle-income taxpayers are snared by a tax originally targeted at the rich.

    Never been indexed for inflation.  Since 1969.

    It's ridiculous.


    Parent

    You mean they won;t pay RE taxes (5.00 / 1) (#122)
    by Big Tent Democrat on Thu Feb 12, 2009 at 07:45:06 AM EST
    if the AMT fix is not passed?

    I do not like discussing issues with folks who will not discuss the issue intelligently.

    Parent

    exactly how many (none / 0) (#78)
    by cpinva on Wed Feb 11, 2009 at 06:26:20 PM EST
    "middle-class families" do you really think are impacted by the AMT? i'm a tax professional (for 30 years), and unless you're investing in activities with huge tax preference items included in them, the odds are that AMT is only something you've heard wealthy people gripe about. or politicians trying to score votes from ignorant constituents.

    the average "middle-class family" isn't affected by AMT.

    Parent

    Are you kidding me? (none / 0) (#97)
    by cal1942 on Wed Feb 11, 2009 at 08:25:36 PM EST
    This is a republic and the States have certain powers and responsibilities. They got themselves into their messes, let them get themselves out of it.

    State and local governments do indeed have responsibilities for much of the basic day to infrastructure that enables us to carry on needed activities.

    These tasks cannot be neglected.

    Because of the recession, state and local revenues have taken a serious hit.  There is little to no chance in most states of raising taxes to cover the shortfall. We can thank irresponsible anti-tax crusaders and decades long rule by tax cutting Republican office holders at the state level for that.

    Most states are prohibited by their Constitutions from taking on debt, budgets must be bnalanced. That's why the Mitch McConnell (R-Japan) plan to give states aid in the form of loans was so disengenuous. He knew, or should have known, that most states would be helpless to take on the debt.

    So according to your theory bocajeff, we should just allow public goods to crumble into disrepair and damage any hope of economic revival.


    Parent

    For us here in NY (none / 0) (#98)
    by BackFromOhio on Wed Feb 11, 2009 at 08:27:47 PM EST
    this is only a dent toward payback.  New Yorkers give the federal government far more in taxes than we get back proportionate to other states.

    Parent
    The ATM is also great for my husband and I (none / 0) (#120)
    by suzieg on Thu Feb 12, 2009 at 05:35:41 AM EST
    because we'll finally be able to deduct some of our $22,000 in medical expenses ( premiums + deductible + co-pays + prescription drugs) which means we'll have more money to spend. I don't understand why the democrats are against helping the middle class by abolishing or raising the AMT to the rate of inflation.

    Parent
    No one is against it (5.00 / 1) (#121)
    by Big Tent Democrat on Thu Feb 12, 2009 at 07:44:08 AM EST
    We are against calling it stimulus.

    I do not understand what is so difficult about understanding that.

    Parent

    This thread is an object lesson in how easy it is (none / 0) (#127)
    by jawbone on Thu Feb 12, 2009 at 11:14:40 AM EST
    to bamboozle even those who pay attention to politics and legislation.  

    Just push some buttons and it's impossible for Dems, for example, to vote against something which should have been a regular bill versus being in the stimulus bill. If it were handled on a regular bill basis, the ATM benefits would have been available to the taxpayers and there could have been more Bigger Bank for the Buck funding in that actual Obama Stimulus Bill.

    That's what's lost by the ATM inclusion. Total stimulus looks like the right number, but it's not actually the right number. Games pols play.

    It was a scare tactic, for both higher middle class taxpayers and the Dem pols in Congress. And, it worked very, very well.

    Fear works extremely well in our political system.

    Parent

    More on education (none / 0) (#12)
    by jedimom on Wed Feb 11, 2009 at 04:41:07 PM EST
    from thrush:

    The stimulus compromise contains a split-the-baby deal on education funding that includes a partial restoration of $21 billion in school construction funding axed by the Senate.

    Funding construction was the White House's number-one priority in reconciling both stimulus bills.

    Instead of addressing construction independently, the conferees rolled it into a meta-education allocation -- to (technically) satisty GOP objections to creating a precedent for federal involvement in building schools, a time-honored local obligation.

    The House proposed a combined $79 billion for schools; The Senate $39 billion.

    The final number for construction and instruction splits the uprights at $54 billion.
    funny (5.00 / 4) (#15)
    by ColumbiaDuck on Wed Feb 11, 2009 at 04:44:59 PM EST
    I love how Republicans have an objection to federal involvement in building schools but no objection to a federal involvement in testing schools.  I wonder if it has occured to them that local school districts would have more money to maintain and build schools if they didn't have to use so much money complying with No Child Left Behind.

    Parent
    AMEN!!! (none / 0) (#16)
    by jedimom on Wed Feb 11, 2009 at 04:45:48 PM EST


    Parent
    sure get rid of the (none / 0) (#23)
    by Wile ECoyote on Wed Feb 11, 2009 at 04:58:39 PM EST
    Dept. of Education and give the money back to the states where they are closer to the action and let them spend it on Education.  

    Parent
    Yipee, creationism taught as a (none / 0) (#40)
    by Radix on Wed Feb 11, 2009 at 05:18:48 PM EST
    science.

    Parent
    Actually, the Federal Government provides (none / 0) (#42)
    by masslib on Wed Feb 11, 2009 at 05:21:32 PM EST
    very little funding to education.  

    Parent
    Which I think was the subject (none / 0) (#54)
    by oculus on Wed Feb 11, 2009 at 05:35:55 PM EST
    of the rant of Nelson (D-Neb.) yesterday on the Senate floor.  Special education unfunded mandates.  

    Parent
    So his answer... (none / 0) (#58)
    by ColumbiaDuck on Wed Feb 11, 2009 at 05:37:35 PM EST
    Is to have the federal government provide less in education funds in the stimulus?  oooooooooooookay.

    Parent
    No give the money used (none / 0) (#84)
    by Wile ECoyote on Wed Feb 11, 2009 at 06:58:37 PM EST
    by the DOE (who do they educate?) Back to the states to be used for real education.

    Parent
    What do you think DOE does with the money? (none / 0) (#125)
    by ColumbiaDuck on Thu Feb 12, 2009 at 09:45:44 AM EST
    Most of the money appropriated to DOE each year DOES go back to the states through block grants, IDEA funding, pell grants to families, various college loans, etc etc.  it doesn't just sit in a box on the floor.

    Parent
    Lets (none / 0) (#134)
    by Wile ECoyote on Fri Feb 13, 2009 at 03:29:53 PM EST
    see, they pay their salaries, for their physical bldg, paperwork, gov't vehicles they use.  It does not go to educating anyone.

    Parent
    That is right, but the taxpayers (none / 0) (#85)
    by Wile ECoyote on Wed Feb 11, 2009 at 07:00:41 PM EST
    fund the DOE.  They should use that money instead of funding a federal dept. that provides little in return.  Give that money back to the states to use.

    Parent
    Yes (none / 0) (#99)
    by cal1942 on Wed Feb 11, 2009 at 08:32:22 PM EST
    a time-honored local obligation

    Local school districts and some states build local schools but it should be noted that while customary it's not in the least bit sacred.

    During the 30s there were many new schools built and countless schools repaired and enhanced as WPA projects.

    Parent

    I do believe at the outset Obama said he wanted a (none / 0) (#18)
    by masslib on Wed Feb 11, 2009 at 04:49:27 PM EST
    bill with 40% tax cuts, and Congress could do the rest, no?

    Ahhh, I bet President Obama is irritated by (none / 0) (#37)
    by RussTC3 on Wed Feb 11, 2009 at 05:13:43 PM EST
    the fact that he wanted 60% of the bill to be in spending, and ended up getting 65% as well as more spending in Billions than he originally asked for.

    Geez, I wonder if he'll veto it since the Bill overshoots what he wanted?

    Indeed (5.00 / 2) (#46)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:27:14 PM EST
    Some claim that this is the deal Obama always wanted. If they are correct, then that is probably the biggest problem we have, a President unwilling to take the bold necessary action needed to address our economic calamity.

    Of course, adulating the dear Leader is another option. I hope you are enjoying it.

    Parent

    That's BS (none / 0) (#69)
    by RussTC3 on Wed Feb 11, 2009 at 06:03:15 PM EST
    I'm not adulating "the dear Leader" as you say (which personally is an outrageously offensive thing to have to read).

    I simply prefer to wait until everything is known before commenting on something.

    Of course it's more fun, and more comment-inducing, to discuss things that haven't been finished (after all, it's more easy to outraged over non-facts and easier to express one's opinion when you do that), but it's not good policy.

    Parent

    You seem to be not shy about commenting at all. (5.00 / 2) (#79)
    by Big Tent Democrat on Wed Feb 11, 2009 at 06:26:48 PM EST


    Parent
    So? (none / 0) (#89)
    by RussTC3 on Wed Feb 11, 2009 at 08:00:17 PM EST
    I know my opinion is in the minority on this site (none of us know how these things will end), but I think it's more than appropriate to highlight how many seem to be okay with pushing their opinion through as fact.  

    Why the outrage before everything is known?  In the end, what does that prove?

    Parent

    But you wrote (none / 0) (#124)
    by Big Tent Democrat on Thu Feb 12, 2009 at 08:06:11 AM EST
    "I simply prefer to wait until everything is known before commenting on something."

    apparently, you don't, according to you this ting is "not finished."

    Parent

    Have to start somewhere I guess (none / 0) (#39)
    by SOS on Wed Feb 11, 2009 at 05:18:15 PM EST
    Can you imagine coming into the Oval Office knowing that there are no capital reserves left, the nation is $20 trillion in debt, $53 trillion in worthless IOU's, all of the capital marketplaces are teetering, and the nation is bleeding red ink at the rate of $1.43 billion per day?

    Um (5.00 / 2) (#43)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:21:59 PM EST
    Do you live in Fredonia or something?

    No capital reserves? that does not even make sense.

    Parent

    Those were the figures (none / 0) (#48)
    by SOS on Wed Feb 11, 2009 at 05:28:53 PM EST
    according to David Walker, the ex U.S. Comptroller General and Head of the Government Accountability Office back at the end of 03.

    Parent
    Ah well, David Walker (5.00 / 1) (#52)
    by Big Tent Democrat on Wed Feb 11, 2009 at 05:32:37 PM EST
    You do realize we went off the gold standard in the 1940s unofficially, and officially in 1971?

    Capital reserves? I suggest David Walker look at the Constitution, it is called the taxing power - that is the capital reserves of the US. That's the 53 trillion in "worthless IOUs." In short, David Walker has acted the buffoon for some time now.

    Parent

    Exactly (none / 0) (#55)
    by SOS on Wed Feb 11, 2009 at 05:36:00 PM EST
    One hell of a mess ain't it?

    Parent
    This (none / 0) (#102)
    by cal1942 on Wed Feb 11, 2009 at 08:42:08 PM EST
    it is called the taxing power - that is the capital reserves of the US.

    is why our treasuries will always sell. No shortage of buyers.

    Parent

    Observe (none / 0) (#49)
    by SOS on Wed Feb 11, 2009 at 05:31:19 PM EST
    http://www.youtube.com/watch?v=OS2fI2p9iVs

    Parent
    Marx Bros. Fan (none / 0) (#101)
    by cal1942 on Wed Feb 11, 2009 at 08:39:04 PM EST
    Freedonia.  Love it.

    Parent
    Okay (none / 0) (#47)
    by SOS on Wed Feb 11, 2009 at 05:27:26 PM EST
    lets look back to the 1990s. America entered into a recession with a 7.2 unemployment rate in 1993. You could have a masters degree and all that was available were job's changing sheets in a hotel and flipping burgers. What got the U.S. out of this? Something called the internet revolution that had a productive capacity. Products were invented, designed, manufactured, marketed and serviced. Whats the next stage that's going to advance the U.S. into the 21st century in an intelligent way?

    Like leading the world out of the oil business for example.

    Who rolled who?? (none / 0) (#59)
    by jedimom on Wed Feb 11, 2009 at 05:43:28 PM EST
    thrush again:
    According to a half dozen Congressional aides and members, Reid went before the cameras Wednesday to announce a stimulus deal before Pelosi had agreed on all the details of school construction financing.

    "It's ruffled feathers, big time," said a House Democrat speaking on condition of anonymity. "The speaker went through the roof."

    Added one House Democrat: "He tried to roll her and she knew it."

    A few minutes after Reid announced the deal, Senate Appropriations Chairman Daniel Inouye (D-Hawaii) convened a public meeting of the House-Senate conference committee.

    It was supposed to be a glorified photo op. But there were no House Democrats in the room - and Inouye hastily announced the meeting would be scrapped pending a Pelosi "briefing" of members on the details.

    The problem, according to people familiar with the situation, was that Pelosi hadn't completely signed off on the Senate's approach to restoring some of the $21 billion in school construction funding.

    The approach adopted by the Senate still infuriates many members of her caucus, and Pelosi had yet to fully make her case to dissenters, a source told Politico.

    The result: Pelosi summoned Reid to her office - her turf - to hash out unspecified modifications to the package prior to a 5:15 re-convening of the conference committee.

    People close to Pelosi painted a different picture - one that portrays Reid as the one being rolled. Pelosi, they say, strategically permitted Reid to make his announcement - and then held up her approval to extract a slightly better deal.

    Contradicting other sources who said that Pelosi had been blindsided, a House Democratic aide, speaking on the condition of anonymity, said that Reid had placed a "head's up" phone call to Pelosi before announcing the deal.

    Whatever the real story, Pelosi's members were more than a little bewildered and headed into Wednesday's night's negotiation singing their Kumbayas through gritted teeth.

    "[Senate Democrats] don't know everything that's in the bill," said a laughing Charles Rangel (D-N.Y.), chairman of the Ways and Committee. "So I'm afraid to go to that damned conference."
    Worried about less than 3% of the spending? (none / 0) (#64)
    by RussTC3 on Wed Feb 11, 2009 at 05:59:44 PM EST
    Democrats love controversy don't they?  

    Parent
    Worried about 3% increase in unemployment? (5.00 / 1) (#68)
    by Big Tent Democrat on Wed Feb 11, 2009 at 06:01:19 PM EST
    Some people are fools.

    Parent
    My main point is that if the problem was over (none / 0) (#71)
    by RussTC3 on Wed Feb 11, 2009 at 06:06:02 PM EST
    a figure that low, don't worry, it would have been worked out within conference (as ended up happening).

    I'm not against that type of funding, only the way in which folks report and analyze it.

    Parent

    let me break the news to you: (5.00 / 1) (#81)
    by cpinva on Wed Feb 11, 2009 at 06:32:27 PM EST
    3% is not "that low". in auditing, it's considered material.

    Parent
    Your comment (none / 0) (#77)
    by Big Tent Democrat on Wed Feb 11, 2009 at 06:26:04 PM EST
    was pedantry. I answered in kind.

    You want to have a serious discussion? Then let's discuss these issues seriously.

    Parent

    We are not with the crowd. I was checking (none / 0) (#60)
    by Teresa on Wed Feb 11, 2009 at 05:52:11 PM EST
    another, bigger, blog for reactions. They are rooting for Reid and the Senate and mad at Pelosi and the House for standing in Obama's way! One precious quote that was loved:

    Geez. Some of these Congresscritters need to put on the big girl panties and grow up

    I'd like to respond but Jeralyn would have to delete me.

    Nancy's now getting (5.00 / 1) (#100)
    by BackFromOhio on Wed Feb 11, 2009 at 08:35:19 PM EST
    her taste of the Hillary treatment.  

    Parent
    So it's (5.00 / 1) (#105)
    by cal1942 on Wed Feb 11, 2009 at 08:51:16 PM EST
    dear leader and the hell with everything else with those people.

    Going to be sick.


    Parent

    We're all part of the vocal minority, so of course (none / 0) (#72)
    by RussTC3 on Wed Feb 11, 2009 at 06:07:08 PM EST
    you're not in the crowd.  Neither am I, neither is anyone else who peruses these sites.

    Parent
    Well, if that's the opinion of reasonably (5.00 / 2) (#82)
    by Teresa on Wed Feb 11, 2009 at 06:32:54 PM EST
    informed people, we're in for a world of hurt. Count me on Nancy's side in this one.

    Parent
    update (none / 0) (#61)
    by jedimom on Wed Feb 11, 2009 at 05:54:32 PM EST
    the note:
    UPDATE: To quell the last-minute rebellion by House Democratic leaders, who were unhappy with the scaled-down bill, senators increased the funds allocated to states for school construction.  In terms of the overall deal, the approximate top-line numbers include about 282 billion in tax cuts, which is lower than the $376 billion passed by the Senate, but more than $264 billion passed by House and roughly $507 billion in spending, for a total cost of $789 billion.  These numbers are likely to change as they go through the Congressional Budget Office.
    Knock off (5.00 / 3) (#65)
    by Big Tent Democrat on Wed Feb 11, 2009 at 06:00:17 PM EST
    70B for the AMT, which is not stimulus.

    Total package is 719B.

    Parent

    I'm not a super patriot (none / 0) (#62)
    by SOS on Wed Feb 11, 2009 at 05:56:16 PM EST
    like the guy in his pickup who ran over those crosses down in Crawford at Camp Sheehan but I do love my country.

    Whats it take to get Americans to feel just the slightest sense of sacrifice instead of me me me
    'I want it all and I want it now'?

    Thanks again (none / 0) (#106)
    by cal1942 on Wed Feb 11, 2009 at 08:56:51 PM EST
    Ronnie. The Reagan Revolution ... it's all about me, me and only me.
     

    Parent
    So what spending was eliminated? (none / 0) (#63)
    by RussTC3 on Wed Feb 11, 2009 at 05:57:42 PM EST
    It was originally 513/276

    They didn't cut spending for the (none / 0) (#67)
    by SOS on Wed Feb 11, 2009 at 06:01:00 PM EST
    celebrity challenge event of the AT&T Pebble Beach National Pro-Am golf tournament happening today that's fairly obvious.

    Parent
    where are there (none / 0) (#73)
    by DFLer on Wed Feb 11, 2009 at 06:07:21 PM EST
    teacher(s) making $115,000 a year
     ?

    Alaska? New York? (none / 0) (#75)
    by oldpro on Wed Feb 11, 2009 at 06:17:19 PM EST
    Other?

    The AVERAGE salary for K-12 in the state of Washington is over $50,000.

    Parent

    that's a lot less than $115,000.00 (none / 0) (#110)
    by DFLer on Wed Feb 11, 2009 at 09:25:18 PM EST


    Parent
    No strategy (none / 0) (#86)
    by mmc9431 on Wed Feb 11, 2009 at 07:04:18 PM EST
    Obama and Congress seem to be handling the stimulus package with the same game plan that Bush used for Iraq. (That worked so well).

    Instead of a full scale approach to solving the financial problems we're doing a patch here and patch there. Bush tried to do Iraq on the cheap too and look what it's cost us. We ended up wasting billions of dollars in the process. And there's still no end in sight.

    The same thing is happening now. By taking a timid approach, things continue to deteriorate faster than we can patch them.

    But if the strategy (none / 0) (#107)
    by cal1942 on Wed Feb 11, 2009 at 09:00:37 PM EST
    is to sing kumbuyah with a small cadre of Leninists, then the plan is on mark.

    Parent
    Who are the Leninists? The Gang of Screw the Ppl? (none / 0) (#128)
    by jawbone on Thu Feb 12, 2009 at 11:25:32 AM EST
    Or...??

    Parent
    Congressional Republicans (none / 0) (#133)
    by cal1942 on Fri Feb 13, 2009 at 02:05:00 AM EST


    Parent
    Actually... (none / 0) (#88)
    by wickedlittledoll on Wed Feb 11, 2009 at 07:52:33 PM EST
    If there was this much GOP opposition to a "piece-by-piece" approach to solving the financial crisis, how realistic is it to think they would suddenly find a full-scale approach palatable?

    http://democralypsenow.blogspot.com/

    The Republicans Wouldn't Find... (5.00 / 1) (#92)
    by santarita on Wed Feb 11, 2009 at 08:17:16 PM EST
    a full-scale approach any more palatable but Obama may have had a better time convincing the American people and making the Republicans look like a bunch of schmoes for opposing it.  The Republicans in Congress appear to almost be in ideological lockstep.  The only way to rattle them is to get the media and their constituents to look at them as the obstructionists that they are.

    Parent
    WHY AN ECONOMIC STRATEGY (none / 0) (#112)
    by robert diogenes on Wed Feb 11, 2009 at 10:11:10 PM EST

    GET THE FACTS BEHIND THE NEWS

    Elizabeth Warren head of the oversight panel setup by Congress to monitor the Federal Bailout  says, "THE GOV'T STILL DOES NOT SEEM TO HAVE A COHERENT STRATEGY FOR EASING THE FINANCIAL CRISIS. "Instead the gov't seemed to GO from one tactic to the next without clarifying how each step fits into the overall plan. .

    One of the reasons for Ms. Warren's observation is the US does not have an economic strategy. Professor Michael Porter distinguished Harvard Business School Professor  believes the development of a economic strategy is critical.

    Professor Porter notes the American political system has evolved with piecemeal reactions to current events.  I believe Professor Porter would like to see an ORGANIZED APPROACH TO POLICIES THAT PROMOTE LONG TERM GROWTH AND  COMPETITIVENESS.

    Where does the US really stand?  Prof Porter says the US has prospered because of unique competitive strengths.  1) The US has an unparalleled environment for entrepreneurship and starting new companies.  2) US Entrepreneurship has been fed by a science, technology, and innovation that is by far the best in the world.  3) The US has the world's best institutions of .higher learning .  4)  The US has been the country with the strongest commitment to competition and free markets.  5) The task of forming economic policy and putting it into practice is highly decentralized across states and regions.  This  decentralization  maybe the US greatest competitive strength.  6)  The US benefits from the most efficient capital markets of any nation.  This especially true  of risk capital.  7) The US has remarkable dynamism and resilience to take losses and move on.DO OUR PRESENT POLICIES HELP OR HINDER THESE ADVANTAGRES?

    Prof Porter warns us that what has driven our success is starting to erode.  More later.
    .

    An Inadequate $719B Stimulus Bill, With Unrelated $70B AMT Fix | 128 comments (128 topical)

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