Do you think...

[elsid13]

Some talk about getting the deficit under control, do you think they have the balls to do it

WASHINGTON – In a politically incendiary plan, the bipartisan leaders of President Barack Obama's deficit commission proposed curbs in Social Security benefits, deep reductions in federal spending and higher taxes for millions of Americans Wednesday to stem a flood of red ink that they said threatens the nation's very future.

The White House responded coolly, some leading lawmakers less so to proposals that target government programs long considered all but sacred. Besides Social Security, Medicare spending would be curtailed. Tax breaks for many health care plans, too. And the Pentagon's budget, as well, in a plan designed to cut total deficits by as much as $4 trillion over the next decade.

The plan arrived exactly one week after elections that featured strong voter demands for economic change in Washington. But criticism was immediate from advocacy groups on the left and, to some extent, the right at the start of the post-election debate on painful steps necessary to rein in out-of-control deficits.

The plan would gradually increase the retirement age for full Social Security benefits — to 69 by 2075 — and current recipients would receive smaller-than-anticipated annual increases. Equally controversial, it would eliminate the current tax deduction that homeowners receive for the interest they pay on their mortgages.

No one is expecting quick action on any of the plan's pieces. Proposed cuts to Social Security and Medicare are making liberals recoil. And conservative Republicans are having difficulty with options suggested for raising taxes. The plan also calls for cuts in farm subsidies, foreign aid and the Pentagon's budget.

The document was released by former Democrat Erskine Bowles, a former Clinton White House chief of staff, and Republican Alan Simpson, a former senator from Wyoming.

Acknowledging the controversy involved, Simpson quipped to reporters: "We'll both be in a witness protection program when this is all over, so look us up." Said Bowles: "This is a starting point."

Controversial or not, Bowles said serious action was demanded. He declared, "This debt is like a cancer that will truly destroy this country from within if we don't fix it."

The government reported separately Wednesday that the deficit for last month alone was $140.4 billion — and that was 20 percent lower than a year earlier. The red ink for all of the past fiscal year was $1.29 trillion, second highest on record, and this year is headed for the third straight total above $1 trillion.

Current deficits require the government to borrow 37 cents out of every dollar it spends.

Still, the plan was rejected as "simply unacceptable" by House Speaker Nancy Pelosi, D-Calif., a top Obama ally.

The White House held its fire. Said spokesman Bill Burton, "The president will wait until the bipartisan fiscal commission finishes its work before commenting." He called the ideas "only a step in the process."

The Social Security proposal would change the inflation measurement used to calculate cost-of-living adjustments for benefits, reducing annual increases. It immediately drew a withering assault from advocates for seniors, who are already upset that there will be no inflation increase for 2011, the second straight year.

The plan would also raise the regular Social Security retirement age to 68 by about 2050 and to 69 in 2075. The full retirement age for those retiring now is 66. For those born in 1960 or after, the full retirement age is now 67.

Better-off beneficiaries would receive smaller Social Security payments than those in lower earning brackets under the proposal, and the amount of income subject to Social Security taxes would be increased.

"The chairmen of the Deficit Commission just told working Americans to 'Drop Dead,'" AFL-CIO President Richard Trumka said in a statement.

From the right, anti-tax activist Grover Norquist — whose opinions carry great weight among Republicans — blasted the plan for its $1 trillion in tax increases over the coming decade. But Bowles and Simpson say eliminating costly tax deductions could bring income tax rates way down.

For every $1 of new revenue, the plan demands $3 in spending cuts, and that was acceptable to panel member Tom Coburn, a Republican senator from Oklahoma. "If we do the cuts, I'll go for it," he said. "We may have to go for some revenues at some point."

The entire commission is supposed to report a deficit-cutting plan on Dec. 1, but panel members are unsure whether they'll be able to agree on anything approaching deficit cuts of the size proposed. And even if they could, any vote in Congress this year would be nonbinding, Simpson said.

"This is not a proposal I could support," said panel member Rep. Jan Schakowsky, D-Ill. "On Medicare and Social Security in particular, there are proposals that I could not support."

The release of the plan follows midterm elections that gave Republicans the House majority and increased their numbers in the Senate. During the campaign, neither political party talked of spending cuts of the magnitude offered Wednesday, with Republicans proposing $100 billion in cuts to domestic programs passed each year by Congress — but with no specifics.

Wednesday's proposal would leave Obama's new health care overhaul in place, while greatly strengthening its cost control provisions, including a board with the power to make cuts in Medicare payments to providers.

For most Americans with job-based health coverage, the biggest change would be to limit or eliminate altogether the tax-free status of employer-provided health benefits, which would provide a stiff nudge to force people into cost-conscious insurance plans.

To deal with the rising costs of Medicare and Medicaid, the giant health care programs for seniors and low-income people, the proposal calls for limiting annual spending increases to no more than 1 percent above the growth rate of the economy.

It outlines a series of strategies to achieve that goal, including changing provider payments to reward quality instead of sheer volume, demanding rebates from drug companies that want to participate in Medicare and raising cost-sharing for Medicare recipients while also putting in place a limit on their out-of-pocket costs.

"It's a very provocative proposal," said a Republican panel member, Rep. Jeb Hensarling of Texas. "Some of it I like. Some of it disturbs me. And some of it I've got to study."

Other proposals by Bowles and Simpson include:

_Increasing the gasoline tax by 15 cents a gallon to finance transportation programs.

_A three-year freeze in the pay of most federal employees and a 10 percent cut in the federal work force.

_Eliminating all congressional pet projects, known as earmarks.

The plan also calls for a major overhaul of both the individual income tax and the corporate tax systems with the idea of lowering overall tax rates, simplifying the tax code and broadening the taxpayer base.

For individuals and families, the proposal would eliminate a host of popular tax credits and deductions, including the child tax credit and the mortgage interest deduction. However, it would significantly reduce income tax rates. The top rate would drop from 35 percent to 23 percent.

The deduction that companies take for providing health insurance to their employees would be eliminated, but the corporate income tax rate would be reduced from 35 percent to 26 percent, and the government would stop taxing overseas profits of U.S.-based multinational corporations.

Even with the dramatic proposals, the Bowles-Simpson plan would leave deficits of about $380 billion in 2015, the year by which Obama tasked the group with balancing the federal budget, except for interest payments on a national debt that now stands at $13.7 trillion. If the changes to Social Security are dropped, the deficit would be about $400 billion in 2015.

[Pony Boy]

This one will create a lynch mob.......

"Equally controversial, it would eliminate the current tax deduction that homeowners receive for the interest they pay on their mortgages.

[Spider]

should bethe spider dave ticket

[elsid13]

Originally Posted by Spider

should bethe spider dave ticket

Well theDave is MIA, you might need a new partner

[Spider]

Originally Posted by elsid13

Well theDave is MIA, you might need a new partner

He went MIA cause he had the same crazy notion his name should be first ......

[Rohirrim]

The draft proposal released as a surprise yesterday by the two chairmen of President Obama's fiscal commission is conceived and written in panic. It is a profoundly ideological set of policy prescriptions. The co-authors are counting on national alarm over the current budget deficit to make extreme proposals seem reasonable. It is an outrageous, misleading document, unsupported by evidence.

The current deficit of $1.5 trillion is no reason for alarm. It is the result of the recession, which created large reductions in tax revenues, as well as increases in automatic stabilizers like unemployment insurance. The Obama stimulus of $800 billion also is part of the deficit. But as a modeled by economists Alan Blinder and Mark Zandi, the deficit would have been higher without the stimulus.

The longer term deficit is also too often attributed to "big government." The projection of the Congressional Budget Office, adjusted for some realistic policy changes, such as the extension of the Bush tax cuts, is that the deficit will actually fall substantially to 4 percent of GDP and stay there for some time. Debt rises to 77 percent of GDP.

This increase is hardly trivial and a 4 percent deficit may not be sustainable. But increases are not the result of rising outlays for Social Security, Medicare or Medicaid, contrary to what many, including members of the media, seem to think. The higher deficit and debt levels are overwhelmingly the result of three factors: recession, war spending, and the Bush tax cuts of the early 2000s.
http://www.huffingtonpost.com/jeff-m..._b_782351.html

But the White House commission draft proposal goes far beyond focusing on healthcare. First, it wants to reduce radically the income tax rate on Americans. One option is to reduce the top rate of 35 percent to 23 percent, or at the least to 28 percent. This is simply right wing ideology at work, and has nothing to do with deficit issues. To the contrary, the authors are using deficit alarms to present a new tax agenda. Is Obama really going to stand behind it? There is no commonly accepted evidence that current marginal tax rates, or even higher ones, suppress economic growth.

What did Obama expect out of a commission with Alan Simpson in one of the chairs?

[TonyR]

Some interesting comments on it from Ross Douthat:

Yes, it’s tilted toward spending cuts, and away from tax increases. But look at the way it cuts spending and raises taxes. It means-tests Social Security benefits for high earners and raises the cap on taxable income, while also adding a larger benefit for the poorest seniors. Its hypothetical discretionary spending reductions don’t come from anti-poverty programs, for the most part: They come from cutting the defense budget, cutting the federal workforce, cutting farm subsidies, etc. It raises tax revenue by reducing tax credits and deductions that almost all overwhelmingly benefit the affluent. (This would be especially true in the scenario I’d prefer, in which the child tax credit and the earned-income tax credit stick around.) It would cap revenue at 21 percent of G.D.P., which would be higher than any point in recent American history, and well above the average for the last thirty years. And it does all of this, as Chait himself notes, while assuming that Obamacare — the capstone of the liberal welfare state — would remain essentially unchanged.

http://douthat.blogs.nytimes.com/201...it-commission/

[L.A. BRONCOS FAN]

Ronald Reagan's Budget Director Says Repeal the Tax Cuts: Republicans "Should be Ashamed"

BY MARK KARLIN

Peggy Noonan, a speechwriter who helped craft the Disneyesque aura for Ronald Reagan, wrote a book, "What I Saw at the Revolution: A Political Life in the Reagan Era." It lavished praise on the "Gipper."

David Stockman, who was Reagan's budget director, has gone in another direction.

He's renouncing deficit-building tax cuts, calling for their rollback.

"We've had a 30-year spree of really phony prosperity in this country," Stockman recently told Leslie Stahl on "60 Minutes."

Stockman derided the "anti-tax religion" of the GOP.

"Well it's become in a sense an absolute. Something that can't be questioned, something that's gospel, something that's sort of embedded into the catechism and so scratch the average Republican today and he'll say 'Tax cuts, tax cuts, tax cuts,'" Stockman told Stahl. He added, "To stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves."

In short, tax cuts provide the illusion to the American public that Social Security, Medicare, military spending and government funded public expenditures - such as highways - can be had without citizens paying a fair share.

As for the wealthy, Stockman was loaded for bear in another appearance, this one on ABC News: "Two years after the crisis on Wall Street, it has been announced that bonuses this year will be $144 billion, the highest in history. That's who's going to get this tax cut on the top, you know, 2 percent of the population. They don't need a tax cut. They don't deserve it."

When Stockman declares, "We're now becoming the banana republic [of] finance," wise men and women should listen.

After all, he was the person who put together the largest tax cuts in US history.

He knows of what he speaks.

[L.A. BRONCOS FAN]

Poll: Voters Would Rather Tax The Wealthy Than Cut Social Security by Wide Margin