Deficit Plan Matches $3.8 Trillion Math With Tough Politics

[dipsydoodle]

Source: Bloomberg News

A plan offered by the leaders of President Barack Obama’s commission to reduce the federal deficit might work. It just won’t happen.

The co-chairmen proposed a $3.8 trillion deficit-cutting plan yesterday that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks including the mortgage-interest deduction. It would reduce the annual deficit from $1.3 trillion this year to about $400 billion by 2015 and start reducing the $13.7 trillion national debt.

“Mathematically it apparently works,” said Stan Collender, a former Democratic House and Senate budget analyst and managing director of Qorvis Communications in Washington. “Politically, it is going to have a lot of trouble getting support from more than just the two co-chairs.”

The plan would raise the gas tax, slash defense spending and farm subsidies and bring down health-care costs by clamping down on medical malpractice suits. The Social Security retirement age would rise to 68 in about 2050 and 69 in about 2075.

Read more: http://www.bloomberg.com/news/2010-11-10/deficit-reduction-panel-s-plan-would-seek-to-cut-social-security-medicare.html

[rocktivity]

1. Eliminate the SocSec salary cap, Medicare for all, roll back the tax cuts, cut defense spending

end the Gulf wars. Debt crisis over.

:headbang:
rocktivity

[KansDem]

7. What you said times 3.8 trillion.

It never fails to amaze me how the obvious escapes the sight of these "elected leaders."

[rocktivity]

10. Of course it's obvious. Their problem is that isn't profitable.

They can't cash in on public options and nonexistent salary caps. and they need that extra money for paying off deregulation-friendly politicians and ad revenue-hungry media giants.

:headbang:
rocktivity

[ProudDad]

16. You've got that right...

They won't though -- it would hurt the GDP...

[Mark D.]

9. It's Not Complicated.

Everything you say is true. I'll ad what Kucinich suggested. LOWER retirement to 60. I'll ad to that, means-test SS so millionaires stop getting SS checks once they get back what they paid in, with interest, and multi-millionaires (oh, over 10 million) get no benefits. That and bringing back the inheritance tax at estates over a million, vs. the 3.5 million. They could also increase the retirement benefits across the board by 50% probably, with what would be saved. It would slow down the 'deficit / debt reduction'. But you know what? It would cause an explosion of workers above 60 to retire (for 50% more than they expected to get? Hell yeah!). Guess what? Millions of jobs now open, companies will need to hire a LOT more workers, very quickly.

Not just that, there will be such market saturation of openings, union or not, companies will HAVE to pay higher salaries. This will most greatly benefit the middle and lower income earners. What does that mean? They spend, per-capita, the highest amount of any disposable income. They are the most struggling, on the verge of foreclosure and insolvency. They would be freed of that, and could put LESS into retirement funds (knowing SS is more) and would spend that would be savings more. We are talking about an economic boom. Boom times helped lower the deficit in the 90s. It can happen again. Of course, since this would all WORK, at the expense of the rich elite, who buy votes, and control the simpleton 'know-nothings' minds, it won't pass, ever.

[rocktivity]

14. Thank you for explaining means testing--I wasn't exactly sure what it was about.

I don't have a problem with anyone who pays into SS getting a check. But millionaires shouldn't get more then what they paid in.


:headbang:
rocktivity

[One_Life_To_Give]

17. SS Cap removal $100Billion

Rolling back Bush Tax Cuts $70Billion
Defense $895 Billion

Current Federal Deficit $1,500Billion

[xchrom]

2. Well they're going to get parts of this.

We will see who shoulders most of the burden.

[pattmarty]

8. Any bets?

[yurbud]

3. the tax cuts to the top rate are a dead giveaway who this is supposed to help

[sofa king]

12. And the gas tax.

Any flat tax is a handout to the wealthiest Americans. As a percentage of income, a 10% gas tax hike is about 1000 times larger for me than it is for someone making $4 million a year.

It also makes me less productive, less willing to spend my money outside of a tiny geographic area, less able to save, shrinks the radius in which I can find cost effective work, and keeps me totally unable to insure myself or otherwise protect myself from the harm and reversals which will inevitably come. Sooner or later, the government will have to pay for disposing of my pauper's body.

On the other hand, forcing that same one wealthy person who profited from the two Bush recessions, the two Bush wars, the funneling of middle-class savings into bank foreclosures and so on to pay just one percent more would deliver ten times my total annual income to the treasury.

If there were any honesty at all to this debate, both sides would concede that impoverished Americans can never cover the costs of sheltering the wealthiest Americans from an honest progressive income tax schedule.

[enlightenment]

4. Unfortunately, people can't eat math.

Nor will it put a roof over their heads, or pay for the medical care they desperately need.

Anyone can come up with a perfect solution once they eliminate the human element from the equation.

[jmondine]

5. "Might work" my ass.

Social Security and Medicare do NOT contribute to the deficit. Medical malpractice comprises about 2% of all medical costs.
The author of this story has traded being "balanced" for being informed.

[South End Liberal]

6. Cat food for you & me, tax cuts for the rich.

That's what James Ridgeway is predicting over at motherjones. He thinks that, by the end of this year, the Dems will end up making some cuts to SS and give the Repubs an extension of the Bush tax cuts for the wealthy and call it deficit reduction.

If destroying the middle class is the goal, then mission accomplished. Between the real estate meltdown, wall street meltdown/bailout by main street, devaluation of the dollar, paying for endless (fake) wars - by all means, cut the one safety net working Americans have left!!!

The fact that this is coming out of a Democratic White House just warms my soul! :sarcasm:

[briteleaf]

11. Who thinks it's better to cut social programs instead of 2 unwarranted wars?

Corporate and ultra-wealthy interests.

[grahamhgreen]

13. The Greatest Generation's tax rates WORKED! We could end the debt in 10 years.

Eliminating the Bush tax cut (4% increase) will raise 700 billion in revenues in 10 years. (http://www.nytimes.com/2010/08/11/us/polit... ... )

Which means a 40% increase on the top tax rate to a rate similar to the pre-Reagan rate of 79.6% would yield 7 trillion in 10 years.

A 58% increase to 94% would yield over 10 trillion dollars over the next 10 years.

So our deficit of 1.3 trillion would be gone in a little over a year and our DEBT would be gone in under 10 years (as we pay it down).

Simple! Done and done - and we haven't added the critical taxes to investment income yet!

[ProudDad]

15. "Slash defense spending"????

:wtf:

$100 billion out of $1.2 TRILLION???

Bullshit...

I've already detailed how to handle this temporary "debt/deficit non-problem"...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4609226&mesg_id=4612418

However, in the long run corporate capitalism and human stupidity will kill us all by the end of the century through the magic of "Catastrophic Global Climate Destabilization for Short-Term Profit(tm)"...