Hes a Pulitzer Prize winning tax writer at New York Times and now at the college of law. We have the president and ceo of the center of American Progress who served in the obama and Clinton Administrations, policy director of Hillary Clintons campaign. Laura flanders, founder of grittv. Com. The editor of salon. Com and the woman who hired me two years ago. Thanks, as always for that. Of course. Anyway, on friday afternoon, House Speaker john boehner attempted to paint a picture of white house negotiations and how to avoid going over the fiscal curve. I have been saying fiscal slope. Now on the show, ill go with curve. This isnt a Progress Report because theres no progress to report. Four days ago, we offered a serious proposal based on testimony from president clintons former chief of staff. Theres been no counter offer from the white house. Instead, reports i understand kate the president adopted a deliberate strategy to slow walk the economy to the edge of the fiscal cliff. The extremely vague republican proposal did not include an increase in tax rates a position he reiterated on friday making clear theres no movement on the white houses red line on treasury secretary tim geithner as he was asked about it wednesday. The administrations position when it comes to raising taxes on the wealthy. Making more than 250,000. If republicans do not agree, is the administration prepared to go over the fiscal cliff . Absolutely. Theres no agreement that doesnt involve the rates going up on the top wealthy 2 . Republicans clinging to what little leverage they have to maximize cuts zeroed in on the debt ceiling hoping for a repeat of the 2011 showdown where House Republicans were able to extract 2 trillion in cuts. 1 trillion cut from domestic programs in ten years and 1. 2 trillion in cuts through a sequester. Wednesday, president obama seemed to set another red line, a business round table who warned against the repeat of last years debacle. I want to send a clear message. We are not going to play the game next year. If Congress Suggests they are going to tie negotiations to debt ceiling votes and take us to the brink of default, once again, as part of a budget negotiation, which by the way, we have never done in our history until we did it last year, i will not play that game. Because we have to break that habit before it starts. So, the Washington Post made a point friday saying you have two tracks here. You have the public posturing, comments like that from obama and boehner. You have inside washington, behind closed doors, he thinks the foundation of a deal may be shaping upright now. What he laid out, ezra is reliable because hes plugged into the administration. He laid out a deal where republicans give in on the tax rates but not the 39. 6 . Maybe the 37 , about half way in exchange for that. Hes saying white house would give in something on entitlements specially on medicare eligibility, raising it by two years. David, if thats the framework, what is your response . This is a total betrayal for the people who voted for obama. Its what a lot of people have been worried about. People who make 100 million a year salary, 80 of them in the country pay the same rate as someone who makes 40,000. There should be more tax rates. Secondly, raising the medicare age, its a terrible thing to do. It doesnt save money, it costs money. For people who dont have office jobs like we do, its a death sentence for them. This is awful. Obama won by 5 million votes. 3 million vote margin for bush in 2008. A margin of one in 2000 where he lost the popular vote and the republicans are saying the man has a mandate. We must give him what he wants. Im sorry, he has a mandate, do what it is. People have been calling on the phone and writing saying stand firm or well put other people in next time around. We were talking about this before. I wonder, is there a way of looking at this where its part of the political process, part of the negotiating process where this gets leaked, put out there and it may not be the white houses intent . I certainly hope so. I think theres reason to think that. I agree with david, people need to make noise about this. Mitt romney even ran on raising the eligibility age, let alone president obama. Nobody ran on that because its a, political poison and b a terrible idea for the reasons david stated. Theres no other hand on that issue. This is a political negotiation. One day you have tim geithner saying they are prepared to go over the fiscal cliff. The same day, the white house is meeting with latino groups the next day africanamerican groups saying why its terrible to go over the fiscal cliff. You have negotiation on many tracks. I like to talk about why raising medicare age is a bad idea. First of all, really, what it is is a shift of cost from the federal government to employers, seniors and states. In fact, because medicare is cheaper for beneficiaries, its increasing. A president who ran on lowering National Health care cost, it was one of the reasons why we have the Affordable Care act. Its when you increase the costs for everybody, and well cut out hundreds of thousands of seniors. The seniors are the hardest to ensure. You are raising costs of the medicare program, shifting costs to employers because they have to shift costs. Its making us less competitive. I dont understand what they are saying, what the signal the white house and its allies on this front would be sending out there is they say jonathan wrote this, theres important symbolic value. Nonsense. But, let me the point i want to make here is, this is what they say. I wonder how we got into this mess in the first place. If we are talking political and efforts to send out messages, this will only create the kind of reaction we need to shoot this idea down. If people get put into this picture, we are talking numbers, politics, power in washington, we need to talk people. I am, right now, paying for a mortgage and the private Health Insurance of my sisterinlaw who worked 20 years in a metal factory in michigan, one of the few remaining. She retired the minute she could. She worked her little fingers to the bone making shelves for walmart. She retired after 20 years. Her wages went from 5 an hour to 10 an hour. She was not able to get medicare. She was 62. Shes waited every month to get closer to 65 to get that help. Lower the age of medicare to 55. Make that the bargaining point. Thats my point. When i was envoking the idea of the symbolic idea, how did it get to the point where the white house feels theres such they are not proacting. Theres a term that greg from the Washington Post came up with. The idea is republicans have been making noise for the last few years about the deficit. Democrats have mimicked the noise. Yes, we have a huge deficit problem. You get in Public Opinion polls, overwhelming majorities say yes. They look at the polls and respond to it. Something similar happened on medicare. We have the notion of theres a medicare crisis. Theres an entitlement. This is a health care crisis. I really need to say about jonathans piece. I am liberal, but that is the worst example i have heard. Take people out of a popular i hope this is not the white house position. Take people out of a Popular Program that works and they love, put them into obama care that is not so popular and they dont necessarily love. Take away something they like and give them something liberals think they should like. The right question is, the portuguese have an average income lower than ours with universal health care. It costs twothirds of their economy compared to our economy. We are having the wrong discussion. Here is the program. Start by lowering medicare is an option to 55 or 40. Stop reacting to what well have to continue the next one because we have a question here. Who is arguing to extend all the bush tax cuts is next. Wasnt my daughters black bean soup spectacular . [ man thinking ] oh, this gas. Those antacids arent working. Oh no, not that, not here [ male announcer ] antacids dont relieve gas. Gasx is designed to relieve gas. Gasx. The gas xperts. Wanted to provide better Employee Benefits while balancing the companys bottom line, their very first word was. [ to the tune of lullaby and good night ] aflac aflac [ male announcer ] find out more at. [ duck ] aflac [ male announcer ]. Forbusiness. Com. [ yawning sound ] [ male announcer ]. Forbusiness. Com. When you take a closer look. At the best schools in the world. You see they all have something very interesting in common. They have teachers. With a deeper knowledge of their subjects. As a result, their students achieve at a higher level. Lets develop more stars in education. Lets invest in our teachers. So they can inspire our students. Lets solve this. We have been talking about the latest in the fiscal curve saga. That includes, at this moment, talk of a compromise that may or may not be in the works. An increase in the top marginal tax rate, short of what obama has been asking for, but still an increase and changes to medicare with the eligibility age in exchange for that on the democratic side. We were talking about, from the democratic standpoint, the medicare issue. I want to talk about the rate issue. There cant be a deal, unless republicans, even on these terms cant be a deal unless republicans go along with increasing the tax rate. There hasnt been a single republican willing to vote to increase tax rates. I want to bring in a former member of mitt romneys Health Care Advisory group. Blog on Forbes Health care. I want to ask you about that piece of it. We have been talking about this potential deal of 37 of the top marginal tax rate. Do you see a scenario where republicans would vote for that in congress . Well, first of all, i have to respond to this interesting hyperbole about medicare death sentence. If you raise the retirement age for medicare, we have the Affordable Care act as the backstop. Everybody is still Poverty Level. We are talking means testing medicare by raising the retirement age. People who are upper income, above 400 of the Poverty Level wont be subsidized. Its where entitlement reform should go, to expand it into the retiree population. Immaterial to stick to taxing, but i would make the point on medicare, we have obama care in place. One issue is we dont have it in place right now. I think we are going to talk about it later. States have to set up exchanges. They have to expand medicaid eligibility. I want to ask about this tax piece. Its been more than two deck kalds since a single republican in Congress Said hey, i am willing to vote for a tax increase, even if we had to deal along the per am ters. Republicans have to do that. Can you see it happening . Speaker boehner said hes willing to raise revenue. His method is simplify the tax code, eliminating the deductions wealthy people take advantage of. President obama is less interested in that. His emphasis is raising rates. Thats been the debate. Republicans may or may not concede on that. As you said, they dont have a lot of leverage. If they do nothing, if no law passes, they go over the fiscal cliff. That raises the issue. You are talking what a disaster the medicare eligibility portion of this would be, do you look at the compromise of 37 , if you could get something more favorable on medicare, would you say going up to 37 instead of 39. 6 is enough . No. Look, there was a tax plan and we looked at the discussion of keeping the rates at the level and reforming the tax code and dealing with deductions. The truth is, if you want to have significant deficit reduction, which republicans are arguing for and you want to stabilize the debt, we need significant revenue. We need to the real challenge we have is we are not raising revenue. Its at the lowest levels its been in decades. The fairest and best way to do that is move from 35 to 39. 6 . Go back to the clinton levels. We have this level in 2000, from 93 to 2000. We had great growth. We looked at the issue. We have bob on our plan. The reason we have that is because we recognize this argument republicans have made, which is that raising the rates will hurt the economy has not been proven true by the facts. To try to put this into perspective here, i want to say, i think the story goes back 30 years. I think theres a key pivot point here. I want to play a clip from 1988. That will kind of be a good basis here. Lets play that first. Congress will push me to raise taxes and ill say no. They will push and ill say no. They will push again to them and ill say, read my lips, no new taxes. Okay. Efbd remembers george bush senior saying read my lips, no new taxes. Two years later, hold over deficits from the reagans. He decided to cut a deal to raise taxes and go after the deficit. There was a revolt in the republican party. It was led by Newt Gingrich who said no, we are not going to raise rates. From that point forward, republicans have been terrified of being on the wrong side on this issue. In 1993, bill clinton raised the rate up to 39. 6. There wasnt a single republican that went along with it. There were threats. Republicans in 1993 said well have a second recession. We are going to lose 2 million jobs. We had the roaring 90s. I come back to you on this because this is a question i have been looking for an answer for. How do you reckon with what happened when he raised the taxes and the deficit reduction. Theres a lot of points to make about that. First of all, we dont have clinton levels of spending. Thats the biggest problem. We have obama levels of spending. If we are going to pay for that, some democrats are admitting, taxes have to go up on not just the top 2 , it has to be everybody. During the bush years from 2000 to 2007, the top 1 paid 84 billion more in revenue in 2007 than 20006789 their share of the overall tax burden went up. The bottom half of the country, their share of income tax revenue went down from 3. 9 to 2. 9 . They paid 6 billion less. Economic growth is important. Theres a lot of ways to get Economic Growth. Clinton benefited from the dot com bubble as well. Yes, it would be great to have the clinton economy. If we had clinton tax rates and spending levels, republicans would be fine with that. Theres a lot to get to in that. 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Log on now to androgeloffer. Com and you could pay as little as ten dollars a month for androgel 1. 62 . What are you waiting for . This is big news. So, the 5. 3liter v8 silverado can tow up to 9,600 pounds . 315 horsepower. Whats that in reindeerpower . [ laughs ] [ pencil scratches ] [ male announcer ] chevys giving more. Get the best offer of the year 0 apr financing for 60 months plus 1,000 Holiday Bonus cash. Plus trade up for an additional 1,000 tradein allowance. Hurry. Bonus cash ends january 2nd. I just asked to grapple with the success of the clinton budget in 1993 in terms of bringing down the deficit and the Economic Growth from the 1990s. I know you were looking to say something. The average income of the bottom 90 of americans has fallen to the level of 1966 when johnson was president. The top 1 of the top 1 has gone from 4 million to 22 million. In 2010, the first year of the recovery, 37 of all the increased income in the entire country went to 15,600 households. We have created a privatized system to redistribute upwards and the reason people at the top are sharing a larger portion of the income taxes because their incomes are growing at an enormous rate, but their burden is falling. To suggest we dont need to raise more revenue by applying it to people, success depends on this government, living in this society with rules that make it possible to make that money is outrageous. It is arguing that we should burden the rich. We have having this discussion where president obamas bottom line demand has been raise the top marginal rate. Now, we are saying it will be 37 and not 39. When you look at the ageing population, the demands of the next fewer generations and where the tax burden is now, we need a conversation beyond that. You are right. We have 50, 50, 50 million americans living in poverty with food stamp help. 9 million americans over the age of 50 who are food insecure. One in three of us have no savings. You talk the johnson years. In that period, 6