House Speaker Bob Deleo, faced with a transportation system that is in financial shambles and some slowing of state tax collections against the benchmarks this year, is refusing to rule out tax hikes for the coming year. From the State House News Service:
DeLeo said he wants “to see where the numbers fall on next year’s budget” and with transportation financing before making a decision on whether to rule tax hikes in or out, a line the Winthrop Democrat has drawn the past several years, and which Democrats have followed, prior to the release of the House budget in April.
“That’s never been a desire of mine to increase taxes. But on the other hand . . . I’m smart enough to know that until you see the figures of what you’re working with, you don’t make any pledges.” DeLeo, the former House budget chief, said after a meeting Tuesday afternoon with UMass officials and local entrepreneurs.
There would probably not be a big story here, except that Deleo had been adamantly against any tax increases since becoming Speaker. The Legislature is faced with a post-election review of transportation financing, and that is the elephant in the room. The political debate during the campaigns has only dealt with this issue on the margins, with the real extent of the problem not truly being discussed. It will be discussed post election, and if it is an honest evaluation then some pretty hard decisions are going to have to be made. The Speaker knows this, and is leaving his options open. But that leaves a tough question for those running for office. Will the Speaker’s hesitation become an issue? How can it not?
Most everyone is sick of the topic, but lots of post debate debate about the “five trillion dollar Romney tax cut.” I have heard from many of my Republican friends that this is not true, and even Ted Panos on WCAP pointed to some “fact checking” that debunks the claim of a Romney $5 trillion dollar tax plan. Both campaigns have dueling ads on the subject. So what is the truth?
There, as always, is some gaming going on, so let us look at the plan, and point to where the confusion has been deliberately created.
So what did Mitt Romney propose for tax cuts? Lets look at what EVERYONE agrees on, and go from there. Romney proposes the following:
1) A reduction in ALL marginal tax rates of 20%
2) The elimination of the Alternative Minimum Tax
3) The elimination of the estate tax.
4) Making permanent the Bush tax cuts for all brackets.
To be clear the Romney tax cut of 20% would be on top of the Bush tax cuts. Now everyone agrees that is what has been proposed, even Mitt Romney. So there is no argument there.
When tax cuts are proposed the Congressional Budget Office will “score” them, as obviously there is a reduction in revenue when rates are lowered, or taxes eliminated. On that there is also agreement. So Romney’s proposal has been scored by the independent Tax Policy Center, and the “lost revenue” will be $480 billion per year, or $4.8 trillion over ten years. ($5 trillion).
Mitt Romney has also said, quite specifically, that his plan WILL NOT raise the overall tax burden on the middle class (although there is a disagreement on what constitutes the “middle class”), will not reduce
the overall tax burden for the nations wealthiest people, and will not increase the deficit. He has said that the plan will be revenue neutral. Governor Romney says that he will achieve this “revenue neutrality” by closing “tax loopholes” on the wealthiest taxpayers. He is refusing however to say which loopholes will be closed.
Now lets start the arguing. In fact the Romney proposal is a $5 trillion tax cut which needs to be “paid for”. So when someone asks whether Mitt Romney has a proposal for a $5 trillion tax cut my answer is yes. The Romney folks say that it is not a “tax cut” but a change or reform of the tax code that “broadens” the tax base, simplifies the code, and pays for itself. So when you hear the question asked and answered differently, and when you look at both ads attached to this post, that is what the dispute is about.
The denial by Romney might have some merit, but he has a problem. Since he refuses to say exactly how the $5 trillion in lost revenue would be paid for by identifying tax deductions that would be eliminated the non-partisan Tax Policy Center looked at the principles he enunciated, and then began the process of eliminating deductions for upper income folks to see if the $5 trillion could be covered. They found that the cost of $5 trillion could not be covered simply by eliminating deductions for upper earners. If the goal is revenue neutrality then, in lay terms, the Center found that you must eliminate deductions utilized by the “middle class”. From the TPC Report:
We found that a tax reform plan that simultaneously met the first four goals would imply reduced
tax burdens on families with income above $200,000. Meeting the fifth goal – revenue neutrality – would then imply increased tax burdens on other taxpayers, a necessary but perhaps unintended consequence. This was true even though we made the financing of the plan via tax expenditure reductions as progressive as possible by assuming that tax expenditures would be eliminated from the top down: first, we eliminated all available tax expenditures for those with income above $200,000; only if those revenues were insufficient to achieve revenue neutrality (which in fact they were) did we reduce tax expenditures for households with incomes below that
level. The basic logic of our central finding is captured in Figure 2 from our paper (attached here as
well). The graph shows that cutting individual income tax rates by 20 percent from today’s levels
would reduce tax burdens by $251 billion per year (in 2015) among households with income above $200,000. But, if we assume a strict interpretation of the second goal – preserving and enhancing incentives for saving and investment (see footnote 2) – there are only $165 billion of available tax expenditures to close in that group if tax rates are cut). As a result, to achieve revenue neutrality, the resulting $86 billion annual shortfall must be made up by raising taxes on the rest of the population. We showed, in addition, that the same qualitative conclusions arise even when we added in feedback effects of tax changes on economic growth and revenues, using estimates of those effects that were developed by Harvard professor, and economic advisor to the Romney campaign, Greg Mankiw.
Essentially the TPC is saying that the Romney math does not work. Romney is taking pains to deny this, and say that his stated goal of revenue neutrality, along with no additional tax reductions for top earners, can in fact be met as he stated. Romney could end all of this by simply producing a specific list of deductions he would eliminate, but he refuses to do so.
When you put aside the partisan bickering what is the truth? The Romney folks, in a couple of unguarded moments, have said that if the math in fact does not work they might scale back the proposed tax cuts. The campaign, however, refuses to make that statement, and is sticking with the plan. But the reality is two-fold. The first is that if you wiped out all tax preferences for upper earners you cannot make the math work. The second is that how do you expect to wipe out ALL tax preferences from a political standpoint?
The truth is that:
1) Romney has proposed reducing revenues by $4.8 trillion over ten years.
2) He has not specifically said how he would finance that lost revenue
3) The budgetary impact would either be an expansion of the deficit, or a tax hike on the middle class through the loss of tax preferences that would increase total tax liability in that income group. Or Romney can change the tax cut to make the math work.
4) Romney has said that “dynamic scoring” (increased growth through lower marginal rates) would pay for some of the $5 trillion, but so far has refused to say what number he assigns to that category. That is an argument that needs another post, but the Romney argument is the direct descendant of what George H.W. Bush called “voodoo economics”
5) The total impact, to either the deficit, or to middle income taxpayers, would be much less than $5 trillion, since you can pay for “some” of the tax cut through the Romney methodology.
6) Romney says that impact to the budget is “neutral” because he says it is.
The last word on this goes to Romney defender Robert Samuelson, who said this:
The TPC report was widely interpreted as saying Romney would have to raise taxes on the middle class. It didn’t, says the TPC’s Howard Gleckman. It simply pointed out that he couldn’t keep all “his ambitious campaign promises.” He’d have to make choices and modifications. So what else is new?
Politicians exaggerate and simplify. They make more promises than can be kept. They take inconsistent positions. Romney is guilty of this, but so is Obama.
Samuelson essentially pleads guilty, but wants mitigation because the other guy is guilty too. They all do it. The one point that Samuelson makes that is correct is the one I made above. The net impact must be less than $5 trillion, because you must give some allowance for recouping some of those dollars through the Romney methodology.
The September jobs report comes out, and about half an hour later former GE CEO Jack Welch, a Romney supporter, posts the following tweet:
Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers
So Welch accuses the President, or the President’s team, of “cooking the books” on the unemployment numbers. Evidence? Much like the right on voter id Jack don’t need no stinkin evidence. No need to get into the weeds of how labor statistics are calculated, but Welch seems, when questioned, to be skeptical of the methodology. Question is did that methodology change for this report? Of course it did not. For a look under the hood go to Ezra Klein over at the wonkblog, where he gets a bit detailed, but thoroughly debunks Welch.
So is Welch just a windbag spouting crackpot theories? I personally don’t think so. Welch has managed to shift the conversation from a somewhat positive jobs report to the President and Democrats having to defend the validity of numbers that have been calculated the same way for decades. The conversation has shifted from a positive one for the President to whether Jack Welch is a nut, and you have plenty of serious crackpots willing to pick up the gauntlet Welch has thrown down. Welch, with one tweet, has managed to throw a good message for the President off course slightly. That is not the work of a crackpot, but rather the work of a campaign with no shame.
From the simply unbelievable album from Beth Hart and Joe Bonamassa called “Don’t Explain” this cut is from a song written by Melody Gardot. This version, with Joe Bonamassa playing a beautiful guitar, is simply spectacular. When is Beth Hart going to be touring in this neck of the woods? Hopefully soon.
So Bob Leblanc has gone on MCTV and managed to insult an entire section of the City, and also shown a reckless disregard for the truth. But what else is new?
Boob professes, in the attached video clip, to be concerned about receivership of substandard, abandoned, or foreclosed properties in the City of Methuen. Lets take his quotes, one by one.
He says, in the clip, “I am concerned that Bill Manzi and MAN, Inc, down in the Arlington District, are going to take over those properties”.
If this “attorney” knew anything at all about the receivership program he might understand that receivers do not “take over” properties, but rather bring them up to code under the supervision of a judge. The work is done at the receiver’s expense, and recovery of the money invested to restore blighted properties is the receivers responsibility. But the “attorney” does not wish to deal in facts, only in his sordid little game playing.
How about this doozy:
“I am not interested in proliferating the Arlington District into the rest of the City”
What is it exactly that the “attorney” does not want to “proliferate”? The people? Of course it is the neighborhood in Methuen with the highest concentration of minority citizens.
The “attorney” also came up with this:
“what makes me very nervous is that he attends the meetings on a regular basis”
“He” is a reference to myself, and the “meetings” are of the Building Safety Task Force. These meetings are of course posted, and open to the public. As a member of the public I have attended some meetings, and offered the perspective of the Methuen Arlington Neighborhood. So the “attorney” is “concerned” that I am attending public meetings, and that the Methuen Arlington Neighborhood is taking steps to bring abandoned and out of code buildings into code compliance within the neighborhood. Now why would that be?
In reference to Councilor Sean Fountain:
“He is an agent for Bill Manzi”
The attacks against people he considers to be his political opponents are continuous, ad hominem, and are designed to intimidate folks that he thinks he can push around. His comments are an embarrassment, and normally are best left ignored. But his insulting an entire class of citizens should be brought to the light of day, which this post will do. Clarity is a good thing, and we will have more of it in the days to come.
So the first debate is over, and universal response is that Mitt Romney won the debate. I watched, and I do believe that Romney did indeed “win” the debate. I also believe that Obama “lost” that debate as much as Romney won it.
Romney was the aggressor throughout the night. To use a boxing analogy Romney pursued the President throughout the night, cutting off the ring and getting off first most of the night. What happened to the President?
I think the President was thrown off stride early by the Romney assertions, totally false, that his tax plan would not cost $5 trillion, would not give additional tax benefit to the upper brackets, and was revenue neutral. Obama seemed befuddled, and unable to strike back at the clearly false assertions. Romney’s tax position seems to be that his plan is what he says it is, and you will just have to wait until after the election to get the details.
Romney took it to the President on health care, making assertions that again were totally false. Romney’s assertion that his “plan” covered those with pre-existing conditions has already been walked back by his own campaign after Romney made the same claim a few weeks back. The truth is that he has no plan for people with pre-existing conditions, claiming that the market will take care of it. Romney continually calls for repeal of ObamaCare, but NEVER makes suggestions for what will come in its place. He seemed to me to indicate that he favored a return to the pre-reform system, which was a disaster for the country. Romney has also walked back the Paul Ryan plans on Medicare, assuring all that there will be no change, and no savings, from any Romney Medicare changes. That must be shocking news to the Republican base.
The Romney plan on the budget, as explained last night, would lower the deficit by cutting PBS. He essentially indicated that all of the spending cuts he has advocated for by saying he would sign the House Republican budget were off the table. He even claimed that he would not be cutting education spending. Totally false.
So in the final analysis President Obama will need to raise his game, and do so substantially. As folks look at what impact this will have they may look at national polls, but I think the swing state polls is where our gaze should go. Florida and Virginia are two states where polling had showed virtual ties, and the strong Romney showing could tip them, for the time, into the Romney column. I think the campaign narrative, overnight, has changed, putting Romney right back in a game he was on the verge of losing. The Obama campaign, if they lose this thing, will need to look in the mirror and admit that they had the wrong strategy for this debate. Mike Murphy called it the “Sandman” strategy: “put em to sleep, agree, and run out the clock”. Sorry Team Obama, wrong strategy. Romney was better prepared, crisper in presentation, not afraid to tell a whopper or two, and the aggressor throughout. Team Romney got it right, and Team Obama made a bad error. They should begin preparations for the second debate by firing John Kerry as the Romney stand in.
We have examined the statewide polling numbers in the Elizabeth Warren-Scott Brown race in earlier posts, with those numbers showing a difficult (but not impossible) road ahead for Senator Brown. But different regions of the Commonwealth have differing voting patterns, with Senator Brown generally doing better in suburban areas, and Martha Coakley performing better in urban areas. Will that pattern hold? It will likely, in a framework sense, hold true. The numbers, in a presidential election year, will obviously change as far as turnout. Will it change the traditional pockets of geographic strength that the parties have shown? I think some of the fundamentals will hold. How did Scott Brown fare against Martha Coakley in the First Essex Senate District? The numbers please.
The First Essex District has Amesbury, Newburyport, Salisbury, Merrimac, Haverhill, Methuen, North Andover (4 precincts). These numbers are from the 2010 special election. The North Andover numbers are town-wide, not just the precincts in the First Essex District.
Turnout- Scott Brown- Martha Coakley- Other
Amesbury 51% 3480- 57% 2543- 42% 70- 1%
Salisbury 51% 1927- 64% 1061- 35% 42- 1%
Merrimac 62% 1651- 60% 1042- 38% 37- 1%
Newburyport 65% 4174- 49% 4266- 50% 57- 1%
Methuen 49% 9171- 65% 4837- 34% 117- 1%
Haverhill 45% 11069- 60% 7259- 39% 202- 1%
North Andover 60% 7018- 64% 3826- 35% 80- 1%
Total Scott Brown 38,490- 60% Martha Coakley 24,834- 39% Other-605- 1%
Here is the full video of the Senator Scott Brown-Elizabeth Warren debate. Much to take out, but how about the resistance to Simpson-Bowles by Scott Brown, with a deferential nod to the balanced approach of that panel by Elizabeth Warren. In fact I think it would be fair to say that both candidates are opposed to the specific recommendations contained within that report. Is that fair? Judge for yourself.
Suffolk University and pollster David Paleologos have just released polling from the all important swing state of Florida, with Barack Obama holding a very narrow edge in that State. From the Suffolk Press Release.
“On the eve of the first debate, both Barack Obama and Mitt Romney know the importance of each percentage point in a state like Florida,” said David Paleologos, director of the Suffolk University Political Research Center in Boston. Not only are the remaining undecided voters critical, but so are the voters of all the third-party candidates here – and there are many.”
Obama led by a 46% to 43% margin, with 7% undecided. The survey has a margin of error of 4%, leaving this as a very tight race. Minor and third party candidates are pulling about a little more than 3%, which as we learned from the Ralph Nader experience, could be vital.
Libertarian Gary Johnson, Green Party nominee Jill Stein, and Peace and Freedom Party nominee Roseanne Barr were each favored by 1 percent of voters polled. One or more voters, but less than 1 percent, chose Peta Lindsay (Party for Socialism and Liberation), Tom Hoefling (American Independent Party), or Ross C. “Rocky” Anderson (Justice Party of Florida).
I guess we better get ready for some more chad counting in FLA. This is a state where the debates may make enough of an impact to actually tip the balance in favor of one candidate or the other. I would venture to say that we will see some real dollars poured into FLA by both sides in the coming weeks.
Another great job by David Paleologos and Suffolk University.
In a very important U.S. Senate race incumbent Democratic Senator Bill Nelson leads Republican Connie Mack by a 40% to 34% margin. In that race two independent candidates together are showing 5%, another situation where a tight race will be impacted by these candidacies. (Chris Borgia at 4%, Bill Gaylor at 1%) Borgia appears to be a Libertarian, although he is not running as one. Look for some real hard hitting negativity between Nelson and Mack.
Former Maine Governor, and now independent candidate for U.S. Senate, Angus King, has been put under a fusillade of fire from national Republicans looking to knock him off. King has been under attack for his support of wind energy, and some alleged involvement in specific wind projects that received public support. The attacks have had some negative impact, but King started with such a big lead that he continues to hold on. The survey please!
King is still showing 50% support in a three way race, a great number, and one that is below where he was before the Republican barrage of about $2 million in negative ads. Republican Charlie Summers is at 28%, and Democrat Cynthia Dill is at 12%. 10% remain undecided. I think you can chalk this one up folks. The question of where King will caucus is still open, but I believe ultimately he will caucus with the Democrats.
In the Presidential race Barack Obama is crushing Mitt Romney by a 52% to 36% margin, with 9% undecided. You can chalk that one up as well, although Maine splits its electoral votes, awarding two to the statewide winner, and one each to the winner in each of the two Congressional Districts. In the Second Congressional District the Obama lead is only 5%, leaving open the possibility of Mitt Romney gaining one of Maine’s four electoral votes.
A referendum question, which would legalize same sex marriage in Maine, leads by a 57% to 36% margin, with 7% undecided. That looks like a clear win for marriage equality in Maine!
Here is a sample of the Republican attacks on King.
