February 26, 2021

Senate Democrats Make Their Move on Budget Deal

The Democratic proposal would establish a 30-percent minimum tax rate on incomes over $1 million to raise about $54 billion over 10 years. It would raise another $1 billion by subjecting tar sands oil to a tax to pay for oil-spill cleanups and by ending a business tax deduction for the cost of moving equipment overseas.

The remaining $55 billion would come from $27.5 billion in defense cuts from 2015 to 2021 and $27.5 billion in farm-subsidy cuts.

The legislation is more a bargaining position than a solution. Republicans have said they will not accept any new taxes in a deal to head off the so-called sequester – across-the-board cuts to defense and domestic programs of 5 percent to 8 percent and totaling about $1 trillion over 10 years. But Senate Democratic leaders said Thursday that their party must rally support around an alternative to try to move negotiations forward.

“This bill is an important chess piece,” said Senator Charles E. Schumer of New York, the No. 3 Democrat in the Senate.

Speaker John A. Boehner on Thursday repeated his demand that the Senate take the first steps to replace the spending cuts before the House considers its move, but no one predicted that the Senate Democrats’ proposal would rally the bipartisan support needed to overcome a near-certain Republican filibuster and reach the House.

“I would hope that we can get to 51 votes, and that majority would rule,” said Senator Barbara Mikulski, Democrat of Maryland, the chairwoman of the Senate Appropriations Committee. “I’m confident we will have the majority – if not the totality – of the Democratic caucus.”

Senate Democrats emerged from a protracted lunch meeting over the plan voicing only grudging support. Senator Max Baucus of Montana, the chairman of the tax-writing Finance Committee, said he worried that wringing savings from farm subsidies now instead of in a broad farm bill would make it more difficult to pass an overhaul of agricultural programs that has been languishing for nearly a year.

Senators Tom Harkin, Democrat of Iowa, and Bernie Sanders, independent of Vermont, decried the 50-50 mix of cuts and taxes, after Democrats have swallowed far more spending cuts than tax increases over two years of deficit-reduction efforts.

Republicans dismissed the proposal as a worthless gimmick.

“This is not a solution — even they know it can’t pass, that’s the idea,” said Senator Mitch McConnell of Kentucky, the Republican leader. “It’s a political stunt.”

The White House praised the package. Jay Carney, the press secretary, called it a “balanced plan to avoid across the board budget cuts that will hurt kids, seniors, and our men and women in uniform.”

“Republicans in Congress face a simple choice,” he added. “Do they protect investments in education, health care and national defense, or do they continue to prioritize and protect tax loopholes that benefit the very few at the expense of middle and working class Americans?”

As the cuts approach, warnings of disaster are growing increasingly dire. The Senate Appropriations Committee released a barrage of letters from agencies spelling out how the cuts would be meted out: 600,000 low-income women and children dropped from federal nutrition programs; meat and poultry plants forced to close because of furloughed federal inspectors; deep cuts to poor school systems that rely most heavily on federal assistance; delayed permits for oil and gas production; and shorter seasons, reduced operating hours and possible park closings in the national park system. Job losses could reach 750,000 this year, said Representative Chris Van Hollen, Democrat of Maryland.

While Republicans and Democrats agree the cuts would be destructive, neither side seems ready to negotiate a solution. Senator Harry Reid of Nevada, the majority leader, reached out to Mr. Boehner on Thursday. Mr. Boehner said he told Mr. Reid what he has been saying publicly: the House will look at what the Senate can produce.

“This sequester was the president’s idea,” Mr. Boehner said. “His party needs to follow through on their plans to replace it.”

Article source: http://www.nytimes.com/2013/02/15/us/politics/senate-democrats-make-their-move-on-budget-deal.html?partner=rss&emc=rss

House Takes On Fiscal Cliff

House Republicans were planning to meet at 1 p.m. to discuss the Senate legislation, cobbled together after furious negotiations between Vice President Joseph R. Biden Jr. and the Republican Senate leader, Mitch McConnell, to avert automatic tax increases for all but the wealthiest Americans and put off, for two months, large cuts to the Pentagon and other areas of government.

Representative Nancy Pelosi of California, the House Democratic leader, said she would also present the plan to House Democrats and Mr. Biden, who helped sell the deal to Senate Democrats on Monday night, was set to meet with members of his party in the House just after noon.

With just two days to go before a new Congress convenes, the House has essentially three choices: reject the bill, pass it as written by the Senate after what is certain to be a robust, even rancorous debate, or amend the bill and quickly return it across the rotunda to the Senate. Should the House choose to amend the measure, it would almost certainly imperil its chances of becoming law before the new Congress convenes. The Senate compromise, which enjoyed wide bipartisan support, was so hard fought and senators do not anticipate taking another vote on it.

Any failure to pass the measure before the 112th Congress ends as of noon Thursday would require the process to start over in the new 113th Congress, meaning the Senate would have to vote again with a changed membership due the departure of several veteran lawmakers and the arrival of newcomers from both parties as a result of victories in the November elections.

But the strong, bipartisan 89-to-8 vote in the Senate about 2 a.m. on Tuesday will put strong pressure on the House to approve the legislation since a defeat would essentially leave the House responsible for a steep series of tax increases and spending cuts that some economists warn could send the nation back into a recession.

Yet it was clear Tuesday morning that many House Republicans were disenchanted with the plan, which, while containing many concessions that angered Democrats, still favors the latter party’s priorities and imposes a tax increase on the wealthiest Americans.

“I am halfway through reading it and haven’t found the cuts yet,” said Representative Trey Gowdy of South Carolina, who generally votes against budget bills. “It’s part medicinal, part panacea, and part treating the symptoms but not the underlying pathology.”

Democrats have their own issues with the measure due to what they see as too many concessions on taxes, making it apparent some combination of Democrats and Republicans will have to come together behind the measure if it is too clear the House and be sent to President Obama for his signature.

Speaker John A. Boehner and Representative Eric Cantor of Virginia, the House majority leader, arrived at the Capitol early Tuesday to begin working, but a spokesman for Mr. Cantor, Doug Heye, said no decision had been made on how to proceed.

Article source: http://www.nytimes.com/2013/01/02/us/politics/house-takes-on-fiscal-cliff.html?partner=rss&emc=rss

Senate Republican Leader Suggests a Payroll Tax Deal

Under a deal reached between House and Senate leaders — which Speaker John A. Boehner was presenting to the rank and file in an evening conference call — House members would accept the two-month extension of a payroll tax holiday and unemployment benefits approved by the Senate last Saturday, while the Senate would appoint members of a House-Senate conference committee to negotiate legislation to extend both benefits through 2012.

House Republicans — who rejected an almost identical deal on Tuesday on the House floor — caved under the political rubble that accumulated over the week, much of it from members of their own party, who worried the blockade would do serious damage to the party brand heading into an election year. The new deal makes minor adjustments to make it easier for small businesses with temporary new caps on the wages that are subject to the tax relief.

The agreement ended a partisan fight that threatened to keep Congress — and President Obama — in town through Christmas and was just the latest of the fierce fights between House conservatives, the president and the Democratic-controlled Senate. But this one seemed to end in a clear victory for Mr. Obama and the Democrats, at least for now.

The push to find a resolution was touched off Thursday by Senator Mitch McConnell of Kentucky, the Republican leader, who had negotiated the two-month extension and called on the House to accept a temporary continuation of the tax hike and extended unemployment pay as long as Senate Democrats committed to opening negotiations quickly over a yearlong agreement.

“House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms,” Mr. McConnell said in a prepared statement. “We can and should do both. Working Americans have suffered enough from the president’s failed economic policies and shouldn’t face the uncertainty of a New Year’s Day tax hike.”

Just hours after Mr. McConnell released his statement, House freshmen began to crumble.

“I’m calling on G.O.P. leadership to immediately bring up the Senate’s two-month extension for an up or down vote,” said Representative Sean Duffy of Wisconsin, who voted against the deal earlier in the week. “Middle-class families deserve a Congress that will rise above the squabbling and ensure their taxes don’t go up right after Christmas.”

On the Web site of Representative Rick Crawford of Arkansas were two statements, one from Tuesday proclaiming his vote against a Senate bill, and a new message on Thursday in a letter to Mr. Boehner. “We are now in a position that requires all options to be on the table, that requires Republicans to not only demand a willingness to compromise, but to offer it as well,” Mr. Crawford wrote in the letter to Mr. Boehner. “More often than not an ‘all or nothing’ attitude produces nothing.”

Mr. McConnell’s statement gave a lifeline of sorts to House Republicans by opening the door to a change in the length of the extension — some Republicans say a three-month fix would be easier for employers to handle — that sought to find a face-saving way out of the conflict. Many Republicans had acknowledged it had the capacity to harm their party in the opening days of an election year that would pick a president and decide control of the divided Congress. Many Senate Republicans and other party members expressed deepening worry that the fight was whittling away at their chance to take back the Senate, remove Mr. Obama and even hold their significant majority in the House.

At the same time, some of senior members of the Republican Party — ranging from Senator John McCain of Arizona to prominent analysts like Karl Rove — see the possibility of a Republican-controlled Congress next year and even a Republican in the White House, and are dismayed by what they see as the suicidal tendencies of the newest members of the House, who they feel should put the party’s endurance through 2012 over perfect legislative goals.

“I don’t care about my re-election effort,” said Representative Tom Reed of New York, a conferee appointed by Mr. Boehner to negotiate a deal. “I came here to do what’s right for America.”

The deal also offered Mr. Boehner something that has often eluded him this year: a sense of consequences for his rowdy freshmen members who have helped Republicans push their cost-cutting agenda further than the party could have ever hoped, but with high cost to how it is perceived.

Earlier in the day, Mr. Obama was flanked by 16 unidentified Americans who had responded to a White House campaign soliciting responses to its Web site, Twitter and Facebook about what they would sacrifice if their take-home pay was reduced by $40 a week, the average weekly tax break for a family making $50,000 a year.

Jackie Calmes contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=8870562dcdf2250f8bb0d259a80f3805

Democrats See Advantage in Payroll Tax Debate

With Mr. Obama leading the charge in Washington and political swing states, Senate Democrats have put proudly antitax Republicans in the position of opposing a tax cut for more than 160 million mostly middle-class Americans because they object that it includes a tax on about 350,000 people, those with more than $1 million in annual taxable income.

Votes late on Thursday left the issue at an impasse. The Senate voted 51 to 49 for Democrats’ measure to further reduce Social Security payroll taxes next year for both workers and employers and to impose the surtax, but the tally was short of the 60 votes needed. One moderate Republican, Senator Susan Collins of Maine, supported it. A Republican alternative, which would have extended the current more modest tax cut and slashed the federal payroll to pay for it, was rejected 78 to 20, with more than half of Republicans opposed.

The maneuvering suggests that the parties will agree to some continued relief before the current payroll tax cut expires on Dec. 31. But how much of a cut and how — or if — it will be paid for remain to be settled, with some in both parties saying that the tax break would further weaken the Social Security system’s financing.

But politically, Democrats believe that they have already won this latest skirmish in the message wars. And some exasperated Republicans acknowledge that they are losing the exchange; party leaders have worked this week to bring the rank and file in line behind the tax cut.

Democrats have concluded from the payroll tax debate that Republicans are vulnerable over their opposition to any new taxes on the wealthy in a way they were not when Democrats proposed such taxes for deficit reduction. So they have reprised an old message — that Democrats fight for the middle class, Republicans for the rich — and are likely to sound it through 2012, in hopes of blunting the headwinds they face as unemployment remains high.

“Tonight, Senate Republicans chose to raise taxes on nearly 160 million hard-working Americans because they refused to ask a few hundred thousand millionaires and billionaires to pay their fair share,” Mr. Obama said in a statement after the first Senate vote.

It was the same message he delivered on Wednesday, in anticipation of the Senate action, both in speeches to a crowd in blue-collar Scranton, Pa., and later to affluent donors in New York. In Scranton, speaking as if to Republicans, he asked, “Are you willing to fight as hard for middle-class families as you do for those who are most fortunate?  What’s it going to be?”

Mr. Obama, in setting this debate in motion in September, when he introduced his job-creation plan, has tapped into the widespread sense of income inequality — fighting for “the 99 percent” — that gave rise to the Occupy Wall Street movement. But Democrats would not be in their current strong position but for the fact that Republicans, for the first time in memory, contested a tax cut and then insisted that the reductions be paid for.

“This would have been unheard of even six months ago,” said Senator Charles E. Schumer, Democrat of New York. “But we are changing the debate, and the public is with us.”

Mr. Schumer read to reporters from RedState.com, a Web site popular among conservatives, where a blogger, Erick Erickson, wrote, “I never thought I would see the day, but Democrats are outmaneuvering Republicans on a tax cut.”

“Like clockwork, the G.O.P. is throwing the ball into the Democrats’ basket for them,” Mr. Erickson said.

Republican leaders’ struggle this week to find a strategy that could unite their party reflected the political bind it is in. Nearly 7 in 10 Americans said the policies of Republicans in Congress favored the rich, a New York Times/CBS News poll found in October.

In a memo to Senate Democrats last week, the party pollster Geoff Garin cited other recent surveys to argue that concern about income inequality and the perceived decline of the middle class is trumping the antigovernment fervor that defined last year’s Congressional midterm election and allowed Republicans to take control of the House. He said that sets up a 2012 election that is fundamentally different.

Robert Pear and Jennifer Steinhauer contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=b5d23beec96f69c57ad03966536d2bb1

Dow Edges Up After Positive Sign on Jobs

A strong report on jobs sent Wall Street slightly higher on Thursday even as the stalemate continued in Washington over the debt ceiling.

The government reported that first-time applications for state unemployment benefits fell to the lowest level in four months, a sign that employers were laying off fewer workers. The Labor Department said applications fell to a seasonally adjusted 398,000.

The positive news on jobs sent the Dow Jones industrial average up 21.80 points, or 0.18 percent, to 12,324.35, after a 198-point decline on Wednesday. The Standard Poor’s 500-stock index rose 1.48 points, or 0.11 percent, to 1,306.37. The Nasdaq, which lost 2.7 percent on Wednesday, gained 0.83 point, to 2,765.62.

Stocks have been falling since Friday as an Aug. 2 deadline approaches for raising the borrowing limit for the United States government.

On Thursday, House Republicans prepared a vote on a new plan to avoid a debt default. That legislation faced steep opposition from Senate Democrats, and the White House has threatened to veto the proposal.

With the deadline for a deal just five days away, investors are becoming more fearful that the government may lose its triple-A credit rating. That would raise interest rates and slow down an economy that is still recovering from the worst recession in decades.

After the Dow’s sharp fall Wednesday, its biggest one-day drop since early June, it was on track for its worst weekly decline since August 2010. The Dow was also about 4 percent below the 2011 high it reached on April 29.

Earnings results have been a relative bright spot. DuPont rose in premarket trading after the company said second-quarter earnings had increased 5 percent on higher revenue. The company also raised its earnings outlook for the year.

But Exxon Mobil, the largest publicly traded oil company, declined after as earnings fell below analysts’ estimates.

Bond prices rose, pushing yields lower. The yield on the 10-year Treasury note fell to 2.95 percent from 2.97 percent late on Wednesday.

Article source: http://feeds.nytimes.com/click.phdo?i=7ba07b896d3d3be61df8e2e68585c482

You’re the Boss: S.B.A. Spared in 2011 Spending Deal

The Agenda

While many federal agencies will take a haircut in the spending bill negotiated last weekend between Senate Democrats and House Republicans — total nonmilitary discretionary spending will be cut by 7 to 8 percent from 2010 levels — the Small Business Administration has emerged from the negotiations largely intact.

The bill trims 0.2 percent from every nonmilitary discretionary account, including those that finance the S.B.A. But it also aims at specific programs with deeper cuts, and here the S.B.A. was effectively spared. In February, the House voted to cut $25 million, or about 6 percent, from the agency’s 2011 salaries and expenses budget, which pays for much of its small-business mission, including the counseling grants that the agency passes on to other organizations (such as Score and the small business development centers). In the end, however, House and Senate negotiators restored the appropriation to $433 million. The business loan guarantee programs are financed through a separate account, which also retained its 2010 funding of $236 million.

Perhaps House Republicans are saving their fire for the battle over the 2012 budget. Last week, Paul Ryan, chairman of the Budget Committee, proposed a budget outline with steep cuts in domestic spending over the next 10 years, and in March, the House Small Business Committee suggested cutting $100 million from what the S.B.A. will receive this year. The Obama administration, by contrast, proposes to strip $28 million from the agency in 2012.

Article source: http://feeds.nytimes.com/click.phdo?i=e2198f7e574d7a5af8189b0099bf5317

Court Rejects Suit on Network Neutrality Rules

WASHINGTON — A federal appeals court on Monday rejected as “premature” a lawsuit by Verizon and MetroPCS challenging the Federal Communications Commission’s pending rules aimed at keeping Internet service providers from blocking access to certain Web sites or applications.

While the decision, by the United States Court of Appeals for the District of Columbia circuit, is a first-round victory for the F.C.C. and its chairman, Julius Genachowski, the real battle over the agency’s attempt to regulate broadband providers has barely begun.

Several broadband companies, and some consumer advocacy and public interest groups, are likely to return to court this year to challenge aspects of the rules. Edward S. McFadden, a Verizon spokesman, said Monday that the company intended to refile its lawsuit this year.

The House will take up a joint resolution condemning the new Internet access rules this week. Though the House is likely to pass the resolution prohibiting the F.C.C. from putting the new rules into effect, it is doubtful that the resolution will go much further because many Senate Democrats and the Obama administration support the rules.

The Verizon lawsuit was dismissed as premature, the court said, because federal regulations dictate that a challenge to new F.C.C. rules must come within 10 days after a new rule is published in the Federal Register.

That publication has not taken place, although the F.C.C. approved its rules in December, because the regulations must be reviewed for compliance with the Paperwork Reduction Act. That F.C.C. review, which includes a 60-day public comment period, will be completed this month. Then, the Office of Management and Budget will conduct a review, with a 30-day comment period, before the rules are published.

A commission spokesman, Robert Kenny, said the agency was pleased by the court’s decision and believed its policy “preserves Internet freedom and openness and strikes the right balance for consumers and businesses across America.”

The new regulations, which the commission calls its Open Internet Order, are commonly known as net neutrality rules. They prohibit companies providing broadband Internet service to consumers from discriminating in granting access by customers to content providers.

Once the regulations are published in the Federal Register, any legal challenge filed in 10 days is entered in a lottery to determine the legal venue.

Verizon and MetroPCS tried to sidestep that provision by contending that the rules modified their licenses to operate wireless broadband networks. So, they said, the dispute was a licensing issue, not an appeal of a new rule, a position the court rejected.

Article source: http://feeds.nytimes.com/click.phdo?i=a2fb32337f554b5c41d56d66d553a528