Category Archives: Economics

2012: The Record (Health Reform)

Over the latter days of 2010 & the early days of 2011, The Political Prescription will break down the issues that will likely shape the 2012 political landscape.

By Kevin Hagler

Perhaps the trickiest part of what the “Davids” (Axelrod and Plouffe) must do in 2011 involves the process of filtering out which accomplishments of President Obama are not only politically safe, but politically strong to tout to the American public in 2012.

Health Care Reform

If health care remains unchallenged overall, the Obama administration will focus mostly on patient protections – the patients’ bill of rights – as well as the politically popular aspects of reform which have already gone into effect or will in 2011:

  • Health Insurers cannot deny children health insurance because of pre-existing conditions.
  • Insurance companies can no longer cut someone when he or she gets sick.
  • Businesses with fewer than 50 employees will get tax credits covering up to 50% of employee premiums.
  • Seniors will get a rebate to fill the so-named “doughnut hole” in Medicare drug coverage, which severely limits prescription medication coverage expenditures over $2,700. As of 2011, 50 percent of the doughnut hole will be filled. Continue reading

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2012: Tax Overhaul

Over the latter days of 2010 & the early days of 2011, The Political Prescription will break down the issues that will likely shape the 2012 political landscape.

By Kevin Hagler

President Obama took a huge hit with his liberal base over extending the Bush tax cuts to those making $250,000 or  even $1M or above. What better way to avoid this topic directly then by broadening the debate to an entire tax overhaul?

The president, in an NPR interview, made clear his idea to reform taxes altogether. “I think we’re going to have to have a conversation over the next year”, the president said. “The idea is simplifying the system, hopefully lowering rates, broadening the base — that’s something that I think most economists think would help us propel economic growth. But it’s a very complicated conversation.”

Using language like “complicated” probably won’t help his proposal politically, but the reality is that this issue may play well for the president and the Democratic party in the end. Part of what Mr. Obama has proposed in the interview already has bipartisan support: Continue reading

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Eggnog Hangover: Monday Reads

By Kevin Hagler

1. Looks like Health care reform “death panels” will be enacted after all. End-of-life counseling, orginally proposed by Ga’s own senator Johnny Isakson, will be enacted through regulation.

2. House GOP plans to amend rules so spending cuts would reduce deficit rather than fund more spending.

3. “Year of the USA”, Goldman Sachs analyst forsees an US economic boom in 2011

4. Joe Miller is but isn’t dropping his case against Lisa Murkowski for Alaska senate seat. Continue reading

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VIDEO: Bernie Sanders’ Filibuster

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Tax Cuts: Another View

By Joel Mendelson

Democrats, liberals and progressives throughout the country are irate that President Obama compromised with Republicans and agreed to extend the Bush-era tax cuts for two years. While I vehemently disagree with the notion that tax cuts should be extended to the wealthiest Americans, what choice could the president do?

Republicans have used obstructionist tactics to such an extent over the last two years that it’s only by miracle (and healthy majorities) that allowed Democrats to pass the stimulus, health care reform and financial reform. If an agreement wasn’t reached and tax cuts were not extended for all Americans, we would see Don’t Ask Don’t Tell (DADT) remain in effect, the START treaty would never see ratification and don’t get me started on the prospects of the DREAM Act passing.
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How are Economists reacting to Obama Tax Cut Deal?

By Kevin Hagler

First off, WaPo economic policy columnist Ezra Klein lists details below:

1) The Bush tax cuts get extended for two years — with one ugly surprise: For the next two years, estates up to $5,000,000 will be protected from the estate tax, and the tax rate for the few estates that are taxed will be 35 percent. … The difference in expected revenue between the 2009 levels and the compromise levels is $10 billion or so.

2) The refundable tax credits are extended: The Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit were all pumped up in the stimulus, but set to expire this year. All of them will be extended. Price tag? $40 billion or so.

3) Unemployment insurance gets extended for 13 months: … In perhaps the most important part of the deal, there’s going to be a 13-month extension at a cost of $56 billion.

4) A 2 percent cut in the payroll taxes paid by employees: This is perhaps the most unexpected part of the compromise. Rather than extending the administration’s Making Work Pay tax credit for two years, which would’ve been worth about $60 billion a year, they’ve agreed to a one-year cut in the payroll taxes paid by employees, which’ll raise $120 billion in 2011. …

5) Business expensing: Remember back in September, when the White House announced a proposal to give businesses two years in which they could deduct 100 percent of the cost of new investments? That’s in the deal, too. The cost of this is a bit complicated — it’s $30 billion over 10 years, but it works by offering huge tax cuts in the next two years and then paying that back over the next eight. … Continue reading

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My Take: Federal Pay Freeze

By Kevin Hagler

Pres. Obama announces pay freeze, lip: cut

So, the title is a bit of a misnomer in that I’m still developing my opinion on the matter. Liberals – and I use that term as an endearing one – have been quick to criticize the administration for proposing this. The left leaning blog, Daily Kos conducted an online poll where respondents overwhelmingly disapproved of the proposal. I was watching the news and frequent CNN-er and ex Clinton aide, Paul Begala mostly criticized Obama for beginning deficit negotiations with what some would consider a liberal concession. This scares liberals because they see this type of political posturing as the reason the health care bill was watered down. The rest of the CNN talking heads agreed that the measure was largely symbolic as it takes up a fraction a percentage of the entire debt.

One of my favorite outspoken, wonky, and semi-frequent guest on the old Sunday show, economist Mark Thoma, criticized the administration on a policy level:

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