Readers who would like to probe a little deeper into the reasons behind GOP domination of southern politics should check out Chris Kromm’s post, “Map Mischief: How gerrymandering has undercut Southern Democrats in Congress” at Facing South. Kromm, one of the savviest reporters covering social struggle and change in the southern states, explains:

In North Carolina, more than half (51 percent) of the state voted in 2012 for a Democrat to represent them in Congress. But this month, less than a third (31 percent) of the U.S. Representatives who will be sworn into office from North Carolina will be Democrats.
The mismatch between votes and representation is even more striking in South Carolina, where more than 40 percent of the state’s voters chose a Democratic representative, but only one of the state’s seven-member delegation is a Democrat.
In Arkansas, nearly 30 percent of voters picked a Democrat for the U.S. House. The number of Democrats who will represent Arkansas? Zero.

Kromm provides a chart showing the breakdown for 13 southern states states, and adds, “…The gap between the number of voters who vote Democratic for Congress and the actual number of Democratic representatives who will take office this month is four times greater in the South than the national average — a situation that exaggerates the power of Republicans in the South and fuels perceptions of the region as a monolithic conservative stronghold.”
Clearly Democrats would do much better in the south under nonpartisan design of congressional districts. But that will not happen in states controlled by Republican governors and legislatures. The best hope for fair representation for Democrats in the southern congressional districts remains a larger investment in recruitment and training of better candidates, along with more aggressive voter registration of African and Latino Americans in the region.

It’s been widely reported that the 2012 national elections were the most expensive in history. For more revealing details about where the money came from and who got it, however, read “Billion-Dollar Democracy: The Unprecedented Role of Money in the 2012 Elections” by Adam Lioz and Blair Bowie at Demos. Among their revelations:

Newly minted Super PACs dominated outside spending reported to the FEC, aggregating huge sums from millionaires and billionaires.
The top 32 Super PAC donors, giving an average of $9.9 million each, matched the $313.0 million that President Obama and Mitt Romney raised from all of their small donors combined–that’s at least 3.7 million people giving less than $200.
Nearly 60% of Super PAC funding came from just 159 donors contributing at least $1 million. More than 93% of the money Super PACs raised came in contributions of at least $10,000–from just 3,318 donors, or the equivalent of 0.0011% of the U.S. population.
It would take 322,000 average-earning American families giving an equivalent share of their net worth to match the Adelsons’ $91.8 million in Super PAC contributions.
Super PACs accounted for more than 60% of outside spending reported to the FEC.
For the 2012 cycle, Super PACs received more than 70% of their funds from individuals, and a significant percentage (12%) from for-profit businesses.

The authors have many more such nuggets addressing the edge provided incumbents and special interests and the role of secrecy in funding candidates. As for the reforms needed to restore fairness to the system, they conclude:

A campaign finance system that empowers average citizens–by providing incentives for small contributions and strictly limiting both contributions to candidates and outside spending, for example–can promote political equality, enable candidates and elected officials to spend more time reaching out to a broad range of constituents, and better align policy outcomes with public preferences…

You can download the entire report (pdf) right here.

Aaron Blake’s “Why Republicans have no incentive to compromise” at WaPo’s ‘The Fix’ explains it well:

…Republicans in Congress have very little incentive to come to the middle on the big issues before the country.
And a new poll from the Pew Research Center says it all: Quite simply, it’s because the GOP base demands principles over compromise…According to the new national Pew survey, 50 percent of Americans would rather that their elected officials “make compromises with people they disagree with” rather than “stick to their positions” (44 percent).
But when you break it down by party, you see the reason we have gridlock.
While 59 percent of Democrats prefer compromise to principled stands, just 36 percent of Republicans say the same (compared to 55 percent who want principled stands).
For Republicans, that’s actually up slightly from the 32 percent who wanted compromise two years ago, after the 2010 election in which the GOP reaped huge gains by standing resolutely against Obama’s agenda. But over the same span, the percentage of Democrats calling for compromise has risen significantly — from 46 percent to 59 percent. And independents have also moved by double digits toward favoring compromise.

In other words, the Republicans in Congress who refuse to compromise are not betraying a majority their supporters. They are reflecting the views of the voters who elected them, often in gerrymandered districts. All of which leaves the GOP in a bit of a dilemma.
As Blake concludes, “Their base demands that they resist compromise, but doing so causes the party as a whole to fall out of favor with the American public.”

Today Democracy Corps released results for addressing the fiscal cliff and policies and messages that get the country to the best short and long-term result. Because voters do not trust the Republicans’ priorities and judgment and see them as so extreme in protecting millionaires at the expense of the middle class and poor, our messages and policies get more than a fair hearing.
For the short term and fiscal cliff, do not forget that the economy is still tough (incomes, finances, and jobs) and progressives’ best messages begin with the struggling middle class that both parties promised to help, and that means above all making sure there are no cuts in benefits for Medicare and Social Security. We should get health care costs down, tax the richest, and get rid of special interest subsides but we can’t ask the middle class and seniors to pay what they can’t afford.
The Republicans are mostly on the defensive when progressives advocate protecting benefits and Republicans argue for ‘reforming entitlements’ — that is, cutting Medicare and Social Security in order to protect the richest from higher taxes.
For the longer term, voters are very open to investing for growth now, avoiding the immediate, drastic cuts in spending that hurt the economy, and a plan that addresses jobs in the short-term and deficits in the long.
The poll’s principal findings are summarized below:

• The Republican Party is viewed as too extreme on many critical issues – both fiscal and cultural – including aid to the poor, the rights of gays, women’s issues, and taxes for the wealthiest individuals and corporations.
• The Republican brand is in trouble, based on a real pull-back among moderate-to-liberal Republicans who question the party leadership’s priorities in the budget negotiations.
• The strongest proposals to reduce the deficit are all progressive policies, including raising taxes and reducing deductions for the wealthiest, lifting the payroll tax cap, and raising Medicare premiums for those who can afford to pay more.
• The least popular policy proposals are those that would hit the middle class and working people hardest, including benefit changes to Medicare and Social Security, raising the Medicare eligibility age, and adjusting the way Social Security cost of living assessments are calculated.
• Progressives’ best messages are situated in the economy: what’s happening to the middle class and middle class families’ inability to afford benefit cuts. Above all progressives should want a debate over entitlements with the goal to make sure the middle class is whole. This message cuts across groups and clearly frames what each side aims to get out of these negotiations.
• Americans have moved toward progressive economics on investment. An investment message does not hurt the progressive argument and has the power to reinforce basic tenets of progressive economics for key groups – especially those who have been hardest hit in this economy.
• Unemployment and long-term deficits remain problems, so a message focused on getting jobs and growth in the short-term and addressing debt in the long-term is also strong.
• But the conservative message focused on spending is still very attractive and makes sense to voters. It is important to reframe the conservative position through entitlement cuts and the impact on the middle class and poor.

Read the entire results here.

The following article by Democratic strategist Mike Lux, author of The Progressive Revolution: How the Best in America Came to Be, is cross-posted from HuffPo:
It is a well-known fact that President Obama wants a “grand bargain” with the Republicans, a deal that would reduce future deficits both by raising tax revenues and cutting spending, including on the so-called “entitlement programs.” He has offered this idea up repeatedly to Speaker Boehner and other Republican leaders in the 2011 debt ceiling talks and in the 2012 fiscal cliff debate, and media reports suggest that he is discussing the idea again with Republicans in the lead-up to the next perils of a budget crisis that is only a few weeks off.
Democrats in the progressive wing of the party (of which, full disclosure, I am a card carrying member) think the idea of cutting Social Security, Medicare and/or Medicaid benefits is terrible public policy because senior citizens who can least afford it will be badly hurt, and we have been working hard to convince the president to back away from this offer. This may be difficult to do, though, as the president has some strong (wrong, in my judgment, but compelling to the president’s political and legislative team) political reasons for wanting to do this grand bargain. But the politics of this deal are very different for the rest of the party, and it may well be that progressives can win over a lot more of those Democrats than conventional wisdom currently expects.
The Obama team’s logic is that they are sick and tired, understandably, of Republicans wanting to make every single issue, every policy debate, about the deficit issue, and they don’t want our country to keep lurching from fiscal crisis to fiscal crisis as Republicans continue to look for “leverage” to force more cuts. And the White House, to their credit, is eager to move on to other issues that will move the country forward, such as immigration reform and gun safety issues. They believe that if they can finally close the deal and get the grand bargain they have been searching for that they will be on strong political ground to be able to say regarding the deficit, “Hey, we’ve already done something big on that, it’s time to move on.”
Now I happen to believe their logic is wrong on the politics of the issue, as Republicans’ strongest political issue by far is the deficit, and they will never give it up — no matter what happens, they will keep demanding more and more cuts, and the deficit hawks in the media and well-funded groups like Fix The Debt will back them up. But even if you were to grant that the White House was right on the politics of this issue for them, for Democratic members of Congress the politics on this issue are completely different.
For starters, members of Congress are far more affected by what I call the intensity factor. Remember about 25 years ago when senior citizens surrounded Con. Rostenkowski’s car and started rocking it back and forth because of a bill they didn’t like on catastrophic health care? Think what seniors today might do if their Social Security benefits were cut. That kind of intensity drives bad media coverage back home, primary challenges, contributions to opponents — and it kills your contributors’ and volunteers’ and base voters’ enthusiasm levels.
The threat of a primary is not as great on the Democratic side as on the Republican, as the progressive movement has less money and capacity in general to mount many successful primary challenges. In the last several cycles, there has usually been one major primary challenge (some successful, some not) to an incumbent from the left, and that isn’t enough to strike fear into most Democrats’ hearts. The intensity factor, though, might change the dynamics on this, adding new money and volunteers to primary fights. Add to that the combination of progressive forces with older voters who have just had their Social Security cut, and incumbent Democrats might have something to worry about, especially in states like PA, OH, MI, WI and IA with both large numbers of seniors and large numbers of union members.
Beyond the primaries, though, the politics of cutting benefits is far worse for Democratic incumbents in an off year general election. Think about the demographics alone: in the past two presidential elections, the percent of the electorate that came from voters 65 and over was 16 percent, whereas in the 2010 off-year election it jumped to 21 percent. And seniors have been one of the most volatile demographic groups in the electorate in recent years, and one not inclined to like Democrats very well: Democrats lost them by 8 percent in 2008, by a whopping 21 percent in 2010, and by 12 percent in 2012.
But seniors are far from the only worry with a bad vote on Social Security or Medicare. The voters that Democrats have to turn out in big numbers in an off-year are base voters. Base voters hate the idea of cutting Social Security, Medicaid and Medicare, and a Democrat who had to defend that vote would be looking square in the face at a base voter constituency that was likely to be very depressed. I’ve lived through two off-year elections where Democratic base voters were unexcited about voting — 1994 and 2010 — and I don’t relish living through that again.
What will be especially brutal in the off-year election for Democrats who believe they have cut a responsible bipartisan deal that will protect them from Republican attacks is that the unaccountable outside groups with their millions of dollars in attack ads won’t hesitate to do brutal ads on them for cutting Social Security and Medicare, just as they did the last two elections attacking them for “cutting” Medicare. It won’t matter that the Republicans wanted to cut even more, or that the money for the ads comes from millionaires who would love to see these programs privatized: the attack dogs will not hesitate to make political hay off such a vote.
Beyond rank and file members of Congress, there is another major force in the Democratic party for whom a grand bargain is potentially deadly, and that is potential presidential candidates. Try explaining your vote cutting Social Security to the heavily senior citizen and base activist dominated Iowa caucuses. Having been involved in 5 different presidential campaigns, I feel pretty confident saying that it would be extremely tough to win a Democratic presidential primary having supported cutting Social Security benefits.
Even if you grant that the politics of the grand bargain idea are good for President Obama, they are poison for Democrats in Congress who have to run again in 2014 and 2016. The president, who will never run for office again, may feel like his best political alternative is to ignore the wishes of both his base and the seniors, who have never voted for him anyway on an issue like Social Security cuts. For the rest of the party, they had better take a close look at how this will affect their own political well-being.

President Obama and Democrats should be encouraged by an article in today’s Washington Post, “Most see Obama as ‘strong leader,’ say deal on debt ceiling does not require cuts” by Jon Cohen and Peyton M. Craighill, who report on a new Washington Post-ABC News poll:

Fully 55 percent say Obama is doing a good job overall, more than double the 24 percent saying so of the Republicans in Congress. Among political independents, 54 percent approve of the president’s job performance; just 21 percent give good ratings to congressional Republicans. (At 37 percent overall and 30 percent among independents, the Democrats in Congress do little better.)
The GOP congressional leadership also takes flak for a perceived unwillingness to work with Obama on important issues: 67 percent of all Americans see them as doing “too little” to compromise with the president. Far fewer, 48 percent, say so about Obama’s willingness to compromise with the GOP.
The percentage of Americans seeing the Republican leadership as overly intransigent is up 13 percentage points since December 2010, just after the GOP reclaimed control of the House of Representatives. The biggest increases since that time have been among Republicans and conservatives, with roughly 20-point jumps in blaming their party’s leaders for not doing enough to strike deals with the president. Half of all Republicans say the GOP leadership is not doing enough to compromise.

Craighill and Cohen point out, however, that there is significant room for improvement as regards public opinions about Obama’s economic policies, and the “wrong track” numbers are too high. Overall, though, the rest of the authors’ nuanced analysis of the poll results in the article provides good news for Obama and very bad news for Republicans.

This article by Democratic strategist Robert Creamer, author of Stand Up Straight: How Progressives Can Win, is cross-posted from HuffPo:
For years the NRA has struck terror into the hearts of many Members of Congress. The organization’s officers and lobbyists purported to represent the interests and wishes of millions of American gun owners.
Members of Congress believed that negative NRA ratings — and a flood of NRA money — could sink their political careers faster than you could say “AR-15.”
But the American people, and Members of Congress, are gradually awaking to the fact that — just as with the Wizard of Oz — there isn’t much behind the NRA’s magic curtain but the big booming voice of a special interest bully whose power derives more from perception than reality.
It is of course true that in politics the perception of power translates into the reality of power. The problem is that once it becomes clear that you’re all hat and no cattle, the myth of power rapidly collapses into a pile of dust. That is exactly what is happening to the NRA. Here’s why.
Reason #1. First and foremost, in 2012 the NRA had exactly zero effect on the outcome of the General Election — or to be more precise, it had about .83 percent effect.
One of the big stories of the 2012 election was the failure of some of the big name right-wing PACs to win many races. The Sunlight Foundation calculated the relative effectiveness of a number of right-wing PACs and found that most of their money did not buy success.
The National Republican Congressional Committee had only a 31.8 percent percent success rate.
The U.S. Chamber of Commerce only had a 6.9 percent success rate.
Karl Rove’s non-profit, Crossroads GPS, did a little better, spending $70 million with a 14.43 percent success rate. But his American Crossroads Super Pac had only a 1.29 percent success rate after spending over $104 million.
The NRA’s Legislative Institute had only a 10.74 percent success rate.
But the NRA main PAC wasn’t just your run of the mill failure of the 2012 election year. It won the prize for the very worst performance of the entire gang. In fact of the $11.1 million it spent, only .83 percent went to winning candidates.
And to make matters worse, it didn’t just have a dismal batting average; many progressive PACs spent just as much, and were much more effective.
The League of Conservation Voters raised and spent $11 million, but instead of a .83 percent success rate, they had an 83 percent success rate.
Planned Parenthood’s two PACs raised and spent over $11 — and had a 98 percent success rate.
Part of the reason for the NRA’s horrible success rate is the fact that rather than back candidates that support the Second Amendment — a goal endorsed by many of its individual members — it has become for all practical purposes a wing of the Republican Party.
But that isn’t the only disjuncture between the interests of NRA members and those of its officers and lobbyists.
Reason #2. Turns out that the officers and lobbyists of the NRA actually represent weapons manufacturers, not rank and file gun owners. That’s why they refuse to support common sense restrictions on military style assault weapons, magazines that hold a hundred bullets, or background checks for anyone who buys a gun, even though most Americans — and many gun owners — support these measures.
A CBS News poll showed that 57 percent now support stronger laws, an 18-point increase since last April (39 percent). A USA Today/Gallup poll showed a similar trend, with 58 percent supporting stronger laws, 15 points above the level of support in October 2011 (43 percent).
In a CNN/ORC poll, the most pronounced shift was on support for a ban on assault guns like the AK-47, with 62 percent of Americans supporting such a ban, a 5-point increase from last August.
In fact, according to the CNN/ORC poll, 95 percent of all Americans think that everyone who buys a gun should have to undergo a background check. A December Washington Post poll shows this strong support for universal back ground checks extends to gun owners as well. Many people believe background checks are already required for all gun purchases, but the fact is that 40 percent of all gun sales are “private transactions” — at gun shows or from private gun sellers where no background check is currently required. That’s like having two lines in airport security — one that checks for bombs and weapons and one that doesn’t. Which one do you think would be chosen by those who seek to do us harm?
And to make matters worse, databases of many states are not maintained. Bottom line: it easy for dangerous criminals and the mentally ill to buy deadly weapons.

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If you know anyone who is dithering over the need for filibuster reform, refer them post-haste to Lee Fang’s “Lobbyists Who Profit From Senate Dysfunction Fight Filibuster Reform” at The Nation. Even though Dems have some anxieties about the political environment in the U.S. Senate after the 2014 mid terms, since Republicans have an edge with respect to the disproportionate number of vulnerable Senate seats held by Dems, Fang makes it clear how utterly corrupt is the current system and the need for repair:

I’ve detailed before how lobbyists, even agents for foreign governments, have secured Republican filibusters at a shocking rate….The interesting dynamic for me is, how money in politics has incentivized this contraction of democratic governance. Here are just a few examples of how powerful industries have usurped the normal gears of government, and used Senate obstruction to push policies that punish ordinary Americans and the environment:
• Senator David Vitter (R-LA) placed holds on Obama EPA nominees to delay scientific assessments on the health risks of formaldehyde, which is produced by some of his largest campaign contributors.
• According to a new report from Public Campaign Action Fund, Republican Senate Leader Mitch McConnell (R-KY) has collected a hundreds of thousands in funds from the same industries he has protected with filibusters, particularly from oil companies and the finance sector. McConnell has led filibusters to protect oil subsidies, to block efforts to mitigate the mortgage crisis, and against campaign disclosure reforms.
• Senator Richard Shelby (R-AL) placed a “blanket hold” on every Obama nominee to force the administration to accept a Northrop Grumman contract to build a $35 billion refueling tanker in Mobile, Alabama. Northrop Grumman is a major Shelby donor.
• Senator John McCain (R-AZ) blocked the nomination of one of Obama’s most important Department of Labor nominees for months, which many believe led the US Chamber of Commerce to aggressively support McCain during a contentious primary with a Tea Party-backed candidate in 2010.
• Senator Mary Landrieu (D-LA), a close ally of the oil and gas industry, temporarily blocked Obama’s nominee for the Office of Management and Budget to extract an administration promise to allow more oil drilling leases in the Gulf of Mexico following the Deepwater Horizon catastrophe.
• Senator Bob Corker (R-TN) filibustered the Federal Aviation Administration reauthorization bill in order to demand a policy that prevents FedEx drivers from unionizing. FedEx is Corker’s third-highest campaign donor.

Fang could probably have gone on and on with many more examples. Such are the fruits of the easy-sleazy filibuster “rules” currently in place. If Dems do nothing about it before the 2013 opportunity expires, the claim that gridlock is entirely the fault of the Republicans will lose credibility.

For an exceptionally-lucid take on The Deal, check out John Judis’s New Republic post, “Obama Wasn’t Rolled. He Won!,” which explains:

…In the election, Obama framed the campaign in classic Democratic terms as a contest of the party of the common man against the party of the rich, while carefully targeting the new Democratic demography. And in the two months since his reelection, he carried through on the promise of the campaign by centering the fiscal cliff negotiations on ending tax cuts for the wealthy.
The bill, the American Tax Payer Relief Act, raises tax rates back to 39.6 percent for those making over $400,000; limits deductions and credits for those making over $250,000; extends unemployment insurance; expands the earned income tax credit; and gives Congress another two months to prevent sequestration. Some of my colleagues argue that he could have gotten more, but I don’t think so. The final result, approved by the House of Representatives, saves the country from another fiscal train wreck. It also positions Obama and the Democrats very well in future fights with a Republican Party that is becoming an embattled outpost for addled billionaires and white Southern revanchists. It may not happen during Obama’s second term, but the GOP may be on the way to marginalizing itself as a political party.

“An embattled outpost for addled billionaires and white southern revanchists” has to be the most apt description of today’s GOP yet written. It’s tempting to add “and their equally-unhinged political munchkins,” but that would be gilding the lily.
Judis credits President Obama with successfully achieving his central goal in the negotiations — securing a compromise which “protected consumer demand and jobs” needed to prevent imperiling the recovery. he adds,

…The very act of avoiding the fiscal cliff and the ensuing weeks of clamor or crisis will protect America’s global reputation as a “safe haven” for investors. That’s no small matter, because foreigners’ willingness to hold and invest in dollars is a major reason why interest rates have not gone up.

In addition, adds Judis, Obama and Democratic leaders maneuvered Republicans into “a position where, in order to protect tax cuts for the wealthy, they had to risk increasing taxes for everyone by letting the country go over the cliff,” which “robbed them of what has been their defining issue. They are now left with advocating spending cuts, which, as it turns out, are only popular in the abstract.”
The President did an excellent job of leveraging the bully pulpit, explains Judis. “He campaigned publicly. He framed the issues. He put the Republicans on the defensive in a way that he failed to do during much of his first term.”
Judis acknowledges that there are legitimate concerns that “about whether Obama got enough from the negotiations.” and wonders “…Could Obama have gotten an agreement on the debt ceiling or the sequester instead of postponing these battles?” But he concludes that “Obama did not have the power to force Senate and House Republicans into a last minute deal on these issues without making very unfortunate concessions on spending and taxes.”
Looking ahead, Judis adds,

…The fiscal cliff deal took tax rates out of the discussion. What’s left are spending cuts. If Obama allows the Republicans and obnoxious groups like Fix the Debt to frame the issues, he’ll be in trouble.And he did seem to fall into this trap briefly when he proposed changing the cost of living index for Social Security. But if he reminds the public that what the Republicans andBut if he reminds the public that what the Republicans and their allies want to do is cut their Medicare and Social Security, he and the Democrats should be in good shape.

As a consequence of The Deal, Judis sees the GOP being ripped apart by divisions between House and Senate Republicans, widening regional differences and even a split in conservative lobbying groups who had oppositional interests in the fiscal cliff negotiations. As Judis notes, the reverberations included this enjoyable capper for Dems:

…After the Republican leadership refused to bring a Sandy hurricane relief bill to the floor before the end of the session – effectively killing it – New York Republican Peter King called on New York and New Jersey Republicans to withhold donations to the GOP. New Jersey Governor Chris Christie blew his top at the House Republicans.

Democratic unity is going to be critical in the months ahead to hold the edge we have achieved. Says Judis “…A process of erosion is under way that will weaken the Republicans’ ability to maintain a united front against Democratic initiatives. That could happen in the debates over the sequester and debt ceiling if Obama and the Democrats make the kind of public fuss that they did over fiscal cliff.”

This article by Democratic strategist Robert Creamer, author of Stand Up Straight: How Progressives Can Win, is cross-posted from HuffPo:
Politico quotes conservative columnist Charles Krauthammer as saying that the “fiscal cliff” bill passed by the Congress last night was a “complete rout for Democrats” and ‘”complete surrender” for the GOP. That may be overstating the case, but there is little question that raising tax rates for top income earners is a very big deal.
The last time Republicans joined Democrats to increase taxes on the wealthy was 1990. Yesterday, they were forced to join Democrats in increasing the top income tax rate to the Clinton-era levels of 39.6 percent — and increasing the capital gains tax rate from 15 percent to 20 percent.
The top earners’ rate was last increased in 1993. Then, Democrats controlled both houses of Congress and still won in the House with only one vote to spare. Vice President Gore was brought in to cast the deciding vote in the Senate.
For two decades, the protection of high-income people from tax rate increases has been the central driving principle of the Republican Party. It has been their Holy Grail. It is the one thing that the right-wing oligarchs who spent all that money on Republican elections last year really care about.
Unfortunately, the Republicans have leverage in our government, since they still control what comes to a vote in the House.
The fact that the president, Democrats in Congress and the Progressive Movement pushed the Republicans into a place where they felt compelled to help pass an increase in the top rate is an astounding political achievement — particularly without being forced to trade cuts in programs for the poor and middle class like Medicare and Social Security.
In the debate leading up to the vote that increased the top rate in 1993, Republicans predicted it would cause a giant recession. What followed instead was the creation of 22 million new jobs, and ultimately federal budget surpluses as far as the eye could see.
The increase in the top rate will not immediately create 22 million new jobs. Nor will it create a budget surplus. But it is an indispensible ingredient in any serious plan to assure the long-term economic and fiscal health of our country — and the long-term survival of the middle class.
The fundamental economic problem facing America is growing income inequality. This is not just a problem of fairness — it is a ball and chain on our long-term economic growth.
Over the last 20 years our per capita Gross Domestic Product has grown — so has our per capita productivity. That means that each of us can produce more goods and services with the same amount of work.
But the wealthiest two percent has syphoned off all of that economic growth, and as a result everyday Americans haven’t had the money to buy the new products and services that the economy produced. That has been a formula for economic stagnation — and the demise of the middle class.
Long-term economic growth requires that the fruits of that growth be spread fairly throughout the economy or it cannot be sustained. It’s that simple.
The increase in the top rate generates about $700 billion of new revenue (including interest savings) over the next 10 years. That will lessen pressure to cut Social Security, Medicare, Medicaid, college grants, and the vast array of other government services that go to benefit – and increase the incomes – of everyday Americans. It is a step in the process of creating a fairer – and more economically sustainable — distribution of the benefits of economic growth and the restoration of the American middle class.
These increases in revenue from the highest income earners must be viewed as just a down payment in the new revenue from the wealthy needed to close the long-term structural deficit that opened up when George Bush the GOP passed the Bush tax cuts and launched two unpaid-for wars. But it is a critical first step.
The same is true of the increase in the estate tax rate from 35 percent to 40 percent — although the president had pushed hard for the old rate of 45 percent. The only people who pay estate taxes, by definition, are the sons and daughters of multi-millionaires.
In the case of both the income threshold for the highest tax rate and the exemption for the estate tax, Democrats made concessions to Republicans. Instead of making the income tax rate apply to incomes above $200,000 for individuals and $250,000 for couples, the president agreed to $400,000 for individuals and $450,000 for couples. And instead of a $3.5 million individual exemption and $7 million per couple for the estate tax, the exemption went to $5 million for individuals and $10 million for couples.

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