From Truth Out: http://www.truth-out.org/what-do-obama-gang-six-and-paul-ryan-have-common/1311350379
by: Jack Rasmus, Truthout | News Analysis
Saturday 23 July 2011
What do Obama, the "Gang of Six" and House radical Teapublican, Paul Ryan, all have in common? They've all proposed a $4 trillion deficit reduction package. Does anyone think that is pure coincidence?
Obama's tactical move today, July 19, along with the Senate Gang of Six, is to hitch his (and the Gang's) proposed $4 trillion proposed cuts to the current negotiations simultaneously going on between Reid and McConnell in the Senate to immediately cut spending by $1 trillion to $2 trillion in exchange for raising the debt ceiling.
Obama's move shows clearly he does not want to take on deficit cutting piecemeal. He wants to get it all over at once and behind him before campaigning for 2012 begins in earnest. And he's willing to offer big cuts in spending to get it done now, before the 2012 election cycle gets seriously underway after this summer.
The likely outcome of this "rush to get it done" will be that the immediate, short-term $1 trillion to $2 trillion in spending cuts being worked out by Reid-McConnell will still pass, while the longer term $4 trillion now resurrected "grand deal" by Obama-Gang of Six will quickly follow. It may even be appended to the short-term package.
While the short-term package will be all spending cuts, the now revived $4 trillion "grand deal" package will contain some tax revenue raising. However, as previously noted, the tax revenues will be primarily tax loophole closings that are often difficult to collect and verify, while the tax code revision will include major reductions in the top personal and top corporate tax rates, both currently at 35 percent.
What might the likely "relative proportion" between spending cuts vs. tax loophole hikes look like in the final package? If Obama's previous "grand deal" is any indication, it could look similar to that prior deal's 87 percent spending cuts to 13 percent tax hikes. Certainly no less than a 75 percent to 25 percent mix.
Continue reading at: http://www.truth-out.org/what-do-obama-gang-six-and-paul-ryan-have-common/1311350379