Today, the presidential budget commission's co-chairs came out with a plan to dramatically cut entitlement spending and reduce the budget deficit from over $1 Trillion per year to $300 billion per year by 2015:
http://www.msnbc.msn.com/id/40111748/ns/politics-…
In particular, according to the Huffington Post, the plan has the following ideas:
How they get there is going to be a matter of contention as other commission members have already stressed their displeasure with the suggestions. But here are a few of the more noteworthy suggestions.-Roll discretionary spending back to FY2010 levels for FY2012, requires 1% cut in discretionary budget authority every year from FY2013 though 2015;
-Fully offset the cost of the "Doc Fix" by asking doctors and other health providers, lawyers, and individuals to take responsibility for slowing health care cost growth;
-Reduce farm subsidies by3 billion per year by reducing direct payments and other subsidies;
-Achieve100 billion in Illustrative Defense Cuts;
-Index retirement age for Social security to increases in longevity. "This option is projected to increase the age by one month every two years after it reaches 67 under current law, meaning the normal retirement age would reach 68 in about 2050 and 69 in about 2075." There will be a "hardship exemption" for those unable to work beyond 62;
-Give retirees the choice of collecting half their benefits early and the other half at a later age to minimize impact of actuarial reduction and support phased retirement options;
-Reduce corporate tax rate to 26% and permanently extend the research credit;
-Gradually increase gas tax to fund transportation spending.
http://www.huffingtonpost.com/2010/11/10/debt-com…
Already, many critics- particularly professional Capitol Hill residents- are calling this proposal bitter medicine. But for anyone who plans on living in this country for the next ten years, cutting spending and hiking taxes is the best- actually arguably, the only long-term option. This is particularly true for people under thirty, as I suspect most of our readers are. Americans have been working like crazy to balance their own budgets over the past three years, and it's time for Congress to do the same with ITS budget.
Please, contact your senators and congressional representatives and tell them whether we should put our long-term responsibilities over our short-term situation. For your convenience, I've listed the senators' contacts for New York and New Jersey:
NEW YORK:
http://schumer.senate.gov/new_website/contact.cfm
http://gillibrand.senate.gov/contact/
NEW JERSEY:
http://menendez.senate.gov/contact/
http://lautenberg.senate.gov/contact/routing.cfm
Let's put America's budget back on track- even if it means some higher taxes and sleepless nights in the short run.
This is absolutely fantastic, it is about goddamn time. A lot of these are going to be tough pills to swallow, and I really admire the balls of the co-chairs. They're going to get absolutely skewered for this by their opponents, and still they had the guts to bring this forward.
The entitlement reform is DESPERATELY needed, and will be some of the most contentious issues - strong lobbies for both social security and medicare. Raising the retirement age has been the elephant in the room that desperately needs to be addressed, but anyone that even thinks about it gets destroyed in the next election cycle.
Bravo - get out and support these guys for introducing some bold and what's sure to be unpopular legislation.
This will never go through. Why? Because it makes sense. Its just like losing weight - you need diet and exercise. The government keeps buying expensive workout videos, but never diets.
Put spending on a diet, use some of the old tapes we bought in the 90's and we will be sleek and sexy in a decade.
I got a boner when I saw the reduction in farm subsidies.
This can't be right. Too many things on that list actually make sense.
Hmmm...democratic president (Clinton) balances budget, republican president (Bush) fucks up budget, democratic president (Obama) makes a good-faith effort to reduce budget deficit...hmmmm I think there is a pattern emerging
I am of the view that we get the best budgets and most political freedoms with a Democrat in the White House and a Republican congress.
Look, I wasn't really serious. And no, I don't want to get in a dumbass argument about this again.
And yes, I get that balancing the budget will take spending cuts that the dems will oppose. I am also very glad Nancy Pelosi and her minions wont be able to stop budget cuts.
BUT I want to highlight that this was a PRESIDENTIAL and BI-partisan commission that put this together. Pick the candidate, not the party.
We have similar views.
Why the fuck did you have to bring party politics into this? You and I both know that no one side is completely without blame. Stop making it seem like only the Republicans are at fault.
lol common sense reform and legislation? never gonna happen. maybe if we add some pork or DoD spending into the equation it wil get passed. i mean the government can't actually save money haha
This is a great idea and can't believe the people that came up with it. I doubt it passes, but would be great if it did.
I've met both Menendez and Lautenberg and they are both fucking tools who could care less about this. I will tell you that right now, they don't care about what's good for the people of NJ or the population of the US because they just want their power and influence. Lautenberg has lost touch with reality. When the ARC tunnel dispute came up, he woke up out of his coma just to make sure that he could help the pay to play special interest groups that keep him in power and wanted the ARC Tunnel construction contracts given to them at No-Bid rates.
Menendez, well... he's a disciple of George Norcross and will never give into anything that would benefit the people. I'm not going to tear into Robby because that would be a vitriolic piece full of real anger, hatred and ire towards him, both as the former boss of Hudson County and as our State Senator who got his job when a certain former governor of New Jersey that couldn't get reelected won his only term to run the state. They won't be on board for this, just like Jersey's own government won't help it's citizens out.
Now, medical fix aside (There are issues that I have with everything health care related since congress didn't get anything right to fix the problem, let alone slowing down the cost of care in the first place), I'm shocked that these suggestions are being tossed around and debated. It's better than what we're doing in Jersey to help fix our own budget issues, but I doubt this will be passed.
I think these measures are great, but in order to get this passed, the first thing that needs to be done is to remove the influence of special interest groups who helped put us here in the first place. Once we do that, then we can discuss the real work that needs to happen.
The hardest part is that Social Security and Medicare/Medicade are being funded by today's workers to pay out today's claims instead being placed aside for growth to pay for future benefits. These two systems are broken, and Social Security is heading towards bankruptcy, but no one wants to deal with those two issues because it's considered to be bad form. These two systems are huge spending sinkholes and need to be overhauled in order to improve them. Indexing Social Security won't work if there is no money for it.
I will admit that our congressmen and senators are on the right track, but they have a long way to go in order to get the right prescription for the medicine we need. This was something that has been said since 2008 when the market crashed, but no one started listening until now. It's a start though, and that's all that matters. Hopefully we can start fixing the problems with this and then move onto resolving the mark-to-market pricing issues on illiquid assets and revalue them at their true price.
I think Ronald Reagan wrote this.
Krugman made a fair criticism of the increased retirement age today. The rationale for raising the retirement age is the longer lifespan of the average American. However, lifespan has been flat for the lower class for decades.
I agree with most of what he is saying, but at the very least the report will underline the seriousness of the issue and, hopefully, give both parties some political cover to make unpopular decisions.
I would settle for elimination of the Bush tax cuts, but no further tax increases and an elimination of the estate tax.
As for those life expectancy numbers for the bottom half----are they only counting natural deaths, or are all the drug/crime related murders distorting the numbers?
My neighbor is a US Congressman and I asked him what he thought, and his response was "It's an interesting proposal. Something does need to be done." I winked and said "that's an interesting response" so we talked about his grandchildren instead.
In my opinion, public sector pensions and medicare pose a greater risk than SS. And they are all just inflating a healthcare bubble.
I definitely think top bracket marginal tax rates will move up to 85%+ by the end of this. So we might cheer spending cuts now, but tax rates will have to rise at some point as well. Everyone will have to feel the pain.
^^ I think 85% goes too far out on the laffer curve. Revenues are maximized at around 55-65%.
My reasoning is that we would return to Eisenhower era marginal rates for the top bracket(91%!!!). While this is far out on the Laffer curve, its easy to implement politically (that is, its easy to pitch to people not in the top bracket). Plus, it encourages people to start and grow their own businesses, where the owner would be taxed on capital gains (or depending on the structure, dividends, etc). Whatever the case may be, I'm sure you agree that we will see a substantial increase in top bracket (or even lower brackets, for that matter) marginal tax rates in upcoming years.
I know everyone says this every time they disagree with some new US government policy or election result, but if taxes were ever at 85%, I wouldn't even hesitate to move out of the country.
LOL 85% tax. You'd never see me in the country again.
There is way too much win in this plan for it to work... props to the guys who came up with it.
I may not have to run for office after all.
If we get this plan plus a return to the Clinton tax schedule, we've balanced the budget. We might even have a surplus.
TAKE THAT, PETER SCHIFF.
All you are missing now is the biggest hope driven bull market in history and the destruction of your chief economic/political/military/ideological opponent to simplify commerce and expansion.
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