The rumored grand bargain would cost the economy about half a million jobs in 2013
Are you ready for a grand bargain? A deficit hawk party! Yes? No? Maybe? (Is this John Boehner?).
With the deadline for the fiscal cliff -- which is really more of a slope -- looming, President Obama and House Republicans have reportedly come close on an agreement that would kick most of the fiscal can. Well, they did for a few hours at least. It didn't take long for Boehner to walk back his support for the plan, but that hardly means it's dead. If there is a grand-ish bargain to be had, it will probably look something like this latest iteration of a deal.
As Ezra Klein reported, the deal comes in three parts: revenue, cuts, and stimulus. Let's break it down, and then break down what it means for jobs in the coming year.
REVENUE. Let the Bush tax cuts expire for households with adjusted gross incomes of $400,000 or more, and limit the value of itemized deductions to 28 percent. In other words, set tax rates for the top 1 percent back to where they were under President Clinton, and stop richer households from taking bigger deductions than middle-class households. All told, it raises a little more than $1 trillion in revenue over the next decade relative to a world where all of the Bush tax cuts continue. As Paul Krugman points out, it's unclear whether this includes the higher taxes on capital gains and dividends scheduled to kick in on January 1, 2013 -- on top of the 3.8 percent Obamacare surtax on capital gains.
Taxes would also go up from switching to chained CPI. As my colleague Derek Thompson explained, chained CPI is an alternative (and perhaps more accurate) measure of inflation that assumes consumers substitute to similar, lower-priced goods when other prices rise. In other words, it says inflation is lower. Tax brackets are indexed to inflation, so a lower measure of inflation means they will rise less -- and more people will creep into these higher brackets. It adds up to about $60-90 billion over ten years.
CUTS. Say hello to chained CPI again. It's not just a tax hike. It's a Social Security cut too. Remember, Social Security benefits are indexed to inflation as well, so the logic of a lower measure of inflation kicks in here too -- benefits will rise slower than they otherwise would have, with the compounded effect hitting older retirees the worst. It's about a $100-200 billion cut over a ten-year window. Congress is supposed to negotiate on another $1 trillion or so of cuts, and if they cannot agree on them there will be -- wait for it! -- a new sequester in the future. Because the last one worked so well.
STIMULUS. Extend unemployment insurance and the refundable tax credits from the stimulus, but not the payroll tax cut. There's also some new, albeit unspecified, infrastructure spending thrown in.
There are a lot of moving parts here, but only three of these moving parts will matter in 2013: the end of the Bush tax cuts for the rich, the end of the payroll tax cut, and new infrastructure spending. In other words, it's unlikely any of the cuts will hit the economy next year. The can known as the sequester would get kicked for another year or so -- unless, haha, Congress can agree to other, immediate cuts -- and chained CPI will be the same as CPI-W in 2013. That leaves the three aforementioned changes -- changes that add up to about a half million less jobs in 2013 than if there was no fiscal cliff at all, as you can see in the chart below. The payroll tax cut is a political orphan in need of a champion.
The Cliff Notes version of why this deal would cost us 500,000 jobs next year is it sucks more money out of the economy than it puts back in. Let's look at it piece-by-piece.
Bush tax cuts for the rich expire. Less money for the rich means less money for the rich to spend. But the rich are different from you and me -- they tend to have money left over after they buy the things they want. In other words, they spend less of their incomes, so a tax hike on them doesn't hurt demand as much as a tax hike on the middle-class would (as we shall see). The Congressional Budget Office (CBO) figures higher taxes on higher earners would subtract about 200,000 jobs next year.
Payroll tax cut ends. Less money for everybody means less money for everybody to spend. That's what the payroll tax, which, remember, hits the middle-class harder than it does the rich, does. But it gets worse. A higher payroll tax means a higher cost of hiring and that means less hiring. A lot less hiring. Working backwards from thesetwo CBO reports shows it means about half a million less jobs in 2013. As the left-leaning Center on Budget and Policy Priorities (CBPP) points out, it's almost twice as stimulative as the Bush tax cuts for the rich, at similar costs. Spending the $115 billion to extend it another year would be money well spent.
Infrastructure. This is where things get admittedly speculative. We don't even know how much infrastructure spending both sides have talked about, let alone what kind of projects, but we can make some informed guesses. President Obama has asked for $50 billion of new infrastructure spending before, which he probably wouldn't get, but we'll use here as a best-case. If we take former Vice Presidential economic adviser and current CBPP fellow Jared Bernstein's rule of thumb that every $1 billion of construction or repair spending adds roughly 9,000-10,000 jobs, and then assume that this new spending would come in over two years, that gives us about 250,000 new jobs in 2013. Again, this is a pretty generous estimate.
As far as can-kicking goes, this ain't too shabby. The CBO figures that the fiscal cliff will cost us 3.4 million jobs next year if Congress does nothing; suddenly, half a million less sounds okay. But Washington can do better. It just needs to go over the fiscal cliff first.
Right now, Obama is offering lower revenues than he originally asked for and entitlement cuts for more stimulus -- and he's not even getting all of the stimulus! It's all because of the baseline illusion. As long as the Bush tax cuts are around, Boehner can claim he's the one offering concessions on revenues by saying he'll raise them at all. It's a silly argument, but it's a silly argument that goes away after January 1, when tax rates automatically go up. Then, Democrats can push a bill that cuts middle-class taxes and cuts deductions for the rich -- the $1.6 trillion from Obama's first offer -- and tell Republicans they have a choice. They can either get less revenue or less entitlement spending, but not both, and in return they have to sign off on all of the stimulus -- extended unemployment insurance, the payroll tax cut, and infrastructure spending. They could even set up a commission -- or a supercommittee, if they're feeling bold -- to cut spending in a year's time, with a new sequester to incentivize them to find cuts.
It's a deal that would bring our medium-term budget closer to balance, without costing the economy in the short-term. Now that would be grand.
In his first official White House briefing, Sean Spicer blasted journalists for “deliberately false reporting,” and made categorical claims about crowd-size at odds with the available evidence.
In his first appearance in the White House briefing room since President Trump’s inauguration, Press Secretary Sean Spicer delivered an indignant statement Saturday night condemning the media’s coverage of the inauguration crowd size, and accusing the press of “deliberately false reporting.”
Standing next to a video screen that showed the crowd from President Trump’s vantage point, Spicer insisted that media outlets had “intentionally framed” their photographs to minimize its size. After attacking journalists for sharing unofficial crowd-size estimates—“no one had numbers,” he said—he proceeded to offer a categorical claim of his own. “This was the largest audience ever to witness an inauguration, period, both in person and around the globe,” he said, visibly outraged. “These attempts to lessen the enthusiasm of the inauguration are shameful and wrong.”
Images of today’s marches in Washington, New York, Denver, Chicago, Boston, Los Angeles, Seattle, and from other cities in England, Ghana, France, Canada, Serbia, Australia, Kenya, Germany, India, and many more.
In Washington, DC, today, hundreds of thousands of protesters filled the streets in a demonstration called the Women’s March on DC, while even more marched in cities across the United States and around the world, one day after the inauguration of President Donald J. Trump. Larger-than-expected crowds of women and their allies raised their voices against the new administration, and in support of women's rights, health issues, equality, diversity and inclusion. Below are images of today’s marches in Washington, New York, Denver, Chicago, Boston, Los Angeles, Seattle, and from other cities in England, Ghana, France, Canada, Serbia, Australia, Kenya, Germany, India, and many more.
Popular demonstrations can bring change and topple governments. They can also spark retaliation from those in power.
The signs were so clever.
“We shall overcomb.”
“Viva la vulva.”
“I MAKE THE BEST SIGNS I REALLY DO EVERYONS SAYS SO THEY’RE TERRIFIC.”
Someone even made a papier-mâché vagina dentata.
The people were so cheerful and happy to be with one another, forgetting the cold and enjoying what often seemed less like a protest and more like a block party. There were families there, with grandmas in wheelchairs and babies in strollers. They were ecstatic and in disbelief at the number of people. TheWashington Post reported that the organizers put the attendance at up to half a million. They had hoped for less than half that.
It was surreal how similar this all felt, and my Russian friends on social media confirmed it: “Totally Bolotnaya,” one of them wrote. Bolotnaya is the square in the center of Moscow, right across the river from the Kremlin, where on December 10, 2011 around 50,000 people came out to protest fraudulent parliamentary elections. They had expected 3,000 and were stunned by their success. It was cold and gray that day, too, and the feeling of being in that joyous crowd was unforgettable, which is why I remembered it so vividly today. It is the giddiness of watching people vent their political frustrations with a sense of humor and good cheer, and the euphoria of observing people discover that they are not alone, that there are thousands and thousands of people just like them.
The Women’s March on Washington was a protest that also, in its own way, marked a peaceful transition of power.
WASHINGTON, D.C.— In the middle of the National Mall, on the same spot that had, the day before, hosted the revelers who had come out for the inauguration of Donald Trump, a crowd of people protesting the new presidency spontaneously formed themselves into a circle. They grasped hands. They invited others in. “Join our circle!” one woman shouted, merrily, to a small group of passersby. They obliged. The expanse—a small spot of emptiness in a space otherwise teeming with people—got steadily larger, until it spanned nearly 100 feet across. If you happened to be flying directly above the Mall during the early afternoon of January 21, as the Women’s March on Washington was in full swing, you would have seen a throng of people—about half a million of them, according to the most recent estimates—punctuated, in the middle, by an ad-hoc little bullseye.
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
Most presidents view inaugural addresses as a rare opportunity to appeal beyond “the base.” This was base-only.
For my sins, I have read every U.S. presidential inaugural address ever given, and played a small part in writing one of them—Jimmy Carter’s, delivered 40 years ago today.
The first one I remember hearing, John F. Kennedy’s in 1961, I saw on a fuzzy black-and-white TV from my 7th-grade American history classroom in California. The arctic conditions that day in Washington practically radiated through the TV screen. I remember seeing the revered 87-year-old poet Robert Frost hunch against the wind and squint in the low-sun glare as he tried to read the special inaugural ode he had composed. Then Richard Nixon, just defeated by Kennedy in a hair’s-breadth race, reached across to block the glare with his top hat. Frost waved him off and began reciting from memory one of his best-known poems, “The Gift Outright.”
A history of the first African American White House—and of what came next
In the waning days of President Barack Obama’s administration, he and his wife, Michelle, hosted a farewell party, the full import of which no one could then grasp. It was late October, Friday the 21st, and the president had spent many of the previous weeks, as he would spend the two subsequent weeks, campaigning for the Democratic presidential nominee, Hillary Clinton. Things were looking up. Polls in the crucial states of Virginia and Pennsylvania showed Clinton with solid advantages. The formidable GOP strongholds of Georgia and Texas were said to be under threat. The moment seemed to buoy Obama. He had been light on his feet in these last few weeks, cracking jokes at the expense of Republican opponents and laughing off hecklers. At a rally in Orlando on October 28, he greeted a student who would be introducing him by dancing toward her and then noting that the song playing over the loudspeakers—the Gap Band’s “Outstanding”—was older than she was.
Part of it depends on whether they believe personality is fixed or constantly changing.
It’s a question that often plagues people after a painful break-up: What went wrong? As they work to figure out the answer, people typically create new relationship stories, analyzing the events leading up to the breakup and using them to build a cohesive narrative. In some cases, this type of storytelling can be positive, helping people to make sense of—and come to terms with—painful things that happen to them. Other times, though, the storytelling process can be a negative one, compounding pain rather than easing it.
My colleague Carol Dweck and I research why some people are haunted by the ghosts of their romantic past, while others seem to move on from failed relationships with minimal difficulty. Over the course of our research, I’ve read hundreds of personal stories about the end of relationships, and these stories offer some clues as to what pushes a person into one group or the other.
Is there room in the movement for people who morally object to abortion?
Updated on Monday, January 16 at 4:05 p.m.
Pro-life women are headed to D.C. Yes, they’ll turn out for the annual March for Life, which is coming up on January 27. But one week earlier, as many as a few hundred pro-lifers are planning to attend the Women’s March on Washington, which has been billed as feminist counterprogramming to the inauguration.
With organizations like Planned Parenthood and NARAL Pro-Choice America co-sponsoring the event, pro-life marchers have found themselves in a somewhat awkward position. What’s their place at an event that claims to speak for all women, but has aligned itself with pro-choice groups? With roughly a week to go before the march, organizers also released a set of “unity principles,” and one of them is “open access to safe, legal, affordable abortion and birth control for all people.”
On Friday, hundreds of thousands of people made their way to downtown Washington, D.C., to celebrate the inauguration of Donald Trump. The next day, thousands more will make the same journey for the Women’s March on Washington.
In the days following both events, the press will report their total attendance. But how will journalists know how many people attended?
Crowd counters rely on a few methods. For the inauguration, they will likely use a single aerial photo of the crowd, captured by a helicopter or satellite. Experts will augment their knowledge of how many people can fit into a space with some “head-counting”—literally, going person by person.
This is how the estimate for the 2008 inauguration was reached. Stephen Doig, a professor at Arizona State University, consulted a satellite image released by the company DigitalGlobe and concluded that about 1.1 million people had watched the ceremonies from the National Mall. But the D.C. government, working off the same satellite image and the reports of federal and municipals employees, arrived at a much larger figure: 1.8 million.