Disparagement of Obama


Paul Krugman, the other day, identified a double standard, blogging

At the beginning of last week, the commentariat was in raptures over the Serious, Courageous, Game-Changing Ryan plan. But now that the plan has been exposed as the cruel nonsense it is, what we’re hearing a lot about is the need for more civility in the discourse. President Obama did a bad thing by calling cruel nonsense cruel nonsense; he hurt Republican feelings, and how can we have a deal when the GOP is feeling insulted? What we need is personal outreach; let’s do lunch!

The easy, and perfectly fair, shot is to talk about the hypocrisy here; where were all the demands for civility when Republicans were denouncing Obama as a socialist, accusing him of creating death panels, etc..? Why is it OK for Republicans to accuse Obama of stealing from Medicare, but not OK for Obama to declare, with complete truthfulness, that those same Republicans are trying to dismantle the whole program?

Of course, it is fine for Obama to point out "that those same Republicans are trying to dismantle the whole program," given that they want- and have voted- to eliminate Medicare. And of course the traditional media would rather the President fall in line with its practice, calling it "reform" or the GOP's effort to address health care costs. Suggesting that when Obama calls out Republicans for wanting to dismantle Obamacare he is being less than civil or bipartisan is inconsistent, given the legitimacy given outlandish GOP claims (e.g., socialism, death panels) about Barack Obama's policies.

But to be fair, this apparent hypocrisy is less about doubting or criticizing Barack Obama than it is about the nature of the controversy. There is one controversy- a trumped-up one (pun intended) in which the mainstream media supports Barack Obama and finds criticism of him lacking civility.

There are examples throughout. Discussing with David Corn and Joshua Micah Marshall implications that Barack Obama was born abroad (itself ridiculed as "birtherism"), Obama supporter Chris Matthews yesterday exclaimed

So basically, that`s what the right are saying. You got to say stupid things because that`s the price of admission to our clubhouse. If you`re not willing to say he`s a -- he`s not an American, don`t talk to us. And I think that`s where the real dividing line here is between the guys who refuse to play -- get in the mud, like Romney and Pawlenty, and the guys who say if we`ve got to get in the mud, I`ll get in the mud first.

Support for the President against those who would ignore facts is not limited to his critics. On Inside Washington, designated centrist Nina Totenberg refers to "fringe, nutty people;" Charles Krauthammer calls Donald Trump "our Al Sharpton." And after criticizing Mike Huckabee for failing to label as "paranoia" questions about Obama's birth certificate, George Will went after Newt Gingrich, writing

To the notion that Obama has a "Kenyan, anti-colonial" worldview, the sensible response is: If only. Obama's natural habitat is as American as the nearest faculty club; he is a distillation of America's academic mentality; he is as American as the other professor-president, Woodrow Wilson. A question for former history professor Gingrich: Why implicate Kenya?

President Obama may be infected with an "academic mentality"- which Will neglects to explain, unsurprisingly- but charges that he wasn't born in the U.S.A. are characterized by "vibrations of weirdness." Will, were he not far more erudite than I, probably would have said: Obama was born in this country but he is an overly-educated left-wing naif. And skinny, no less.

There is no credible evidence that Barack Obama was born outside of the United States of America. There is no credible evidence that President Obama is a socialist, an advocate of redistribution of income, an avid partisan, "angry black guy," or a traitor "largely responsible for destroying our economy and the budget and the currency who is "never gonna do what's best for the society generally." As for these, after two years of the Obama presidency, we know those things are false. We have seen him in action and he has proven he is none of these and is not dismissive of the nation's best interests.

The dividing line, then, is not between President Obama and his critics. It is between questioning Barack Obama's origins, which has been deemed illegitimate, and unsubstantiated, ultra far right denunciation of his policies, which the Beltway crowd thus far has accepted as legitimate and to which it has granted thoroughly undeserved credibility.

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Don't Just Do Something; Sit There


Standard & Poor's rating service yesterday issued a report (text, here) which had all of Washington atwitter and the stock market plunging. Its summary:

-- We have affirmed our 'AAA/A-1+' sovereign credit ratings on the United States of America.

-- The economy of the U.S. is flexible and highly diversified, the country's effective monetary policies have supported output growth while containing inflationary pressures, and a consistent global preference for the U.S. dollar over all other currencies gives the country unique external liquidity.

-- Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.

-- We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns.

The hysteria extended to Rush Limbaugh, though it's often difficult to tell if he's really panicked by something or merely exploiting it for right-wing effect. He claimed

I told you they're scared to death by this. They're scared to death. They think this is Standard & Poor's telling the world that Obama is a disaster. That's what this is. This is purely a rating based on the Obama debt.

Actually, Rush is only half-wrong here. Standard and Poor's did not maintain "Obama is a disaster." Or not. Nor did it suggest that House Republicans are to blame. Or not. Instead, it (namelessly) spread the blame around, its credit analyst maintaining

More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures.

Nor did the agency, in its fearsome analysis, shrink from praising the major players- President Obama and "key members in the U.S. House of Representatives," including Paul Ryan. Boldly, it "takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate."

Standard & Poor's argued "for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties." Given that the House, under John Boehner, is controlled by the GOP, the Senate is "controlled," under Harry Reid, by the Democratic Party, and the President (so we are told) has the power of veto, it is sage to assume that any plan adopted would have "the support from a cross-section of leaders in both political parties."

As the response from leaders of the two parties indicate, though, the report suggest a strategy of sorts for the federal government: don't just sit there- do something.

Except.... that is bad advice. According to Rush, "this is about the debt that Obama created. That's what that rating is all about." Not unless Barack Obama created the recession which began before he was nominated for President, initiated the wars in Iraq and Afghanistan, and lowered the 38.60% marginal tax rate for the very wealthy in 2002 while George W. Bush was head of state. (Yes, he extended them a few months ago but that hardly is what Limbaugh was thinking of.) The Center for Budget and Policy Priorities, from CBO data, illustrates it:






Our political culture, The New York Times' David Leonhardt has explained

has made most tax increases, even to pay for benefits people want, unthinkable.

This is where the Bush tax cuts come in. They have created a way for inertia to be fiscally responsible.

They are scheduled to expire on Dec. 31 of next year, not long after the 2012 election. If Republicans win the White House and both houses of Congress, they will probably extend all the tax cuts, come what may for the deficit. If Mr. Obama wins re-election and Democrats control Congress, they are likely to extend the cuts on income below $250,000.

But if Mr. Obama wins and Republicans control the House, the Senate or both — an outcome that many analysts, at least for now, consider the most likely one — things could get interesting.

Republicans have said that they will not extend only part of the Bush cuts. Late last year, when the cuts first expired, Mr. Obama yielded to Republican demands to extend all the cuts (while insisting that they expire again after 2012). He was right to do so, in my view, given the fragility of the economic recovery.

Next year, however, the economy should be stronger. When the economy is in good shape, modest tax changes often have little effect on growth. Look at the 1993 Clinton tax increase, which didn’t prevent the 1990s boom. Or consider the Bush tax cuts, which were followed by the slowest decade of economic growth since World War II.

If Mr. Obama wins re-election, he could simply refuse to sign any budget-busting tax cut for the rich — who, after all, have received much larger pretax raises than any other income group in recent years and have also had their tax rates fall more. Republicans, for their part, could again refuse to pass any partial extension.

And just like that, on Jan. 1, 2013, the Clinton-era tax rates would return.

This change, by itself, would solve about 75 percent of the deficit problem over the next five years. The rest could come from spending cuts, both for social programs and the military.

Congressional Republicans not only supported the Bush 43 tax cuts- they still defend them, notwithstanding the budgetary consequences. Grover Norquist claims 247 members of the House of Representatives and 41 (all but one a Republican) members of the Senate have signed his Taxpayer Protection Pledge, vowing to oppose any increase at any time for any reason the marginal income tax rate for individuals and/or corporations and any "net reduction or elimination of deductions and credits." They are not serious; sincere, perhaps; serious, not. Paul Krugman notes

whatever they may say, Republicans are not concerned, above all, about the deficit. In fact, it’s not clear that they care about the deficit at all; they’re trying to use deficit concerns to push through their goal of dismantling the Great Society and if possible the New Deal; they have stated explicitly that they want to reduce taxes on high incomes to pre-New-Deal levels.

There may be several reasons Standard & Poor's won't commit to a particular "mix" of spending cuts and revenue increases. Among them would be that advocacy by a nonpartisan organization of even a slight tax increase- which would spark opposition, and no support, from Republicans- would force an acknowledgment that one party has no interest in responsibly addressing the national debt.

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The Republican Media: No. 29


It graced the Facebook page of Carol Costello and it also was on CNN, purportedly part of that "liberal media," on Friday:


Carol Costello: If you listen to our politicians this week, you might think America is at war. Not in Iraq, Afghanistan or Libya, but right here at home in a kind of class warfare. [Excerpts of speeches by Obama, Orrin Hatch.]

From Republican Paul Ryan, Mr Obama's speech was the same old partisan politics:

Ryan: [video] "When the Commander in Chief sort of brings himself down to the level of the partisan mosh pit, it makes it more difficult to bring that kind of leadership."

Costello: groan It's deja vu all over again. Helloooo! 2008 anyone??? Will we see Joe the Plumber and President Obama calling Wall Street executives "fat cats" again?

At his inauguration Mr Obama urged both parties to rise above partisan politics. Now, says independent political analyst Jon Avlon, Mr Obama's speech opened him up to accusations of class warfare on the campaign trail going into 2012!

Wall Street vs main Street. As long as politicians keep reinforcing it, we will never get out of that partisan mosh pit.

So, talkback question today: Is class warfare the right political fight?


Apparently, it is the right political fight- and it is the political fight of the right. And it has worked, because it apparently has Costello buffaloed. The charts below, both from the Center for Budget and Policy Priorities from Congressional Budget Office data indicate: a)from 1979 to 2007 the after-tax incomes of the top 1% increased 281% and of the top fifth, 95%; for the middle fifth, 25%; b)as a result, the share of the nation's after-tax income increased of the top 5th increased from 42.1% to 52.5%.








The disparity in wealth is greater even than in income and is highly likely to have grown since 2005. This is how class warfare really works, as illustrated by the Rolling Stone's Matt Taibbi. He describes a program of the Federal Reserve and the opportunity it afforded two women: Christy Mack, the chairman of Morgan Stanley; and Susan Karches, the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Consider this Term Asset-Backed Securities Loan Facility (TALF):

Created just after Barack Obama's election in November 2008, the program's ostensible justification was to spur more consumer lending, which had dried up in the midst of the financial crisis. But instead of lending directly to car buyers and credit-card holders and students — that would have been socialism! — the Fed handed out a trillion dollars to banks and hedge funds, almost interest-free. In other words, the government lent taxpayer money to the same assholes who caused the crisis, so that they could then lend that money back out on the market virtually risk-free, at an enormous profit.

Cue your Billy Mays voice, because wait, there's more! A key aspect of TALF is that the Fed doles out the money through what are known as non-recourse loans. Essentially, this means that if you don't pay the Fed back, it's no big deal. The mechanism works like this: Hedge Fund Goon borrows, say, $100 million from the Fed to buy crappy loans, which are then transferred to the Fed as collateral. If Hedge Fund Goon decides not to repay that $100 million, the Fed simply keeps its pile of crappy securities and calls everything even.

This is the deal of a lifetime. Think about it: You borrow millions, buy a bunch of crap securities and stash them on the Fed's books. If the securities lose money, you leave them on the Fed's lap and the public eats the loss. But if they make money, you take them back, cash them in and repay the funds you borrowed from the Fed. "Remember that crazy guy in the commercials who ran around covered in dollar bills shouting, 'The government is giving out free money!' " says Black. "As crazy as he was, this is making it real."

This whole setup — in which millionaires and billionaires gambled on mountains of dangerous securities, with taxpayers providing the stake and assuming almost all of the risk — is the reason that it's insanely premature for Wall Street to claim that the bailouts have actually made money for the government. We simply can't make that determination until the final bill comes in on all the dicey securities we financed during the bailout feeding frenzy.

In the case of Waterfall TALF Opportunity, here's what we know: The company was founded in June 2009 with $14.87 million of investment capital, money that likely came from Christy Mack and Susan Karches. The two Wall Street wives then used the $220 million they got from the Fed to buy up a bunch of securities, including a large pool of commercial mortgages managed by Credit Suisse, a company John Mack once headed. Those securities were valued at $253.6 million, though the Fed refuses to explain how it arrived at that estimate. And here's the kicker: Of the $220 million the two wives got from the Fed, roughly $150 million had not been paid back as of last fall — meaning that you and I are still on the hook for most of whatever the Wall Street spouses bought on their government-funded shopping spree.

The public has no way of knowing how much Christy Mack and Susan Karches earned on these transactions, because the Fed has repeatedly declined to provide any information about how it priced the individual securities bought as part of programs like TALF.

Carol Costello doesn't want to dwell on this "partisan mosh pit." She and others might find out about the class warfare that has been going on for decades as the American taxpayer subsidizes wealthy investors, including offshore companies such as Waterfall TALF opportunity. Better to admonish Barack Obama for insulting Joe the sort-of Plumber and Wall Street- and to canonize Paul Ryan, whose formula for deficit reduction is elimination of Medicare.

As Digby notes,

This is the storyline for 2012. Get it straight. We're in "sacrifice" mode. And any of you who thought that Americans had already sacrificed quite enough of their futures already what with the ongoing high unemployment, health care crisis and foreclosures, think again. You don't know the meaning of the word. "Sacrifice" means paying more and getting less for the rest of your lives so that our productive overlords can make ever more money and employ more servants. If you object to that you are committing class warfare. Worse than that, you are boring the wealthy media celebrities, and that's simply unforgivable.

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Warfare, Ryan-Style


President Obama's budget speech (transcript, here) at George Washington University on Tuesday elicited the usual thoughtful, well-reasoned criticism from conservatives. No, actually it has provoked the expected hysterical accusations from many on the right, as outlined by Alex Pareene in Salon. In an editorial in The Washington Examiner, President Obama was accused of having

resorted to Huey Long tactics by making a punching bag of "the rich," that mythical top 2 percent of all Americans whose wealth the president famously told Joe the Plumber in 2008 that he just wanted to "spread around."

The editors did not tell us why the top 2% of American society is "mythical;" have they been kidnapped and frisked away to a foreign capital in an unusual application of extraordinary rendition? Were they, more tragically, lost in a natural disaster, be it tornado, earthquake, or tsunami? Or have they simply vanished, leaving the 98% of Americans behind to wonder how the top 2% disappeared?

As far as can be understood, the Washington Examiner was outraged when the President explained

For much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens. As a country that values fairness, wealthier individuals have traditionally born a greater share of this burden than the middle class or those less fortunate. This is not because we begrudge those who’ve done well – we rightly celebrate their success. Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back. Moreover, this belief has not hindered the success of those at the top of the income scale, who continue to do better and better with each passing year.

There was little careful analysis, the Examiner preferring to argue 1) if Obama wants the wealthy to pay more in taxes, then surely he'd want them to fork over all their earnings; and 2) increasing taxes on the wealthy won't alone eliminate the debt, so why bother?

Of course, the President has not advocated increasing the taxes on the upper crust- merely allowing them to rise which, according to current law, they are to do in roughly two years. That would return them to the level President Bush and the Republican Congress initially established as the rates to be paid in 2011. That would be 38.60% as the highest marginal rate, still lower than imposed during the Clinton administration (chart, demonstrating the precipitous drop in effective tax rates of the wealthy, from the Center for Budget and Policy Priorities; blog, from Krugman).




Similarly, James Pethoukoukis of National Review Online derides the devastation wrought by President Obama upon Paul Ryan's Path to Prosperity as a "class-warfare attack."

Class warfare has been invoked- but by Ryan, not by Obama. The Path to Prosperity (2012 GOP budget proposal passed today by the House) proposes lowering the top marginal tax rate from 35%. As Jamison Foser notes

That current 35 percent top rate applies only to taxpayers who make more than $373,650 a year. And remember: That's a marginal tax rate, which means it only applies to income above $373,650, so if someone makes $400,000 a year, she is only paying the 35 percent rate on the last $26,350. The average tax rate for the top 1 percent of taxpayers is only about 23 percent. Finally, keep in mind that the 35 percent top marginal rate is already quite low by historical standards: Since the Great Depression, there have only been five years in which the top rate was lower than 35 percent: 1988-1992. (The low top marginal rate in place during that time didn't prevent a recession from occurring in 1990-91.)

Ryan wants also to lower the top corporate tax rate from 35% to 25%, even though the effective corporate tax rate in the U.S.A. is lower than in many countries (chart from Doing Business database via Media Matters):





There is no word on how Ryan's plan would directly affect the industry, insurance, most generous to his election campaigns. The Wisconsin Republican does advocate, however, replacing Medicare with vouchers. According to the CBO, these cash payments would cover approximately 32% of the average elderly person's costs, with the individual left to pick up the remaining 68%. Further, the value of the voucher would decline over time relative to the cost of health care. It is a cruel trick to play on old Americans who, usually suffering from dementia or perhaps a host of physical ailments, would themselves have to negotiate with health care providers or insurance companies. Age alone would strike an insurance company, eager to please its investors, as a pre-existing condition.

Paul Ryan's dream, however, might not merely trample on the elderly and the poor to benefit wealthy taxpayers. In a study of his 2010 tax plan, Citizens for Tax Justice found (chart, below) that (compared to President Obama's proposal) under the Congressman's plan, Federal taxes would be lower for the richest ten percent and higher for all other income groups. and the bottom 80 percent of taxpayers would pay about $1,700 more on average.







President Obama doesn't want to batter and bruise the middle class. That's something Paul Ryan and his GOP colleagues are doing just fine on their own.

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John 1:17 (NASB): For the Law was given through Moses; grace and truth were realized through Jesus Christ.

GRACE. That which a person is not entitled to by law, but which is extended to him as a favor; a pardon, for example, is an act of grace.


Between The Lines


The sacred and the secular agree: "grace" comes not as if justice, but as if mercy; not through law or a right but as a gift, not as something owed.

Barack Obama, eager to invoke a biblical concept (grace) to prove yet again what he should not have to prove- that he is signed up as a Christian, not as a Muslim- declared at George Washington University on Tuesday:

"There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities.

But what was the President of the United States up to when he suggested that Medicare and Social Security come from somewhere other than the law?

The Social Security Act (HR 7260), as enacted August 14, 1935, reads

An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

On July 30, 1965 President Johnson signed HR 6675, the Social Security Amendments of 1965, which established Medicare and Medicaid.

Neither Social Security nor Medicare is needs-based. Neither requires establishment of need and the individual is entitled to Social Security and Medicare because each

guarantees a certain level of benefits to persons or other entities who meet requirements set by law, such as Social Security, farm price supports or unemployment benefits. It thus leaves no discretion with Congress on how much money to appropriate, and some entitlements carry permanent appropriations.

Medicaid is a means-tested, social welfare program for which eligibility is determined primarily by income and financial resources. Support for the program relies, in the President's elegant framing, on "a country that values fairness" and "recognize(s) that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us."

By contrast, Medicare and Social Security are social insurance programs financed through the payroll tax paid by employers and employees; partly as a result, eligibility is unaffected by economic status. President Obama, a disciple of the Bowles/Simpson debt reduction proposal, is favorably inclined to increasing gradually the age of eligibility for Social Security. He has told us he wants to "slow the growth of Medicare" and "put everything on the table, and take on excess spending wherever it exists in the budget."

Barack Obama previously had not informed us that Medicare and Social Security are funded not by the employer/employee contribution, but only by the grace of a caring society. Now turned in his ever-scrupulous and meticulous rhetoric into welfare programs, they are ripe for means-testing. Though the President has obscured it by characteristic oratorical flair, he has warned us.

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A Little Bad, A Little Good


The news about Social Security from President Obama's speech (text, as prepared for delivery, here) this afternoon at the world's greatest university is that there was no news.

That probably is good but only barely. The President remarked

As I said in the State of the Union, both parties should work together now to strengthen Social Security for future generations. But we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market.

As Mr. Obama implied, we already knew the parameters of the "reform"- as most individuals lukewarm to Social Security term it- which the President eventually will support. He opposes privatization of the system, "subjecting Americans' guaranteed retirement income to the whims of the stock market." Privatization is, as should be obvious, the favorite approach of politicians who want ultimately to end Social Security.

The President opposes also "slashing benefits for future generations." There will be no proposal for "slashing" benefits (as Obama typically puts it), merely for cutting the benefits. Slashing would be too jarring and inconsistent with the President's stated intent "to use a scalpel and not a machete" (though to reduce the deficit, which is unaffected by Social Security).

There is no reason to believe that anything supported by the Administration or even the GOP will in any way be "putting at risk current retirees." Most current recipients- even, to a lesser extent, individuals old enough to be close to retirement age- understand that Social Security is critical for their well-being and is a core component of the nation's social compact. They also have more reason to be skeptical of the "CW" (conventional wisdom)- in this case a myth- that the system is running out of money.

Throughout the debate, there has been an intensive disinformation campaign trolling the myth that Social Security contributes to the budget deficit. The President should have emphasized that there is no connection but his mere statement "While Social Security is not the cause of our deficit" is commendable, and more than we typically get from (obviously) opponents of the social insurance program and (incomprehensibly) supporters of it.

The President was less candid, though, when talking about the deficit commission he established, stating

These aren't the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed....

Today, I'm proposing a more balanced approach to achieve $4 trillion in deficit reduction over twelve years. It's an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year....

I believe reform should protect the middle class, promote economic growth, and build on the Fiscal Commission's model of reducing tax expenditures....

Obama speaks of "the kind of cuts that Republicans and Democrats proposed"; "an approach that borrows from the recommendations of the bipartisan Fiscal Commission;' "the Fiscal Commission's model." Understandably- but disingenuously- he tries to leave the impression that the all members of the commission, Democrats and Republicans alike, joined in recommendations with serious consequences.

Except that it didn't happen that way. Section 5 of the Executive Order establishing the National Commission on Fiscal Responsibility and Reform read:

(a) No later than December 1, 2010, the Commission shall vote on the approval of a final report containing a set of recommendations to achieve the mission set forth in section 4 of this order.
(b) The issuance of a final report of the Commission shall require the approval of not less than 14 of the 18 members of the Commission.

Commission co-chairmen Bowles and Simpson were unable to gain approval of 12 other members of the group, which thereby failed to reach consensus. A final report was issued, whether to pacify the co-chairmen (who earlier had co-opted their own commission by issuing their own report) or because, well, working for several months and failing to produce something in writing really doesn't look too good.

This should be of more than passing interest to the media. The report issued by Representative Ryan, as Obama explained, is way too extreme. However, Bowles-Simpson, from a centrist Democrat and a conservative Republican, is just right for a president leading a center-right revival.

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The Republican Media: No. 28


Sometimes you have to read something two or three times before you're sure you read it right the first time. Then you realize that you did. Digby caught this exchange, adding her comment beneath it, between CNN's Jessica Yellin and Senators Saxby Chambliss (R-Ga) and Mark Warner (D-Va.).

Jessica Yellin: Here are two members of the so-called Gang of Six a bipartisan group of Senators who are trying to negotiate deficit reduction. Saxby Chambliss is a Georgia Republican and Senator Mark Warner is a Virginia Democrat. Gentlemen thanks for being here.

First to you Senator Chambliss. You have been working together on this proposal for months. When will you reveal it and do you really think you can get 4 trillion dollars in savings?

Chambliss: Well there's not question but that we're working on a plan will achieve 4 trillion dollars in savings over the next ten years.As to when we're going to complete the details, that's still up in the air, but out group of six has been working very diligently over the last several months and we're going to continue to work until we can get this done and get it done the right way.That's a lot more important than the time frame in which to get it done.

Yellin: Well let me press you on that Senator Warner. House Republican budget Chairman Paul Ryan has revealed the initial Republican deficit reduction proposal, president Obama will reveal one on Wednesday, don't you both need to unveil it now, within days to be relevant in this debate.

Warner: I think one of the things we saw in last week's debate, if we start in our partisan corner you wind up with an 11th hour brinksmanship. We've been working for months on a serious plan and we're very close. We want to make sure it's right. And I do think in the coming short period of time that we need to get this into the debate and I think there are members in both parties who are willing to step up and say we are starting from a bipartisan basis and there's a much better chance of getting something done.

Yellin: let's start with bipartisanship because we saw an awful lot of acrimony over the last month over just a tiny sliver of the budget, the continuing resolution. How in the world Senator Chambliss, are you going to get Democrats and Republicans to agree for a long term spending plan in this partisan environment?

Chambliss: Well, that's why it's important that we work together as a bipartisan group to develop a bipartisan product. If we do start from one side or the other side and hope that we can meet in the middle, my guess is that never gets done. But the fact that we have three Republicans and three Democrats in a room discussing in a very serious way the most significant national security interest that the United States is facing today I think says an awful lot number one about the fact that we think we can get it done. And secondly that this group is committed to make sure that in a bipartisan was we address the issue will in itself give us a better opportunity than if we started at opposite ends and hope that we could meet in the middle.

Yellin: Senator Chamblis do you believe that Senate Republicans will agree to a package that includes any sort of tax changes?

Chambliss: Well, the fact of the matter is that you can't solve this debt problem just with reductions in discretionary spending. You can't solve it just by attacking and reforming entitlements. You've got to look at the revenue side also.

What we are looking at proposing is actually a reduction in corporate rates and personal individual income tax rates, which will put more money in people's pockets and we're going to do that with the reduction in tax expenditures. Every time we've done that in years past whether it was under President Reagan or president Bush we have seen revenues increase. And we've got to have an increase in revenues if we are going to retire this debt... revenues have to be on the table if we're serious about attacking that debt.

Yellin:Senator Warner, that's a big concession by Republicans. For Democrats, you've acknowledged that they have to come along and tweak entitlements. Over the week-end one of the president's advisers said this should potentially include social security. So what changes to social security would be part of your budget proposal?

Warner replied that they don't plan to take money from social security to pay down the debt but just feel they should make SS "secure" for the next 75 years anyway. (Apparently this epic deficit battle is such a breeze that they can squeeze in this unnecessary issue right along with it.) He finished up with this:

Warner: I think we've got the makings of a Grand Bargain if we start with a bipartisan basis, I think we can get it done and surprise a lot of the pundits.

Let's rewind this. We have Jessica Yellin summarizing "Senator Warner, that's a big concession by Republicans."

And what is this "big concession?" Obviously, Democrats would rather not cut spending, much; Republicans are adamantly opposed to any tax increase. So while Mark Warner, boldly representing Democrats, assures Yellin that Democrats need to be bipartisan and cut spending and Social Security, Chambliss says

What we are looking at proposing is actually a reduction in corporate rates and personal individual income tax rates, which will put more money in people's pockets and we're going to do that with the reduction in tax expenditures. Every time we've done that in years past whether it was under President Reagan or president Bush we have seen revenues increase.

He adds the obligatory "we're serious about attacking that debt" because inside the Beltway, no one is serious about deficit/debt reduction unless he or she proclaims himself "serious." And nothing- nothing- is more important than being SERIOUS.

Warner, determined to prove he is serious about the debt, has agreed to spending cuts. Chambliss, determined to prove he is serious about the debt, advocates "a reduction in corporate rates and personal individual income tax rates." That's right- reduce revenue to increase revenue.

Albeit counter-intuitively, spending generally increases with a cut in taxes. There may be less money to spend, but Congress is playing with house money- really, it's no one's money, having flown off the money tree GOP presidents always detect. The Atlantic's Jonathan Rauch explains "the way to limit the growth of government is to force politicians, and therefore voters, to pay for all the government they use—not to give them a discount.... Voters will not shrink Big Government until they feel the pinch of its true cost." As Rauch notes, William Niskanen of the CATO Institute (the CATO Institute!) reluctantly came to a similar conclusion.

But, additionally, revenues in the mid-term tends to decrease, rather than increase, revenue. Former Reagan advisor Bruce Bartlett quotes Alan D. Viard, a Bush 43 economist who moved on to the American Enterprise Institute, noted in 2006 "Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that." Robert Carroll, then deputy assistant secretary for tax analysis at the U.S. Treasury Department, conceded during that period "as a matter of principle, we do not think tax cuts pay for themselves."

He quotes also Edward Lazear, chairman of the Council of Economic Advisers in Bush’s second term, testifying to the Senate Budget Committee, September 28, 2006,

Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005. The tax cuts were a positive step and have contributed to the enhanced economic growth, additional jobs, higher real disposable income, and the low unemployment rates that we currently see today.

Revenues obviously increased substantially during the Clinton Administration. But as the chart from the Office of Management and Budget presented by Bartlett indicates, they generally decreased during the administration of the great tax-cutter, George W. Bush.

The assumption, when talk turns to "the revenue side," is that the Republican is admitting the necessity of at least considering a tax increase. Paul Ryan writes in the Wall Street Journal of "tax reform" in his 2010 Roadmap to America's Future; he means cutting taxes, especially for the wealthy. He advocates "pro-growth tax reforms" in his recently-released Path to Prosperity; it turns out he wants billionaires to be taxed at the rate of 25%.

Fortunately, Chambliss clarified that the GOP's "revenue enhancements" to cut the deficit are euphemism for tax cuts. But that wouldn't stop Jessica Yellin, working at the supposedly moderate and reasonable CNN, ideologically ensconced between cable's pro-Obama network and the network serving as the press agent for the Republican Party. After all, if Democrats are willing to entertain cuts in women's health, Medicare, Medicaid, and Social Security programs, shouldn't Republicans be willing to swallow tax cuts?

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