Today Obama met with Speaker of the House Nancy Pelosi and this week he'll meet with democrats and republicans on the economic package. He'll give an economic speech on Thursday. See photos here. He also met with his economic team today. Swift middle class tax cuts and incentives to business are the priority. Present at the meeting, according to The Hill, were:
Chief of Staff Rahm Emanuel, Treasury Secretary-nominee Timothy Geithner, chief economic adviser Lawrence Summers, energy czar Carol Browner, HHS Secretary-nominee Tom Daschle and Ron Klain, incoming chief of staff to Vice President-elect Biden.
Also present were Christina Romer, Obama’s chairwoman of the council economic affairs; Melody Barnes, the head of Obama's domestic policy council; and Peter Orszag, Obama’s incoming director of the Office of Management and Budget.
Here are some of the highlights. For the full transcript: CQ Politics:
SPEAKER: PRESIDENT-ELECT BARACK OBAMA
[*] OBAMA: Well, thanks for taking the time to come in for a moment.
You know, this is the core of my economic team, and the message of our meeting today is one that comes as no surprise to most Americans, and that is we are in a very difficult spot. The economy is bad. The situation is getting worse.
Last week, we learned that manufacturing had hit a 20-year low. On Friday, we’re going to get the final jobs report from this year, and every indication is that we will have lost in 2008 more jobs than at any time since World War II.
It’s clear that we have to act and we have to act now to address this crisis and break the momentum of the recession or the next few years could be dramatically worse. That’s the message that I delivered to Speaker Pelosi this morning. I will be meeting with Harry Reid and with the bipartisan leadership group this afternoon.
And the most important message today is that the situation is getting worse, we’ve got to act boldly, and we’ve got to act swiftly. We cannot delay.
....
Over the last few weeks, our economic crisis has only grown deeper. Two million Americans have now lost their jobs over the last year. We have a substantial number -- in fact, Christina Romer, our economist from the Council of Economic Advisers, indicates to me that in addition to the 2 million who’ve lost jobs, you’ve got 2.8 million who have moved from full-time work to part-time work.
So when you start counting in people who are underemployed, then the situation is very dire for American families.
Again, manufacturing’s hit a 28-year low.
OBAMA: Across America, millions of Americans are struggling with rising costs, growing debts, concerns about home foreclosure, a deepening sense of unease.
When I last met with my team, I asked them to continue their work on an American recovery and reinvestment plan that would not only create jobs in the short term, but also spur economic growth and lay the foundation for a sustained competitiveness in this global economy over the long term.
....One of the things that I’ve emphasized to my team -- and one of the things that I’ve emphasized to congressional leadership and will emphasize again today -- is that not only do we have to act boldly, swiftly and with a sufficient magnitude to make a difference, but we’ve also got to do things in a new way.
It’s not going to be sufficient for us just to fall back into the old Washington ways and simply throw money at the problem. We need to demand vigorous oversight; we need to have strict accountability in terms of how the -- the recovery and reinvestment plan operates. The American people have a right to know how every dime of their money is spent, and that is going to be built into the plan, so that everybody understands what is being done in order to address this crisis.....
So I’m looking forward to meeting with both the Democrats and Republicans this afternoon. My expectation is that they will share the same sense of urgency that I do, that we are going to move quickly, that we’re not going to get bogged down in a lot of old-style politics on either side. OBAMA: There’s not going to be a lot of finger-pointing or posturing. The American people need action now. That’s what I intend to provide as president of the United States. So with that, let me take a couple questions. QUESTION: How fast does this plan need to move to passage? And in moving swiftly and boldly, are you concerned at all about sacrificing transparency and a full examination of the process? And also, if you don’t mind, could you also talk about the extent to which the tax cut part of this plan is political (OFF-MIKE) getting it passed? OBAMA: Well, let take the second question first. Some of you, at least, were following the campaign. And for the last two years, I’ve talked about the need for middle-class tax cuts. So the notion that me wanting to include relief for working families in this plan is somehow a political ploy, when this is -- was the centerpiece of my economic plan, for the last two years, doesn’t make too much sense. What -- in a bad situation, there is a happy convergence between what I had pledged during the campaign and what’s required for the economy, right now, to put more money into the pockets of ordinary Americans who are more insecure about their jobs, who are continuing to see rising costs in an area like health care, who are struggling to make ends meet. But, you know, we think it is very important to have a balanced recovery and reinvestment package. Part of it is going to be addressing consumers and making sure they’ve got money in their pockets. Part of it is to provide incentives for businesses so that they start investing in plants and equipment that ultimately leads to jobs. Part of it is going to be investing in the kinds of job-creating growth industries of the future, whether it’s health I.T., whether it’s energy, that assure economic competitiveness over the long term. OBAMA: So I wouldn’t separate any of these parts. They’re all of a piece. And, as far as your first question, we are confident that we can accomplish unprecedented transparency, even as we move this package forward. Not only will Congress know exactly what’s in this bill, but we’re exploring steps, for example, like putting on a Web site very detailed information about all the projects that are taking place, what kind of impact we expect them to have, what kinds of job growth we hope to generate as a consequence of any of the discrete items that we are -- that we’re putting forward. QUESTION: Good afternoon, sir. To what extent has the violence in the Middle East distracted your team on the economic plan? And is the deadline for your stimulus -- are you still hoping for -- has it slipped to February? (CROSSTALK) OBAMA: Well, as I said before, I strongly believe that a president or a president-elect or his team should be able to do more than one thing at a time. And so, obviously, international affairs are of deep concern. With the situation in Gaza, I’ve been getting briefed every day. I’ve had consistent conversations with members of the current administration about what’s taking place. That will continue. I will continue to insist that when it comes to foreign affairs, it is particularly important to adhere to the principle of one president at a time, because there are delicate negotiations taking place right now, and we can’t have two voices coming out of the United States when you have so much at stake. With respect to the timetable for the economic recovery and reinvestment plan, we are going to do most of this work this month. OBAMA: And, you know, we’re not waiting. The reason I’m here today is that we are going to present our latest ideas to Congress. We expect them to begin this week on this process. And, you know, I expect to sign a bill to create 3 million jobs for the American people shortly after I get inaugurated. QUESTION: Sir, what do you mean by shortly after? (LAUGHTER) OBAMA: Well, look, there are only so many days in the legislative process, and it’s going to take some time, even on an expedited schedule, to get a bill passed and on my desk. But we anticipate that by the end of January or the first week in February we have gotten the bulk of this done. STAFF: Thanks, guys. We got to get to the Hill. OBAMA: All right. Thank you.
Everybody has to pay taxes for schools and roads and all that.
The question is who should pay more? Should the people who earn $40K, $50K, $60K pay more or should the person making $250K and higher pay more?
McCain supporters (and all republicans) believe, like Bush, that the people and corporations making beau coup bucks should pay the least taxes. The logic is they create the jobs for the rest of us and that they earn their wealth, therefore they should pay less in taxes. They believe the more money they make, the more they should keep.
That's what I call greed. Why should the middle class pay a disproportionately higher amount of taxes? Not everybody can be a business owner.
What have the wealthy corporations done with their tax breaks? It hasn't benefited the economy as a whole as far as I can tell. Take a look around.
The Bush-McCain tax cuts aren't really for small businesses, as McCain touts. They're for big business.
But McCain can't campaign on that. He can't say: I'm going to decrease taxes for big business! Can you imagine how that would go over?
People would see through that, so he pretends that he's campaigning for small business, so the average Joe in Pennsylvania is impressed or hoodwinked, depending on how you look at it. The majority of small businesses don't make more than $250K.
Obama wants the tax structure to be fair so that the middle class can catch up. Incomes have gone down while the price of everything has gone up. Bush's tax structure has helped create a bigger divide between those who hold all the wealth and the rest of us.
McCain wants to extend the Bush tax cuts and then some. Republicans believe that the so-called job creators trickle down the wealth, therefore it's better that they get reduced taxes so that they can create more jobs.
The other argument is that they deserve reduced taxes because they earned more wealth. They worked hard.
Doesn't the person making $50K earn it too? Don't they work as hard? Here is a side by side comparison of Obama and McCain's tax plans and what they mean to your salary. CNN does a fact check on McCain running around saying Obama wants to take from the rich and give to the poor.
But that's not what it is. It's realigning the tax structure so that it's fair, so that the middle class can keep more of their money.
This is what Obama means when he says spread the wealth around. That's a nuance lost on many who'd rather cry socialism or communism, which is not what it is. When the radical right cry Socialist! Liberal! Communist! it's all part of the plan to paint Obama as the unAmerican scary guy.
CNN: Obama explained his tax plan during the roughly five-minute exchange — telling Wurzelbacher that the tax rate on the portion of his income that was more than $250,000 would be increased from 36 percent to 39 percent. But he also mentioned that his plan includes a 50 percent small-business tax credit for health care and a proposal to eliminate the capital-gains tax for small businesses that increase in value. Obama said his tax plan, which he said focuses on bigger breaks for people making lower incomes, would be good for the economy. "If you've got a plumbing business, you're going to be better off if you've got a whole bunch of customers who can afford to hire you," he said. "Right now, everybody's so pinched that business is bad for everybody. And I think when you spread the wealth around, it's good for everybody."
Wurzelbacher said, "The reason I ask you about the American Dream, I mean I've worked hard. I'm a plumber. I work 10, 12 hours a day and I'm buying this company and I'm going to continue working that way. … I'm getting taxed more and more while fulfilling the American Dream."
In an interview with CNN on Thursday, October 16, Wurzelbacher said he had misunderstood Obama's plan and that the company he wants to buy makes well less than $250,000 a year — which Obama says means his taxes would not be increased.
The Verdict: Misleading. McCain's remark was an oversimplification of a five-minute-long conversation. Obama replied in great detail about his tax plan, and the "spread the wealth" remark was one small part of the conversation.
How much of a tax cut will you get under an Obama administration? This is a brilliant way to illustrate what Obama's tax plan means. The calculator was created by Alchemy Today. This neato calculator by way of Daily Kos.
Update: Video below. This one is a goodie. It's enlightening. Now I see why rich folk are running scared. A preview of tonight's conversation with Bill O'Reilly. I'll post video when it's up.
Swamp: Obama, who proposes higher taxes for the wealthiest Americans - while promising that 95 percent of taxpayers will see tax cuts under his plans - maintains that more revenue is needed to support health care for more Americans, help with college costs and start to pay down an astronomical national debt (about $10 trillion.)
"What I believe is, is that there are certain things we have got to do,'' Obama says in the installment of his interview for The O'Reilly Factor airing at 8 pm EDT this evening - the series started last week and continues Tuesday and Wednesday. "And we have got to help people who are...who have a tough time affording college, so they can benefit like we have benefited from this great country.
As a newbie to politics, thanks to Barack Obama, this is one of the things that confounds me: Politicians can tell big bold lies. Truth doesn't seem to matter. The more people hear a lie, the more they believe it as truth -- that's also interesting. In polls, people still believe Obama's plan would result in higher taxes. It will if you're among the richest 1%. The rest of us get a tax cut.
WaPo: Obama is not proposing to raise taxes for most Americans. To the contrary, he would triple the earned-income tax credit for low-wage earners, increasing work incentives at the bottom. He would cut taxes on people in the middle -- indeed, he would do so more aggressively than McCain would. It is only the wealthiest Americans who would face higher tax bills under Obama. According to the nonpartisan Tax Policy Center, Obama's plan would require the richest 1 percent of Americans to sacrifice a modest 1.5 percent of their after-tax income in 2012. By contrast, no-sacrifice McCain would award America's elite a 9.5 percent increase.
If you don't make more than $250,000, this doesn't affect you:
WSJ: Sen. Obama outlined a plan Thursday to raise tax rates on capital gains and dividend income from 15% to 20% for individuals and families making more than $200,000 and $250,000, respectively. He also detailed a plan to levy payroll taxes on earnings above $250,000 at a rate between 2% and 4%, though that increase wouldn't occur for at least a decade. Right now, payroll taxes, used to fund retirement benefits, are levied on income up to $102,000.
Jason Furman, Sen. Obama's economic-policy director, said the plan would cut taxes to less than 18.2% of gross domestic product. "That's lower than the level of taxes when Ronald Reagan was president," he said.
For more details on Obama's middle class tax cuts, see this post.
This is written by Jason Furman and Austan Goolsbee, economic policy director and senior economic adviser at Obama for America.
WSJ: Both candidates for president have proposed tax plans. But they are starkly different in their approaches and their economic impact. Sen. Obama is focused on cutting taxes for middle-class families and small businesses, and investing in key areas like health, innovation and education. He would do this while cutting unnecessary spending, paying for his proposals and bringing down the budget deficit.
In contrast, John McCain offers what would essentially be a third Bush term, with his economic speeches outlining $3.4 trillion of tax cuts over 10 years beyond what President Bush has already proposed and geared even more to high-income earners. The McCain plan would lead to deficits the likes of which we have never seen in this country. It would take money from the middle class and from future generations so that the wealthy can live better today.
Sen. Obama believes a focus on the middle class is appropriate in the wake of the first economic expansion on record where the typical family's income fell by almost $1,000. The Obama plan would cut taxes for 95% of workers and their families with a tax cut of $500 for workers or $1,000 for working couples. In addition, Sen. Obama is proposing tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth. Read it all.
