August 14, 2008
The thing about a donut hole is that it is empty. There is nothing. And that, it seems, is what is left of Barack Obama's plan to fix Social Security. The Obama people now tell us that his proposal, which is built on a tax hike for those earning more than $250,000, won't take effect until at least 2018. You heard right: 2018.
August 12, 2008
After I posted a tongue-in-cheek suggestion that, if he is elected president, Barack Obama should hire Doug Holz-Eakin to be his budget director, self-styled progressives have gone nuts. The Obamaites are up-in-arms because Holtz-Eakin happens to be John McCain's chief economic adviser. Could I have struck a nerve?
August 7, 2008
If Barack Obama gets elected President, the first thing he should do is hire Doug Holtz-Eakin to be his budget director. A highly-respected non-partisan budget wonk, who is leaning Obama’s way in the election, threw out this seemingly crazy idea at lunch the other day. And the more I thought about it, the more sense it made.
August 5, 2008
Unlike other credits, the new one is really a 15 year interest-free loan. Qualifying buyers will get a refundable credit of the smaller of 10 percent of their purchase price or $7,500 for homes bought between April 2008 and June 30, 2009. Because they don’t get the credit until they file a tax return—and not when they buy the house—it’s unclear how much the cash windfall will help with down payments—which presumably was the whole idea. And interest-free doesn’t mean free: they must pay the money back to the government over 15 years.
July 31, 2008
Liberal bloggers have taken to ganging up on the Blue Dogs—conservative Democrats who tend to go their own way on fiscal and foreign policy issues. Smelling victory in November, some on the left would like to find a way to take out these lawmakers, who mostly represent southern and midwestern swing districts.
July 30, 2008
For a brief 48 hours, it looked as if John McCain was courageous enough to say something sensible about tax policy—and as a result was immediately attacked by both the right and the left. Today’s Wall Street Journal reported disapprovingly that McCain would consider payroll taxes as a way to bolster Social Security’s finances.“Mr. Stephanopoulos [on ABC’s This Week] pressed, ‘So that means payroll tax increases are on the table, as well?’ Here came the words that have caused the McCain campaign well deserved grief: ‘There is nothing that's off the table. I have my positions, and I'll articulate them. But nothing's off the table.’”
July 29, 2008
To paraphrase the oily Captain Renault of Casablanca fame, we in Washington are shocked, shocked to find that deficits are going on here. To listen to the cries of outrage and dismay, one might think the Bush Administration’s latest projection of nearly $400 billion in red ink for the fiscal year ending on Sept. 30, and almost $500 billion for next year was unexpected.
July 25, 2008
A questioner at our forum on the candidates’ tax plans asked about the portion of Senator Obama’s tax proposals that would go to households with no tax liability. I did not have the answer then, but Jeff Rohaly has since crunched the numbers. He estimates that the refundable portion of tax credits (other than for healthcare) would increase by $648 billion over ten years in the Obama plan. The new credits would also increase the percentage of households that do not owe income tax in 2009 from 38 percent under current law to 48 percent in the proposal, although that percentage will decline over time as real incomes grow.
July 24, 2008
Barack Obama’s fiscal policy can be summarized pretty simply: Cut taxes for low- and middle-class Americans, boost spending for education, health care, and alternative energy, and pay for much of it raising taxes on the rich. That’s not the only way he’d finance his ambitious plans, of course—he’d also have to borrow $3 trillion and get some money from ending the war in Iraq—but he hopes to generate nearly $300 billion over the next decade just from rolling back the Bush tax rate cuts on high-bracket taxpayers.
July 23, 2008
TPC sponsored a fascinating debate today between John McCain’s top policy adviser, Doug Holtz-Eakin, and Barack Obama’s senior economic adviser, Austan Goolsbee. More than anything, I was struck by how much time each spent criticizing the other guy’s fiscal plan rather than promoting their own.