Presenting Obama's Plan To Bail Out The (Otherwise Perfectly Solvent) States
We all know by now that Meredith is a witch: an unpatriotic, racist bitch, who eats kittens for breakfast, who deserves to be grilled by Joe McCarthy's exhumated corpse for telling communist truths, pardon, lies (just a Freudian slip dear Department of Central Planning and Internet supervision), and who will soon be accused of having unprotected (yet arguably consensual) sex with a Swedish man. But just in case she is on to something, here comes the president's plan to bail out the (otherwise perfectly solvent and all, we promise) states. The NYT reports that "President Obama is proposing to ride to the rescue of states that have borrowed billions of dollars from the federal government to continue paying unemployment benefits during the economic downturn. His plan would give the states a two-year breather before automatic tax increases would hit employers, and before states would have to start paying interest on the loans." But where are the details you may ask? Patience grasshopper: they will be included in the latest budget proposal which has been delayed for nearly half a year now as the printer ran out of zeroes. "The proposal, which administration officials said would be included in
the 2012 budget that the president is scheduled to unveil next week, was
greeted coolly by Republicans on Capitol Hill, who warned that the plan
would ultimately force many states to raise their unemployment taxes in
the years to come." Ah yes, the Republicans - those paragons of sound financial judgment and sounder virtue. After all who can forget whole "Tea Party thing" which did so much to prevent the incurrence of a few hundred billion in additional debt over the next decade to pay for the latest Russell 2000 at 36,000 hairbrained ponzi scheme concocted by Rudolph von Bernankestein.
More from the NYT on why QE3.1 - the Muni Edition (not to be confused with QE3.7 the MBS edition, or the QE3.495 the ICE gold margin requirement edition, and most certainly not with QE3.495,440,559 the "Kill the David Einhorn shorts" edition) is just around the corner:
Administration officials will make the case that the plan helps the economy and states in the short run, while bringing overdue changes to the unemployment insurance system in the long run. And Republican lawmakers could find themselves under pressure from Republican governors, whose states owe the federal government billions of dollars.
The administration is also betting that employers will back the proposal, especially in states where their taxes would otherwise go up. Michigan, for instance, owes the federal government $3.7 billion it borrowed to pay unemployment benefits. Under current law the state would be forced to pay $117 million in interest to the federal government this fall, and the federal tax on employers would automatically step up each year to repay the debt.
The state’s newly elected Republican governor, Rick Snyder, has been lobbying for relief; his press secretary, Sara Wurfel, said that while they would need to see the details of the plan, they would “very likely welcome the much-needed relief.”
Robert Gibbs, the White House press secretary, said, “We are giving help to some states who have had to borrow and not been able yet to pay back.”
The states are in a tough spot. Many entered the recession with too little money in their unemployment trust funds, and they quickly ran through what little they had as unemployment rose and remained stubbornly high month after month.
So, uh, can we all drop the pretense and agree that while certainly scaring the children (who will all need PhDs in number theory in a few years just to count to the debt target, pardon, limit) and the idiots, Meredith has been pretty much spot on?
In fact, we can even forgive her for telling Congress to fuck off with their witch hunts:
Citing scheduling conflicts, Ms. Whitney has declined an invitation to appear before the panel of the House Oversight and Government Reform. But the subcommittee’s chairman, Representative Patrick T. McHenry, Republican of North Carolina, said that would not dissuade him from investigating her record.
“This isn’t a gotcha thing, but she’s going to be part of the hearing, whether or not she participates,” he said. “If she doesn’t want to come forward in a venue like this, that makes a statement.”
And some more details on how Obama will arrive in one of Blackhawk Ben's stealth Commanche gunships:
In his budget, officials said, Mr. Obama will call for deferring interest payments on the debt and postponing the automatic tax increases. Then, in 2014, to bring that money back into federal coffers, the administration proposes to raise the minimum level on which employers pay taxes.
Current law requires states to collect unemployment taxes on at least the first $7,000 of income; that minimum has not been raised in decades.
The president’s proposal would raise that minimum taxable wage base to $15,000. The rate of the federal portion of the unemployment taxes would then be lowered, so the proposal would not raise federal taxes on states that do not owe the federal government money. But it would speed the rate at which states that do owe money repay the federal government, and allow states to collect more unemployment taxes to rebuild their trust funds if they do not lower their tax rates.
It was that prospect — that the higher wage base would lead to higher taxes for states after 2014 — that drew rebukes from Republicans in Congress.
Don't worry children. It is for your own good. Plus if this plan falls through, the world will end. And yes, Meredith is certainly a witch and should be burned at the stake. Surely she will be able to fly away to safety due to the null hypothesis of her witchiness, and if she actually does burn: well, mistakes were made...