Obama Ready to Cave On Bush Tax Cuts

According to Politico, Nancy Pelosi told Obama House Democrats will not back tax cuts for those earning over $250,000. Obama know Reid backs extending all the Bush tax cuts. Obama told Reid, in front of Pelosi, to work on his own tax cut package. Short answer: Obama caved on high end tax cuts that poll badly with the American people.

Tim Geithner and Lawrence Summers were at the meeting with Obama, Pelosi and Reid. Want to take a wild guess on if they support extending the Bush tax cuts for those making above $250,000?

A CBS News poll found 56 percent support letting the tax cuts for $250,000 and above earners expire. A NBC News/Wall Street Journal poll gave respondents four choices. Letting tax cuts for top earners was the most popular choice.

Eliminate all the tax cuts permanently: 10

Eliminate the tax cuts for those earning more than $250,000 per year, but keep them for those earning less than that: 39

Keep in place all the tax cuts for everyone for another year to three years: 23

Keep in place the tax cuts for everyone permanently: 23

This maintains my premise that Obama is not a policy wonk. The deficit commission was merely a bad dog and pony show. Obama used the defict commission so he could make claims of being bipartisan and and wanting to reduce the deficit. Obama's deficit commission reads like a horrible policy paper from the Cato Institute. (I should know since I have forced myself to read too many nutty papers.) Obama can't truly be interested in reducing the deficit if he allows the tax cuts for top earners to continue.

Update: Greg Sargent reports that Steny Hoyer backs holding a vote extending tax cuts for the middle class during the lame duck session. Ways and Means Committee chairman David Camp plans to block a middle class-only tax cut vote. It would be political suicide for Republicans to vote for tax cuts for the rich and then say they are doing this to jump start the economy. House Democrats understand this is good politics. Obama either doesn't understand the politics or silently backs tax cuts for top earners.

Update: this chart created by the Washington Post illustrates the stark differences between the Republican and House Democratic tax proposals. The bigger the dot the bigger the tax cut.

Howard Dean and Chris Van Hollen on the Public Option

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Howard Dean guest hosted for Keith Olbermann. Dean described the Max Baucus compromise bill as "watered down." DCCC Chair Chris Van Hollen discussed the public option with Dean.

DEAN: Chris, I know the House is doing a great job on this. But why haven’t we seen — why haven’t we seen Democrats in the Senate take a stronger bargaining position with the Republicans? Why give away something as fundamental as health care reform as the public option?

VAN HOLLEN: Well, you’re absolutely right, Howard. We’ve got to have a public option in the plan that we send to the president’s desk. We’re all still hoping that the Senate Finance Committee bill will have a public option.

If they don’t, we’re going to press hard. This has got to be in the bill that we send to the president’s desk. We’ve got to create more choice for consumers and more competition for the insurance companies.

I don’t think anyone was surprised to learn that the insurance companies are fighting this. These are the same companies that have seen their profits go through the roof over the last seven years. In fact, if you look at just the top 10 insurance companies, their profits have gone up about 430 percent over the last seven years, while everyone’s income stayed flat and while their premiums were going through the roof.

So, we’ve got to have a public option to create that competition and to give Americans more choice.

DEAN: Some Democrats are saying that there needs to be compromise on the public option in order to get the bill passed. But 72 percent of Americans say they want the choice of a public option. Does that mean that what the American people want is already dead in the Senate?

VAN HOLLEN: No. I certainly hope not. It’s certainly not dead with respect to the bill that we’ll send to the president’s desk.

The American people are exactly right. If you want more choice, you want to bring down premiums, you need that competition. There are parts of the country where the private insurance companies have huge monopoly lock over the markets. We need to provide that competition. As the president said, we need to start keeping these insurance companies honest.

You know you’re getting somewhere when you get a lot of resistance. And as you get closer to making this happen, you get more and more fight from the insurance companies, and we have to stick up for the consumers. And it’s pretty clear that the Republicans support the status quo, and there’s a good reason for that, which is their allies, the insurance industry, that has provided huge amounts of campaign contributions, supports the status quo, with respect to not providing for a public option.

Republicans had 8 years and did nothing to reform health care. The Congressional Budget Office found current entitlement spending is unsustainable.



A CBO letter to Republican Rep. David Camp estimated only 9 million people would switch from private health care to the so-called public option.

In 2016, nearly 3 million people who would be covered under an employment-based plan under current law—and who could be covered by that plan under the proposal—would choose instead to obtain coverage in the exchanges because the employer’s offer would
be deemed unaffordable and they would therefore be eligible to receive subsidies through the exchanges. In addition, some part-time employees, who could receive subsidies via an exchange even though they had an employer’s offer of coverage, would choose to do so. All told, we estimate that, in 2016, about 9 million people who would otherwise have had employer coverage would not be enrolled in an employment-based plan under the proposal.

The CBO estmates public health insurance will 10 percent lower than private insurance. What isn't making news is the letter notes hospitals spent $35 billion for uninsured care. The uninsured won't seek medical care until they need to visit an emergency room. From a humanitarian perspective: this is horrible policy. The cost factor will increase with more uninsured people. Hospitals will be forced to pass on the expenses to patients with health insurance. The status quo is increased cost and more uninsured people. Excuse me if private insurance companies aren't my first concern.