CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press David Brooks Thinks When Democrats Win Elections They Have to Give Everything to Republicans

David Brooks Thinks When Democrats Win Elections They Have to Give Everything to Republicans

Print
Tuesday, 04 December 2012 05:40

It's fascinating to read David Brooks' column today. He boldly argues that Republicans:

"have to acknowledge how badly things are stacked against them. Polls show that large majorities of Americans are inclined to blame Republicans if the country goes off the 'fiscal cliff.' The business community, which needs a deal to boost confidence, will turn against them. The national security types and the defense contractors, who hate the prospect of sequestration, will turn against them.

"Moreover a budget stalemate on these terms will confirm every bad Republican stereotype. Republicans will be raising middle-class taxes in order to serve the rich — shafting Sam’s Club to benefit the country club. If Republicans do this, they might as well get Mitt Romney’s “47 percent” comments printed on T-shirts and wear them for the rest of their lives."

Recognizing their weak position, he says that Republicans should be prepared to allow the top tax rate to rise to 36 or even 37 percent, but in exchange:

"Republicans should also ask for some medium-size entitlement cuts as part of the fiscal cliff down payment. These could fit within the framework Speaker John Boehner sketched out Monday afternoon: chaining Social Security cost-of-living increases to price inflation and increasing the Medicare Part B premium to 35 percent of costs."

Excuse me, but what planet is David Brooks on? This would be comparable to Japan asking for Hawaii and parts of California as it was negotiating its surrender in World War II.

If nothing happens right now, the top tax rate goes to 39.6 percent on January 1, 2013. Let's say that again just in case David Brooks is reading. If nothing happens right now, the top tax rate goes to 39.6 percent on January 1, 2013. There is nothing that John Boehner and the Republicans can do to stop this.

Furthermore, President Obama has a mandate to raise the top tax rate to 39.6 percent. Brooks probably missed this, but we just had a lengthy election campaign where taxes on the rich were the central issue. President Obama won.

Incredibly, Brooks' proposal for "medium size entitlement cuts" would take a much bigger bite out of the income of retirees than his bold concessions on taxes would take out of the income of the rich. The cut to the cost of living adjustment would reduce lifetime benefits of seniors by around 3 percent. For the third of retirees that rely on Social Security for more than 90 percent of their income, this would be a cut in their income more than 2.5 percent. 

In addition, Brooks wants to raise Medicare Part B premiums by 10 percentage points of the total cost from 25 percent to 35 percent. With the per person cost projected to average almost $6,000 a year over the next decade, this "medium size entitlement reform" would raise the cost to seniors by $600 a year. This is equal to 3 percent of the income of a senior with an income of $20,000, a figure that is somewhat higher than the median for people over the age of 65.

So Brooks is looking to cut the income net of Medicare expenses for the bottom half of Social Security and Medicare beneficiaries by almost 6 percent. And, his tax increases?

We don't know exactly how Brooks would change the tax schedules, but let's assume that the 35 percent bracket goes to 37 percent, Brooks' higher number. And we'll raise the 33 percent bracket to 35 percent. For a couple earning $500,000 a year, this would imply an increase in taxes of roughly $7,600 a year or 1.5 percent of their income.

So Brooks is proposing that as a starting offer (he wants bigger cuts on the table in the year ahead) moderate income seniors will see their income drop by 6 percent due to cuts in Social Security and Medicare, while the wealthy will see their income fall by 1.5 percent from tax increases. It's interesting to think about what he would suggest putting on the table if the Republicans had won the election. 

Comments (12)Add Comment
...
written by reason, December 04, 2012 6:42
Ah, come on Dean, that's cheating. You know arithmetic has a liberal bias!
Brooks Presents False Choice
written by Robert Salzberg, December 04, 2012 6:45
Brooks wrote:

"Democrats would have to submit a long-term vision for the country that either reduced entitlement benefits or raised middle-class taxes, violating Obama’s campaign pledge. "

Even Mr. Brooks knows that by far the greatest driver of our debt is our broken health care system.

Instituting some form of single payer health care system would lower taxes and improve Medicare and Medicaid.

The only major entitlement left, Social Security, would be solvent through it's 75 year actuarial window if the cap on wages subject to the Social Security tax was eliminated. (The cap is $110,100 for 2012.)

President Obama and Democrats could propose phasing Social Security payroll taxes back in on wages over $250,000 which would not violate President Obama's pledge.

But a reasonable pundit would say that wage earners in the top 17% in America are mostly not middle class so eliminating the cap entirely wouldn't really increase middle class taxes very much.

The top 10% of American families make over $154,000 a year and should not be considered middle class. Phasing in the Social Security payroll tax at $150,000 and up would vastly improve Social Security's solvency without increasing taxes on the middle class.
Who really can call the shot? -- What Brooks Assumed But Did Not Say
written by Ron Alley, December 04, 2012 7:16
Let's face the facts. Republicans control Congress. They have a clear majority in the House. And they control the Senate through the filibuster.

So, who really is in position to call the shots?
...
written by bobs, December 04, 2012 7:28
As good a takedown of anyone I've seen in a while. Well done, Dean Baker!
...
written by JSeydl, December 04, 2012 7:32
We know what Republicans would have proposed if they won. It's called the Ryan plan, which literally sought to dismantle nearly every responsibility of the federal government. Given this, Brooks' starting offer isn't really that surprising.
...
written by MacCruiskeen, December 04, 2012 8:08
Well, Brooks has history on his side. Your headline describes what normally happens, so why shouldn't he expect it?
...
written by Bart, December 04, 2012 8:14

Great! He wants us to pay more for a health care system that is already twice as expensive as systems in other developed countries. Instead of emulating them he wants us to see just how expensive we can make ours.
...
written by Chris, December 04, 2012 8:20
How cute, they think they have leverage.

It's our turn to dictate terms, Brooksy.
...
written by skeptonomist, December 04, 2012 9:52
There has been an enormous amount of "analysis" of the election that concludes that it was a referendum on Obama's agenda and that Obama and Democrats now have a mandate they did not have before. This is nonsense. If the election is interpreted as a rational choice by voters (of course it was not), voters chose the status quo; Republicans retained control of the House, and Democrats the Senate and the Presidency. If voters wanted to implement the Democratic agenda they could have elected a Democratic House and a super-majority of Democratic Senators, a situation which actually existed in the past when there has been significant progressive legislation.

Things are set to remain much as before the election. There is no reason for Obama not to continue to press for higher taxes on rich people, and to resist efforts to cut entitlements, as these positions were strongly supported by polls before and after the election. And there is no reason for Republicans to change their demands for lower taxes for rich people; the objectives of big-money interests have not changed because Obama was re-elected, and those interests will not support politicians (or columnists) who do not further their objectives.
Power
written by David, December 04, 2012 10:31
Skepto, only through gerrymandering did the GOP keep their numbers. The pendulum its swinging against them. As Dean says, Obama can and should let the tax cuts expire. Then the GOP will have to fight against middle class tax cuts and for unnecessary entitlement cuts and for unpopular tax cuts for the wealthy. Sounds like a recipe for midterm election disaster for the GOP.
And ...
written by David, December 04, 2012 10:43
Big money supported Romney and lost. Congress has been warned. The GOP refuses to figure out what that truly means.
...
written by PeonInChief, December 04, 2012 1:42
Proving once again that David Brooks is not the brightest penny of the block, although I expect Obama to do just what Brooks suggests.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives