Mother Jones Kevin Drum: Is the Deficit Commission Serious?

[flpoljunkie]

Is the Deficit Commission Serious?

— By Kevin Drum
Wed Nov. 10, 2010



Here's what the chart means:

Discretionary spending (the light blue bottom chunk) isn't a long-term deficit problem. It takes up about 10% of GDP forever. What's more, pretending that it can be capped is just game playing: anything one Congress can do, another can undo. So if you want to recommend a few discretionary cuts, that's fine. Beyond that, though, the discretionary budget should be left to Congress since it can be cut or expanded easily via the ordinary political process. That's why it's called "discretionary."

Social Security (the dark blue middle chunk) isn't a long-term deficit problem. It goes up very slightly between now and 2030 and then flattens out forever. If Republicans were willing to get serious and knock off their puerile anti-tax jihad, it could be fixed easily with a combination of tiny tax increases and tiny benefit cuts phased in over 20 years that the public would barely notice. It deserves about a week of deliberation.

Medicare, and healthcare in general, is a huge problem. It is, in fact, our only real long-term spending problem.

To put this more succinctly: any serious long-term deficit plan will spend about 1% of its time on the discretionary budget, 1% on Social Security, and 98% on healthcare. Any proposal that doesn't maintain approximately that ratio shouldn't be considered serious. The Simpson-Bowles plan, conversely, goes into loving detail about cuts to the discretionary budget and Social Security but turns suddenly vague and cramped when it gets to Medicare. That's not serious.

There are other reasons the Simpson-Bowles plan isn't serious. Capping revenue at 21% of GDP, for example. The plain fact is that over the next few decades Social Security will need a little more money and healthcare will need a lot more. That will be true even if we implement the greatest healthcare cost containment plan in the world. Pretending that we can nonetheless cap revenues at 2000 levels isn't serious.

And their tax proposal? As part of a deficit reduction plan they want to cut taxes on the rich and make the federal tax system more regressive? That's not serious either.

Bottom line: this document isn't really aimed at deficit reduction. It's aimed at keeping government small. There's nothing wrong with that if you're a conservative think tank and that's what you're dedicated to selling. But it should be called by its right name. This document is a paean to cutting the federal government, not cutting the federal deficit.

http://motherjones.com/kevin-drum/2010/11/deficit-commission-serious

[NRaleighLiberal]

1. Revealing, isn't it?

I just found that on TPM and was going to post it....maybe a new definition of insanity? Spend most time/effort on solving 2% of the problem because it is politically expedient (for the republicans)...and pretend that 98% of the problem will go away.

Will be interesting to watch how this proceeds....the message is there for the Dems to use. But will they/can they use it, or is it too complex for the masses?

[cascadiance]

2. And you can see how the Republicans have USED Medicare spending...

... to further this agenda.

By putting in the crap about the government not being able to negotiate pharma drugs prices (THEIR anti-capitalist solution) and not allowing for us to import cheaper drugs from neighboring countries, they're adding to Medicare's cost.

By putting in Medicare Advantage program, we're providing more of a gift to the private sector there by privatizing part of the system and in effect inflating costs too. When Dems try to cut that cancer out of the system with recent HCR legislation, of course then the corporate media ignores what is really going on and doesn't talk about how that's trying to fix it so we're not giving more corporate welfare out. By doing that it allowed many Republicans on the campaign last year to pummel us all with these Citizen United enabled political ads (that were being used instead of public debates where a Democrat could counter this spin), that the Democrats were FOR cutting Medicare (without explaining the details of what they were trying to cut). Of course the uninformed will vote with the mistaken impression that the Democrats are the only party that is being bought off by corporate interests when they were the ones in charge.

What the Dems should do is propose a bill to remove the cap on payroll tax and CUT the payroll tax rate to the point that a person making $250k pays the SAME amount in raw dollars they are paying now based on their full salary amount ($250k) rather than the cap amount (around $106k). That way everyone under $250k gets a tax CUT, and it is a simple flat tax on everyone and it makes it harder for companies to justify matching payroll taxes (that they have to put in as well) for wealthy executives than they have now (which is capped at $106k for them as well). That would make corporate exec salaries that are too high more of a liability, and the reduced expense for payroll tax for average people making less than $250k less of a liability, especially when you get to those making $106k or less when it comes to doing layoffs.

They might not pass it, but they could get congress critters on record on how they stand on this. With the lame duck session, the blue dog coalition will have less power as half of its members are on their way out now. They don't have as much to gain by continuing to vote with the rest of the coalition on things if they're not in office next term. And in fact the progressive caucus could tell them that perhaps the outgoing blue dogs should go on record trying to do something for the average working person before they leave office so that it might help them get elected later if they have any kind of soul in their bodies.

If this could be passed in the House and brought to the Senate, then you'd also have a way to put the senators on the spot too on how they support the American people as well.

This is the sort of step that's needed now to plant the seeds for better HCR that hopefully we can get done in 2012 if we can get the congress back.