It may have been unfair to form a preliminary opinion or preliminary headache about the findings and recommendations of the National Commission on Fiscal Responsibility and Reform based on Alan Simpson’s contempt for those Americans ( from August 2005 – Alan Simpson: Social Security Is ‘A Milk Cow With 310 Million Tits’) who are relying on Social Security to get them through retirement. On the other hand it turns out to have been justified. Paul Krugman has looked at the numbers – bullet points and it ain’t pretty.
Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.
It will take time to crunch the numbers here, but this proposal clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans. And what does any of this have to do with deficit reduction?
Let’s turn next to Social Security. There were rumors beforehand that the commission would recommend a rise in the retirement age, and sure enough, that’s what Mr. Bowles and Mr. Simpson do. They want the age at which Social Security becomes available to rise along with average life expectancy. Is that reasonable?
The answer is no, for a number of reasons — including the point that working until you’re 69, which may sound doable for people with desk jobs, is a lot harder for the many Americans who still do physical labor.
There are a combination of tax cuts and tax increases. That the proposals have both is to make every think they’ve taken the mythical high road to spread the pain. It’s the new new math. Taking away the Earned Income Tax Credit for people barely getting by is the same as giving someone who makes $250K a year a tax cut the same. Veterans would take hit paying for more of their own health care expenses. The middle-class – who correctly or not still think of home ownership as the American dream can kiss the home mortgage deduction goodbye. Medium to small businesses which are allowed a tax write-off for picking up their workers’ health-care costs? Those businesses can kiss that deduction farewell. See a trend here. Sacrifices must be made. Who is going to bare the biggest burden of these cuts in benefits and income? The working poor and middle-class. A slight increase in capital gains tax- back to Reagan era rates? Nope. We wouldn’t want Wall St wheelers and dealers to have to trade in the 7 series Bimmer for a 5 series. How about a progressive tax on polluters so they’ll pay the true costs of what they produce. Not on the table. Back when we were having a debate on financial reform someone floated the idea of levying a tiny transaction fee – like Japan did after their meltdown – so derivative traders pay their share on what will probably continue to be huge profits. Not on the table. Economics is still the dry science, but Dan Froomkin has made it a little more entertaining with this slide show Ten Flash Points In The Fiscal Commission Chairmen’s Proposal
But taken as a whole, the plan authored by Erskine Bowles and Alan Simpson would have devastating effects on the government and its ability to help the most vulnerable in our society, and it would put the squeeze on the middle class, veterans, the elderly and the sick – all in the name of an abstract goal that ultimately only a bond-trader could love.
While last month broke a record for the Great Recession in new private sector jobs we’re still in the midst of a jobless recovery. So now would be just a dandy time to cut federal employee loose per the Commission recommendations, The Bowles-Simpson Deficit Reduction Plan Doesn’t Add Up
Bowles-Simpson seems to have been put together backwards. Instead of starting with a plan about what the federal government should no longer do and then determining the savings from the smaller number of employees that would be needed to do what’s left to be done, with limited exceptions the plan focuses on the reduced workforce but makes few assumptions, suggestions, or recommendations about what services the government should no longer provide. The assumptions it does make don’t appear to justify the cuts in the number of employees and contractors.
We probably all start hearing it when we’re kids. The govmint is a bloated lazy bureaucracy. You could slash thousands of govmint workers and never miss them. That is debatable. In the mean time imagine even more unemployed. Government worker salaries are not black holes. They buy groceries, TVs, cars, houses and children’s toys. How is a massive lay off of government employees and the ensuing degradation of services going to help the economy. Hey we’ll privatize, that’s the ticket. Privatizing does help cost cutting sometimes, but actually increases cost in others – just think Halliburton and Blackwater(Xe).
The best for last and the ultimate irony. One of the Commission”s recommendations is Debt Panel Floats Public Option for Health Care
The plan sets a long-term goal of containing the growth in federal health-care spending – a major contributor to the deficit – so it accounts for no more than 1% in excess of gross domestic product after 2020.
Should GDP growth exceed that target, the report suggests several additional cost-savings measures, including adding “a robust public option and/or all-payer system” into new exchanges that the federal health law calls for in 2014.
Liberal Democrats pushed hard to include a public option in the health law that President Barack Obama signed in March, but Senate Majority Leader Harry Reid of Nevada ultimately yanked it out because a handful of moderate Democrats threatened to withhold their votes over it.
Republicans have argued that a public option would saddle the federal government with an expensive new health insurance program. But supporters contended it could actually give the government a new muscle to bend health spending, since such a plan would have new power to pay health-care providers at lower rates
An opt-in Canadian style single payer program? That option is already off the table. Obamacare which the knuckleheads on the Right call socialism was actually a huge gift to health insurance and health care corporations. If the Right blew their caskets over that modest plan to reign in health care costs their heads would explode over a single payer option.
Washington is neck deep in strange ties. Enough so if you wanted to spin out some crazy conspiracy theories, they would hold up, if one didn’t look too close. One of several problems with spinning these elaborate lies is one is bound to snag an ally simply because in the Village everyone knows everyone or is only removed by one degree – Top Palin aide is on Soros’ payroll – Revealed: the surprisingly close link between the liberal billionaire and the Republican superstar
Given Soros’ alleged role plotting to destroy the United States, Beck and his Fox viewership might be surprised to learn that one of Sarah Palin’s top aides has been on Soros’ payroll for years.
That would be Republican lobbyist Randy Scheunemann, Palin’s foreign policy adviser and a member of her small inner circle.